Financial Results for the Second Quarter
Fiscal Year Ending December 31, 2021

Investor Relations Presentation Materials

ISEKI & CO., LTD.
August 17, 2021
President Shiro Tomiyasu

Index
1. Outline of Financial Results for the Second Quarter
Fiscal Year Ending December 31, 2021
2. Domestic and Overseas Markets
3. Performance Forecast for the Fiscal Year Ending
December 31, 2021

4. Topics
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

2

1. Outline of Financial Results for theSecond Quarter Fiscal YearEnding December 31, 2021

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

Key Points on Financial Results for the Second Quarter＜Second Quarter Financial Results＞
Significant YoY increases to both sales and profit(Results Breakdown)
Domestic:

Overseas:

Earnings:

Net Sales (2Q Cumulative)(JPY bn)
80.1
801

82.2
822

775
77.5

Recovery from the reactionary decline after the consumption tax hike
Demand stimulated by government subsidies for agricultural business continuity,
etc.
Increased sales in North America and Europe owing to increased demand in linewith lifestyle changes
In Asia, positive impact seen from making a Thai distributor a consolidated
subsidiary at the end of the previous fiscal year and increased sales to China
Gross profit buoyed by increased sales＜Full-year Forecast＞

86.6
866
72.2
722
Domestic

21.7%

22.3%

22.7%

20.8%

27.7%

Overseas

FY2017/12
17/12期 FY2018/12
18/12期 FY2019/12
19/12期 FY2020/12
20/12期 FY2021/12
21/12期
2Q
2Q
2Q
2Q
2Q
2Q
2Q
2Q
2Q
2Q

Operating Income (2Q Cumulative)(JPY bn)
4.7
47

Consolidated Results Forecast Unchanged from Initial Estimates
2.8
28(Risks in the second half)• In Japan, reactionary pullback after demand stimulated by government subsidies for agriculturalbusiness continuity, etc., and decreased purchase intention due to concerns over lower price ofrice• Disruption of the supply chain due to the impact of the Novel Coronavirus (COVID-19) pandemic• Raw material prices will soar and remain highFinancial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

2.1
21

16
1.6

1.2
12

FY2017/12
17/12期 FY2018/12
18/12期 FY2019/12
19/12期 FY2020/12
20/12期 FY2021/12
21/12期
2Q
2Q
2Q
2Q
2Q
2Q
2Q
2Q
2Q
2Q

4

Business Environment
✓
✓

YoY

Current Quarter(FY2020/12 2Q)(FY2021/12 2Q)

Reactionary decline after consumption tax hikeSelf restraint on sales activities due to COVID-19

Domestic

✓
✓

North
America✓✓

Overseas

Europe

✓
✓
•
✓
•

Asia

✓
✓

✓
•
✓
•

Recovery from post-consumption tax hike reactionary decline
Impact of self restraint on sales activities eased compared toprevious year
Demand stimulated by government subsidies for agricultural business
continuity, etc.

Robust demand owing to growing demand resulting from consumers
staying at home
Delays in shipments of parts led to decreased shipments of tractors(temporary factors of the Company)✓✓

Increased demand due to lifestyle changes
A shortage of containers for marine transportation led to unfulfilledshipments and other backorder generation

Temporary closure of local retail outlets due to lockdowns⇒theCompany adjusted shipments
Partial recovery seen after store operations gradually resumed fromMay onwards✓✓✓

Robust demand for consumer goods owing to lifestyle changes
Local distributors continued operations as essential retail
Sales activities gradually returned to normal as vaccination
progressed

China
Demand for agricultural machinery stimulated by government policies
to secure food and travel restrictions
ASEAN (Thailand)
Low-level purchasing sentiment due to lower volume of agricultural
produce, and sluggish crop prices
South Korea
Demand for large agricultural machinery continued, despite theimpact of restrictions on activities
TaiwanSubsidies in place for purchase of large agricultural machinery

✓
•

China
Robust market continued, owing to factors including the continuationof government policies to secure food and stabilization of grain prices
ASEAN (Thailand)
Demand for agricultural machinery was on a recovery track, as thevolume of agricultural produce and crop prices began to recover lastyear
South Korea
Demand for large agricultural machinery continued
TaiwanA pullback effect with the withdrawal of subsidies

✓
•
✓
•
✓
•

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

5

Outline of Consolidated Business Performance(January 1, 2021 to June 30, 2021)(JPY bn, %)FY2019/12

FY2020/12

FY2021/12

2Q Actual%

2Q Actual%

2Q Actual%

YoY
ChangeNet Sales

77.5

100.0

72.2

100.0

86.6

100.0

14.4

(Domestic)

59.9

77.3

57.2

79.2

62.6

72.3

5.3

(Overseas)

17.5

22.7

14.9

20.8

24.0

27.7

9.0

Operating Income

1.6

2.1

1.2

1.8

4.7

5.4

3.4

Ordinary Income

0.8

1.1

1.0

1.5

5.5

6.4

4.4

Profit (Loss) Attributableto Owners of Parent

0.6

0.9

0.9

1.4

4.1

4.8

3.1

Average
Exchange
Rate (JPY)

US$

110.7

108.5

106.8

(1.7)

Euro

125.7

119.7

129.1

9.4

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

6

Domestic Sales
YoY¥5.3 billion

With agricultural machinery and farming implements recovering from the reactionary decline following theconsumption tax hike, and demand stimulated by government subsidies for agricultural business continuity,
etc., domestic sales increased overall.
FY2019/12

FY2020/12

FY2021/12

2Q Actual

2Q Actual

2Q Actual

Cultivating &Mowing
Machinery

15.1

13.3

14.7

Planting
Machinery

6.1

5.5

6.4

0.9

Rice
Transplanters: 0.4

Harvesting &Processing
Machinery

5.3

4.3

4.8

0.5

CombineHarvesters: 0.4

Subtotal

26.6

23.1

25.9

2.7

Farming
Implements

11.9

10.6

13.5

2.8

Spare Parts

6.8

7.1

7.2

0.1

Repair Fees

2.6

2.7

2.8

0.0

Subtotal

21.4

20.6

23.6

3.0

48.1

43.8

49.6

5.8

Construction of Facilities

1.3

3.0

1.9

(1.1)

Others

10.4

10.3

11.0

0.6

59.9

57.2

62.6

5.3

Agricultural Machinery

Agricultural Machinery Related(JPY bn)

Total

Total

YoY Change

Main factors of YoY changes

Notes
1.3

Tractors: 1.0✔

Sales of agricultural machinery and farming
implements rose, having recovered from the postconsumption tax hike slump, and demand wasstimulated by government subsidies for agriculturalbusiness continuity, etc.

✔

YoY easing of the impact of exhibition cancellations
and shrinking scale on account of COVID-19✔

Spare parts sales and repair fee revenues
remained strong✔

For construction of facilities, orders received andcompleted for large-scale facilities declined✔

Overall domestic sales increased substantiallycompared to the year before lastFinancial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

7

Overseas Sales
YoY¥9.0 billion

Sales in North America and Europe increased owing to rising demand in line with lifestyle changes
In Asia, making a Thai distributor a consolidated subsidiary had a positive impact (at the end of the previous
fiscal year), and sales to China increased
YoY Change

FY2019/12

FY2020/12

FY2021/12

2Q Actual

2Q Actual

2Q Actual

North America

6.6

5.0

7.8

2.8

Tractors: 2.8

Europe

7.3

6.4

10.8

4.4

Tractors: 1.2
Lawn mowers: 2.1(JPY bn)

Main factors of YoY changes

Notes

Asia

3.3

3.4

5.1

1.7

Others

0.2

0.1

0.2

0.0

Total Sales

17.5

14.9

24.0

9.0

✔

North
America:

Sales increased against the backdrop of afavorable compact tractor market
A shortage of containers for marine transportation
led to unfulfilled shipments and other backorder
generation✔

Europe:Sales, mainly of consumer goods, were robust
owing to lifestyle changes, and sales increased
from the impact of a weak yen
A shortage of containers for marine transportation
led to unfulfilled shipments and other backorder
generation

✔

Asia:

Sales increased due to the impact from making a
Thai distributor a consolidated subsidiary at theend of the previous fiscal year, tender-related
activities in the Philippines, and increased
shipments of semi-finished products to China

Tractors: 1.0
Rice
Transplanters: 0.4

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

8

Operating Income
YoY¥3.4 billion

In addition to increased gross profit buoyed by higher sales, operating income
increased owing to special factors, including the absence of a loss on valuation ofparts inventory recorded in the previous fiscal year.
[Breakdown on YoY Change]
FY2019/12

FY2020/12

FY2021/12(JPY bn, %)Increase in gross profit:¥4.3 billion

YoY Change

3.7

2Q Actual

2Q Actual

2Q Actual

Net Sales

77.5

72.2

86.6

14.4

Gross Profit

22.5

21.4

25.7

4.3

Gross Profit
Margin

29.1%

29.7%

29.8%

0.1%

SG&A Expenses

20.8

20.1

21.0

0.8

Personnel
Expenses

12.2

12.0

12.3

0.3

Other Expenses

8.6

8.1

8.7

0.5

0.6

(0.8)

4.7

1.2
FY2020/12
2Q

Increased grossprofit due tohigher revenue

Special factors*

Increased SG&A
expenses due tohigher revenue

FY2021/12
2Q*Special Factors• Absence of loss on valuation of parts inventory included in the previous fiscal year 0.3• Decline in depreciation in line with posting an impairment loss in the previous fiscal 0.3
year[Effect of FOREX Fluctuations (JPY bn)]
Operating Income

1.6

1.2

4.7

3.4

Net Sales

Cost of Sales

SG&A
Expenses

Operating
Income

0.7

(0.4)

(0.1)

0.2

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

9

Ordinary Income and Profit
Ordinary
IncomeYoY¥4.4 billion

In addition to favorable shifts in foreign exchange gain (loss) and share of profit (loss)of entities accounted for using the equity method, profit increased due mainly to one-off
posting of non-operating income.
FY2019/12

FY2020/12

Non-operating Income (YoY Change)

FY2021/12(JPY bn)

YoY Change
2Q Actual

2Q Actual

2Q Actual

Operating Income

1.6

1.2

4.7

3.4

Balance of Financial
Income

(0.3)

(0.3)

(0.3)

(0.0)

Other Non-Operating
Income

(0.4)

0.1

1.1

0.9

Ordinary Income

0.8

1.0

5.5

4.4

Extraordinary Income

0.1

0.6

0.0

(0.6)

(JPY bn)

Extraordinary Losses

(0.1)

(0.1)

(0.1)

0.0

Foreign exchange gain (loss)¥0.3 billion

Share of profit (loss) of entities accounted
for using the equity method¥0.2 billion

Settlement received¥0.4 billion(Reference) Related to Equity Method
FY2020/12
2Q Actual

FY2021/12
2Q Actual

Change(0.18)

0.03

0.21

0.65

-

(0.65)

Income Before Income
Taxes

0.7

1.6

5.4

3.8

Share of profit (loss) of entities
accounted for using the equity
method (non-operating)

Income Taxes - Deferred

(0.1)

(0.6)

(1.2)

(0.6)

Gain (loss) on change in equity(extraordinary)Profit (Loss) Attributable to
Owners of Parent

0.6

0.9

4.1

3.1

*Entities accounted for using the equity method
Previous fiscal year: Dongfeng Iseki, IST
Current fiscal year: Dongfeng Iseki

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

2 companies
1 company

10Balance Sheet (Consolidated)
YoY Change:

Higher sales and lower inventories this year led to improved balance of income ⇒ Cash & deposits increased
Non-current assets decreased ⇔ Interest-bearing liabilities and capital decreased
As of Jun.
30, 2020

As of Jun.
30, 2021

YoY
ChangeAs of Jun.
30, 2020

As of Jun.
30, 2021

YoY
ChangeCash & Deposits

7.6

14.3

6.7

Accounts Payable – Trade

41.3

41.1

(0.2)

Accounts Receivable –Trade

30.2

32.1

1.9

Interest-bearing Liabilities

76.8

67.2

(9.6)

Inventories

56.6

47.7

(8.8)

(Loans Payable)

68.6

59.4

(9.1)

(Merchandise & Finished Goods)

48.4

40.0

(8.4)

Other Liabilities

19.7

19.6

(0.1)

Other Current Assets

4.2

3.5

(0.6)

(Deferred Tax Liabilities for Land Revaluation)

5.7

4.0

(1.6)

Total Current Assets

98.6

97.8

(0.8)

Total Liabilities

137.9

127.9

(10.0)

Property, Plant and Equipment

97.4

85.4

(11.9)(Land)

50.8

44.6

(6.2)

Net Assets

68.9

67.0

(1.9)

(Machinery, Vehicles, Leasing)

16.9

12.4

(4.5)

Intangible Assets

1.3

2.2

0.8

(Retained Earnings)

17.3

18.6

1.2

Investments and other Assets

9.5

9.5

0.0

(Valuation Difference on Available-for-Sale
Securities)

(0.0)

0.2

0.3

Total Non-current Assets

108.2

97.2

(11.0)(Revaluation Reserve for Land)

12.6

8.8

(3.7)

Total Assets

206.9

195.0

(11.9)

Total Liabilities and Net Assets

206.9

195.0

(11.9)(JPY bn)

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

11

Equity ratio / Interest-bearing liabilities
Interest-bearing
liabilities,
D/E ratio

Made progress in reducing interest-bearing liabilities
D/E ratio improved to 1.00

Balance of Interest-Bearing Liabilities (JPY bn)
100

Equity Ratio (%)
32.3

32.0

30.5

33.5

32.5

31.5

35
30

80

76.0

76.8

75.2

74.1

72.4

25

67.2
20

60
15
10

40

5
20

0

0

40

16/6

60

17/6

80

18/6

100

19/6

20/6

21/6

Loans payable,
corporate bonds

67.5

64.8

67.8

67.8

68.6

59.4

Lease obligations

8.5

7.6

6.3

7.4

8.2

7.7

Total

76.0

72.4

74.1

75.2

76.9

67.2

D/E Ratio

1.16

1.05

1.04

1.10

1.11

1.00

Note : D/E Ratio=Interest bearing liabilities(incl. Lease liabilities)/Net assets
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

12

Statement of Cash Flows
Cash Flows

Operating cash flows were positive and increased substantially owing to higher sales and lower
inventories(JPY bn)

FY2020/12

FY2021/12

2Q Actual

2Q Actual

Cash flows from operating activities

(3.0)

7.4

10.5

Cash flows from investing activities

(4.6)

(1.3)

3.2

Free cash flow

(7.7)

6.1

13.8

Cash flow from financing activities

6.6

(2.9)

(9.6)

Effect of exchange rate change on
cash and cash equivalents

0.0

0.1

0.1

Net increase (decrease) in cash andcash equivalents

(1.0)

3.2

4.3

YoY Change

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

13

2. Domestic and Overseas Markets

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

Domestic Agricultural Machinery Market Trends
In the first half, despite recovery from the reactionary decline after the consumption tax hike and demand being stimulated
by government subsidies for agricultural business continuity, etc., recovery in demand was delayed due to the prolonged
impact of COVID-19, etc. From the second half onward, the main concerns are a reactionary pullback after demand wasstimulated by government subsidies for agricultural business continuity, etc., and decreased purchase intention due to thelower price of rice.

Domestic
Agricultural
Machinery
Demand■ Agricultural machinery demand (shipments in the industry)
Oct. 2019
Consumption tax
increase(9 principal machinery, moving annual total)(JPY bn)

280.0
260.0
240.0
220.0
200.0
Mar.

Jun.

Sep.

2017

Dec. Mar.

Jun.

Sep.

2018

Dec. Mar.

Jun.

Sep.

Dec. Mar.

2019

Jun.

Sep.

Dec. Mar.

2020

Jun.

2021

*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 Second Quarter of the Fiscal Year Ending December 31, 2021

15

Domestic Agricultural Machinery Shipments and
ISEKI’s Sales Performance
ISEKI’s Sales
Performance

ISEKI’s sales performance trended above that of the rest of the industry, owing tofactors including the effect of offering new rice transplanter products

YoY growth rate for 9 principal machinery categories (moving annual total)(%)

Jul. 2018Jun. 2019

Jul. 2019Jun. 2020

Jul. 2020Jun. 2021

Jan.-Jun.
2021

Industry(Amountofshipment)

104%

97%

96%

110%

ISEKI

(Salesamount)

99%

91%

104%

111%

*ISEKI estimates*9 principal machinery: Tractors, combine harvesters, rice transplanters, tillers, drying machines, rice huskers,
binders, harvesters, treatment

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

16

Mid-Term Plan Basic Strategy:
Selection & Concentration

Strategy for Domestic Products
Large Agricultural Machinery✓ With the rice transplanter included, ISEKI’s “AllJapan Series” of flagship models is now
complete
Full-scale operations began in spring thisyear; sales are robust

Smart Agricultural Machinery
Percentage of straight-travel assisted
specs among the 8-row class✓ About 60% of the 8-row classrice transplanters have straighttravel assisted specs

About
60%

2019

✓ Human-monitored robot
rice transplanter

2020

2021
(1～6月台数)(Unitsfrom Jan.-Jun.)(Planned introduction in Feb.
2022)
Unmanned operations possible
when monitored by the user

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

17

Provision of Optimal Solutions

Mid-Term Plan Basic Strategy:
Business Model Transformation■Agricultural Business Solutions Portal Site “Amoni” (July 7, 2021)
Opened portal site for agricultural producers that agriculture-related manufacturers participate in, where a wide
range of information on topics including agricultural management, cultivation and advanced technology can beaccessed all at once, on top of information on the products and technologies of each company
・Target users: Large-scale agricultural producers
・Content provided:[Daily useful information for agricultural businesses]• Weather forecast• Rain radar• Cumulative temperature forecast• Forecast for growth of wetland rice
[Information to help resolve issues of agricultural producers]• Demonstration videos of agricultural machinery
technologies and cultivation technologies• Demonstration reports at each location• Seminar and event information
・Goal: 100,000 registered users

https://amoni.iseki.co.jp/

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

18

Mid-Term Plan Basic Strategy:
Selection & Concentration

Realizing Sustainable Agricultural Businesses▪ “Sustainable Food Systems Strategy MeaDRI” of the
Ministry of Agriculture, Forestry and Fisheries*Formulated on May 12, 2021

Government policy of strategic initiatives taken from a medium- to long-term perspective, to realize thebalance between productivity improvement and sustainability of the agriculture, forestry and fisheries
industries via innovation
Zero emissions
Sustainable development*Extracted from “Sustainable Food Systems Strategy MeaDRI” of the Ministry of Agriculture, Forestry and
Fisheries (May 2021)
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

Develop innovativetechnologies and production
systems progressively
Implement technologies
currently underdevelopment in society

2020

Initiativ es & technologies

Goals to Achieve by 2050 (Abstract)▪ Realize the Ministry of Agriculture, Forestry and Fisheries’
goal of zero CO2 emissions▪ 50% reduction in (risk-weighted) use of chemical
pesticides▪ 30% reduction in chemical fertilizer use▪ Increase organic farming to 1M ha (equivalent to 25% of
farmland)

Rapid societal
implementation of
innovative technologies
and production systems

2030

2040

2050

2018

2050

0.5％

25％

（24K ha）（1M ha）
19

Popularization and Development of Organic Agriculture
Expanding organic agriculture for ricecultivation

Mid-Term Plan Basic Strategy:
Selection & Concentration⇒ Current issues are water management operations andweed management operations■Examples of initiatives of ISEKI Group
Conclusion of a business alliance with Yukimai Design Co., Ltd., with the aim of the popularizationand development of organic agriculture by utilizing automatic weed suppression robots (June 10,
2021)[Details of business alliance]• Field demonstration experiments in the developmentof automatic weed suppression robots, support fortechnology development, sales and after-sales
support, etc.

• Construct smart organic system with automatic weed
suppression robots, coach users, etc.
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

Promotion ofsustainableagriculture

Environmental
preservation

20

Market Trends (North America)
North
AmericaIn the compact tractors market, demand for products for individual users continued to rise. In thesecond half, the rise in demand is expected to slow slightly but still exceed last year’s level. Althoughsales and orders at ISEKI were robust, a shortage of containers for marine transportation led tounfulfilled shipments, etc.

1. Market Trends(1,000 units, %)3. Sales and Orders at ISEKI
Shipments and Orders(Jan.-Sep., 2021):

Jan. to Jun. cumulative

Category (PTO HP)
2019

2020

2021

YoY

40 HP and lower(Compact tractors)

98

110

120

117%

40-100 HP(Utility tractors)

31

33

39

120%

100 HP and above

10

9

12

126%

(Source: Statistics provided by AEM)

2. Situation of AGCO (OEM partner)
Unit sales (Jan.-Jun., 2021)➢ Compact tractors ：YoY 122%
：YoY 122%➢ Utility tractors

YoY 162%*A shortage of containers for marine transportation led tounfulfilled shipments, etc.

✓ Compact tractor that realized high-levelbasic performance at a low price began
full-scale operations in 2021•

Realized improvement inenvironmental
performance with anengine madein-house at ISEKI

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

MF1835E
21

Market Trends (Europe)
EuropeLocal retail outlets continued operations as essential retail. Demand for consumer goods rose due
to demand from consumers staying at home, and continued to be robust. Although local sales andorders at ISEKI both performed well, a shortage of containers for marine transportation led tounfulfilled shipments, etc.

1. Market Trends

3. Sales and Orders at ISEKI＜Landscaping market＞• Sales activities at local retail outlets gradually returned tonormal levels as vaccination progressed in various countries
in Europe, and have currently recovered to pre-COVID
levels• Demand for consumer goods rose due to demand fromconsumers staying at home, and continued to be robust

2. Local Sales➢ Sales (Jan.-Jun., 2021)
・Local distributors: YoY 128%
(Units sold basis)

Shipments and Orders (Jan.-Sep., 2021):
YoY 211%*A shortage of containers for marine transportation led tounfulfilled shipments, etc.

✓ Full-scale operations of riding mower for pros, which
realized top-level environmental performance and has
extensive functions, began in 2021
• Has an engine that complies with
European emission standards (EUStageV)•

High-level basic functions andextensive specs and equipmentthat cater to the needs of pro
users

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

SF237
22

Market Trends (Asia)
Thailand
1. Market Trends• Demand for agricultural machinery was on a recovery
track, as the volume of agricultural produce and crop
prices began to recover last year
2. Situation of the Local Distributor, IST Farm Machinery
Number of Units Sold (Jan.-Jun., 2021)➢ ASEAN Strategy Tractor: YoY 87%• Following consolidation as theCompany’s subsidiary, rebuilding
profit structure (increasing sales,
reducing costs) to improve
corporate structure.

Indonesia, Myanmar
1. Market Trends＜Indonesia＞ • Government tenders were lower than the initial
forecast, as budget was partially allocated to
COVID-19 countermeasures＜Myanmar＞ • Sales activities of sales outlets were affected by achaotic domestic situation due to the coup d'état

2. Orders at ISEKI(Jan.-Sep., 2021)＜Indonesia＞ • YoY increase owing to government tenders andstrengthening of general sales• Further promotion of sales centering on local brand power＜Myanmar＞ • YoY decline on the impact of the coup d'état• Sales activities stagnated as the chaos became
prolonged

3. PT. ISEKI Indonesia (Manufacturing Subsidiary)2020

3. Shipments and Orders at
ISEKI
Shipments and Orders (Jan.-Sep., 2021):

YoY 397%(Units, JPY bn)

A service training session

2021

2020 Actual

Jan.-Jun.
Actual2021 Plan

Jan.-Jun.
Actual

Production
Volume10,7605,000

14,6307,700

Operating Income

0.3

0.2

0.4

0.2

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

23

Market Trends (Asia)
海外市場の動向(アジア）South Korea, Taiwan

China
1. Market Trends

1. Market Trends

Trends in the Chinese Agricultural Machinery Industry by Product Type(YoY Change in Units, %)Jan.-Jun.,
2019

Jan.-Jun.,
2020

Jan.-Jun.,
2021

Rice Transplanters (Riding)

94.5%

125.6%

140.8%

Combine Harvesters (Allpurpose, Auto-threshing)

87.7%

91.9%

125.1%

Tractors(Medium- to Large-sized)

106.4%

117.8%

117.3%＜South Korea＞ • In line with moves toward large-scale farming, demand forlarge-sized, high-performance agricultural machineryheightened＜Taiwan＞• Demand for large-sized agricultural machinery continued; apullback effect with the withdrawal of subsidies

2. Shipments and Orders at ISEKI
Shipments and Orders (Jan.-Sep., 2021): YoY 88%

Source: China Association of Agricultural Machinery Manufacturers

2. National Government Subsidy(RMB bn)

2015

2016

2017

2018

2019

2020

202１

23.8

23.7

18.6

18.6

18.0

17.0

19.0

3. Situation of Dongfeng Iseki．(Number of Units Sold, Jan.-Jun.,
2021)➢ Rice transplanters (riding): YoY 104%
➢ Tractors, combine harvesters: YoY 147%

＜SouthKorea＞• In line with market trends, large-sized, high-efficiency combine
harvesters performed well. Shipments of tractors fell due to inventory
adjustments at distributors.
＜Taiwan＞ • Orders struggled to grow due to the impact of a reactionary declinewith the withdrawal of subsidies and of the COVID-19 pandemic, but
ISEKI aims for sales expansion centered around smart ricetransplanters in the second half

✓ PRJ8, Rice Transplanter for
TaiwanMarket introduction of high-efficiency, highprecision rice transplanter for contractors(straight-travel assisted specs) in June 2021

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

24

3. Performance Forecast for the
Fiscal Year Ending
December 31, 2021

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

Assumptions for Consolidated Performance Forecast<Predictions on the business environment>✓ Although the spread of COVID-19 will continue, it is expected to be alleviated by the end of the fiscal year
owing to an increased rate of vaccination

Outlook for 3Q and beyond
Domestic✓ Reactionary pullback after demand stimulated by government subsidies for
agricultural business continuity, etc.
✓ Decreased purchase intention due to concerns over lower price of rice

Overseas✓ Continuation of robust orders in North America and Europe✓ Backorders will increase, including unfulfilled shipments, resulting from
disruption of the supply chain due to the impact of the COVID-19 pandemic

Cost
aspect✓ Raw material prices will soar and remain highFinancial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

26

Forecast of Consolidated Financial Results for the Fiscal YearEnding December 31, 2021
Consolidated
Financial Results
Forecasts

After incorporating risk factors in the second half, initial consolidated financial results
forecasts remain unchanged.
FY2019/12(JPY bn)

FY2020/12

FY2021/12

YoY Change

Actual%Actual%Forecast

%

149.8

100.0

149.3

100.0

153.5

100.0

4.1

(Domestic)

117.7

78.5

115.9

77.6

117.9

76.8

1.9

(Overseas)

32.1

21.5

33.3

22.4

35.6

23.2

2.2

Operating Income

2.7

1.8

2.0

1.4

3.6

2.3

1.5

Ordinary Income

1.1

0.7

1.7

1.1

3.5

2.3

1.7

Profit Attributable to Ownersof Parent

0.7

0.5

(5.6)

-

2.4

1.6

8.0

Net Sales

Average
Exchange Rate
(JPY)

US$

109.3

107.0

105.0

(2.0)

Euro

121.6

121.5

123.0

1.5

*Forecast for year ending Dec. 2021: Forecast announcement on Feb. 15, 2021
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

27

4. Topics

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

Topics

Mid-Term Plan Basic
Strategy: ESG■Establishment of “Sustainability Committee” (July 1, 2021)
A “Sustainability Committee,” chaired by the President, was established to strengthen initiatives on issues
revolving around sustainability, in order to improve medium- to long-term corporate value, while contributing to
the realization of an abundant and sustainable society through ISEKI’s business activities.

■Issuance of ISEKI Report 2021
Contents✓ Value creation of ISEKI Group・Stance and strategies of the Mid-Term Management Plan
(2021-2025)
・Materiality
・Business development of each company, etc.

✓ ESG initiatives that support value creation
URL of the ISEKI Report: https://www.iseki.co.jp/english/csr/report/
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

29

Topics

Mid-Term Plan Basic Strategy:
Selection & Concentration■Intellectual Property
1. Number of patents registered in Japan by sector
Year

2000-2006

2007-2014

Statistics

Number of patents published by
sector

SectorAgriculture andFishery

Rank

Ranked No. 2 in the Other Special Machinery Sector

2016-2017

2018

2019

2020

Number of patents registered by sector

Other Special Machinery
First

Second

2. Patent grant ratio

First

SecondRanked No. 1 in All IndustriesYear

2004-2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Patent grant
rate

-

91.8%

94.7%

97.0%

99.2%

97.5% 100.0% 98.1%

96.4%

97.7%

98.7%

Rank

First

SecondFirst

SecondFirst* Patent grant rate = Number of patents granted / (Number of patents granted + Number of patents applications refused + Number of patents applications withdrawn or abandoned )Number of patents applications withdrawn or abandoned = Number of patents applications withdrawn or abandoned after notice of reasons for refusal
Source: Japan Patent Office Annual Report 2021 (the Japan Patent Office)Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

30

Topics

Mid-Term Plan Basic Strategy:
Selection & Concentration■Received the “Invention Prize” in the “National Commendation for Invention 2021”<Prize-winning invention> Invention of heat recycling control for grain dryers

Realizing energy-saving and high-speed drying
while preventing the cracking of grains, by using
the heat and moisture present in exhaust air
Far Infrared Heat Recycling Dryer

BurnerRadiator

Hot air

Hot air

Recycling of
exhaust air

Fan

Fuel Consumption

Moisture
fromresidual heat

Exhaustair

Far
infraredGrains
Kept at an
appropriate humidity
level

13％ reduction
GML series of dryers that use
heat recycling technology

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2021

31

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 Second Quarter of the Fiscal Year Ending December 31, 2021

32