Financial Results for the First Quarter
Fiscal Year Ending December 2016
Investor Relations Presentation Materials

ISEKI & CO., LTD.

Shirou Tomiyasu,
Director & Senior managing executive officer
May 17, 2016

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

Index

1. Outline of Financial Results for the First Quarter
Fiscal Year Ending December, 2016
2. Recent Development in Domestic and Overseas
Markets
3. Performance Forecast for the Fiscal YearEnding December, 2016
4. Topics

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

2Remarks on year-on year comparison
As a transitory treatment, 9-month results are consolidated for fiscal 2015.
Consolidation period (Financial report basis)
FY 2015

FY 2016

Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec
Companies that have adopted Mar.31
as the fiscal year-end
ISEKI & C O.,L TD a n d o th e rs
Companies that have adopted Dec.31 as the
fiscal year-end
D o m e sti c sa l e s co m p a n i e s & o th e rs

Consolidation period( Restated basis)
FY 2015

FY 2016

Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec
Companies that have adopted Mar.31
as the fiscal year-end
ISEKI & C O.,L TD a n d o th e rs
Companies that have adopted Dec.31 as the
fiscal year-end
D o m e sti c sa l e s co m p a n i e s & o th e rs

Note: 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.16 Investor Relations Presentation Materials

31.Outline of Financial Results of the First Quarter
Fiscal Year Ending December, 2016

(Billions of yen)

Net Sales[9-month]
ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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

1Q of FY ended
Dec.15

1Q of FY ending
Dec.16

Restated basis

Actual%yoychange(Restatedbasis)%

1Q of
FY endingDec.16
TargetDiff.
(Target/Actual)

35.6

100.0

37.7

100.0

2.1

38.7

(1.0)

(Domestic)

26.9

75.6

28.2

74.8

1.3

29.0

(0.8)

(Overseas)

8.7

24.4

9.5

25.2

0.8

9.7

(0.2)

Operating Income

(2.0)

(5.6)

(0.4)

(1.1)

1.6

(0.5)

0.1

Ordinary Income

(2.3)

(6.5)

(0.7)

(1.9)

1.6

(0.5)

(0.2)

(0.6)

-

(0.5)

(0.1)

Net Sales

Profit (Loss) attributableto owners of parent* 1st Quarter Dec.16 Average actual forex rate : ¥117.3 to the US$, ¥128.1 to the EuroISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

5Breakdown of Domestic Sales
1Q of
FY endedDec.15

1Q of
FY endingDec.16

Restated basis

Actualyoy
Change(Restated basis)
Note

Cultivating &Mowing Machinery

7.7

7.7

0.0

Planting Machinery

2.7

2.4

Harvesting &Processing
Machinery

3.0

Total

1Q of
FY endingDec.16
TargetDiff.
(Target/Actual)

8.6

(0.9)

(0.3) transplanters:(0.3)

2.8

(0.4)

3.0

0.0

3.3

(0.3)

13.4

13.1

(0.3)

14.7

(1.6)

Farming Implements

3.8

4.4

0.6

4.5

(0.1)

Parts

2.5

2.7

0.2

2.6

0.1

Construction of Facilities

0.9

2.1

1.2

1.0

1.1

Other Agriculture Related

6.3

5.9

(0.4)

6.2

(0.3)

Total

26.9

28.2

1.3

29.0

(0.8)

Agricultural Machinery

Agriculture Related Business(JPY bn)

Rice

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

6Breakdown of Overseas Sales(JPY bn)
1Q of
FY endedDec.15

1Q of
FY endingDec.16

Restated basis

Actualyoy
Change(Restated basis)
Note

1Q of
FY endingDec.16
TargetDiff.
(Target/Actual)North America

3.7

2.5

(1.2) Tractors: (1.3)

3.0

(0.5)

Europe2.7

3.1

0.4 Tractors:+0.3

3.1

0.0

China

0.8

1.5

0.7 transplanters:+0.6

1.7

(0.2)

ASEAN

0.1

0.7

0.6 Tractors:+0.5

0.2

0.5

Others0.7

1.0

0.3 transplanters:+0.3

1.0

0.0

Products Total

8.0

8.8

0.8

9.0

(0.2)

Parts & Others

0.7

0.7

0.0

0.7

0.0

Total

8.7

9.5

0.8

9.7

(0.2)

Rice

Rice

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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Operating Income(JPY bn, %)1Q of
FY endedDec.15

1Q of
FY endingDec.16

Restated basis

ActualItemy oy
Change(Restatedbasis)

1Q of
FY endingDec.16
TargetDiff.
(Target/Actual)Net Sales

35.6

37.7

2.1

38.7

(1.0)

Gross Profit

9.7

10.5

0.8

10.9

(0.4)

Gross Profit Margin

27.2

27.8

0.6

28.2

(0.4)

S.G.& A. Expenses

11.7

10.9

(0.8)

11.4

(0.5)

Operating Income

(2.0)

(0.4)

1.6

(0.5)

0.1

[year-on-year change]

Increase in gross profit resulting from an increase in sales
Reduced personnel expenses
Reduction in other expenses
Others

: 0.3
: 0.8
: 0.8
: (0.3)[ Incl. SG&A : 0.4 ][ Incl. SG&A : 0.4 ][ Incl. exchange gain : (0.1) ]1.6[Comparison with the target]

Decrease in gross profit due to the drop in sales
Reduced personnel expenses
Reduction in other expenses: (0.4)
: 0.2
: 0.3
0.1

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

8Ordinary Income and Net Income(JPY bn,)
1Q of
FY endedDec.15

1Q of
FY endingDec.16

Restated basis

Actual1Q of
FY endingDec.16yoy
Change(Restated basis)TargetDiff.
(Target/Actual)Operating Income

(2.0)

(0.4)

1.6

(0.5)

0.1

Balance of Financial Income

(0.1)

(0.2)

(0.1)

(0.1)

(0.1)

Other Non-operating Income

(0.2)

(0.1)

0.1

0.1

(0.2)

Ordinary Income

(2.3)

(0.7)

1.6

(0.5)

(0.2)

Extraordinary Income

0.2

0.4

0.2

0.1

0.3

Extraordinary Losses

(0.4)

0.4

(0.1)

0.1

Income before Income Taxes

(2.5)

2.2

(0.5)

0.2

(0.3)

Taxes, Deferred Taxes【前年同期比増減内訳】(0.3)

Profit (Loss) attributable to(0.6)

owners of parent

(0.3)

(0.5)

(0.1)

[Factors of year-on year change][Extraordinary Income]Gain on sales of investment securities
Posting of a surcharge in the same period last year

：0.4
：0.3

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

9Balance Sheet(JPY bn)

Item
Cash/Deposits
Accounts Receivables
Inventories(Product Inventory)
Other Current Assets
Noncurrent Assets
Total Assets
Accounts Payables
Debts
Other Liabilities(Total Liabilities)
Net Assets(Retained Earnings)
Total Liabilities and Net Assets

As of Mar.15

As of Mar.16

6.6
30.4
47.7
30.8
7.1
112.3
204.1
38.7
57.6
36.7
133.0
71.1
15.7
204.1

15.2
30.7
49.3
30.4
4.6
111.8
211.6
41.2
71.0
33.4
145.6
66.0
12.6
211.6

yoy
change

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

8.6
0.3
1.6
(0.4)
(2.5)
(0.5)
7.5
2.5
13.4
(3.3)
12.6
(5.1)
(3.1)
7.5

As of Dec.15

8.8
24.9
47.8
29.7
5.2
114.4
201.1
40.0
56.7
36.3
133.0
68.1
13.5
201.1
10

2.Recent Development in Domestic
and Overseas Markets

Variable fertilizing 8-row rice transplanter
NP80-FVISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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

Mar.13 Mar.14 Mar.15 Sep.15 Mar.16
Industry Shipment value

106

127

67

76

98

ISEKI

104

117

73

89

107

Sales Value

Note: The value of shipments on the above was calculated based on our standard.

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

12Recent Market Trend in Overseas(JPY bn)

35

FY Dec.16 FORCAST(Announced on
Feb.12th )¥33.7 billion

30
25*FY Dec.16

Sales result& Orders received

20
15

FY Dec.15 Restated
Actual10¥28.6 billion

5
0
Jan.

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

* Shipment result (from Jan.- Mar.) + Orders received (from Apr.-Jun.)

The results of “Parts & Others” are not included.

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

13Market Trend (North America)
1. Market in North America
Category(Unit: 1000)

Compact Tractors (PTO 40HP or below) Utility Tractors (PTO 40HP or above, 100hp or below )(PTO HP)

USA

CanadaUSA

Canada

20
25

11

1

12

1

79% 122%

103%

Jan.-Mar., 201518

2

Jan.-Mar., 201623

2

Growth rate

126%

12
13

89% 102%

Source: Association of Equipment
Manufacturers statistics
Figures have been rounded and non-adjusted.

2. Situation of AGCO (OEM partner)
Net Sales in North America

Unit sales (Jan.-Mar.) Compact tractors: Higher than last year
 Utility tractors:[Forecast]Higher than last year

3. Our situation
Order & shipment (Jan.– Jun.): Stayed good since April(Restated)

Since the market demand of compact tractors remains active, we try to increase our sales more.

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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Market Trend (Europe)
1. Trend in European market

Sluggish demand caused by warm winter in landscaping market
2. Situation of distributors
Unit sales• Distributors (from Jan.-Mar.) :Lower than last year
• ISEKI France (from Jan. – Mar.):[Consolidated subsidiary] Lower than last year

Net Sales in Europe[Forecast]

3. Our situation
 Order & shipment (Jan. – Jun.):In line with the plan
(Restated)

Running sales promotion of new products, we try to make further sales this year

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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Market (Thailand)
1. Trend in Thai market

Uncertain future outlook due to prolonged drought and sluggish economy
2. Situation of ISEKI (Sales) Thailand [Mitsubishi Corporation 80%, ISEKI 20% investment]
Strong sales mainly in new products(tractors) launched last year.
- Unit Sales (Jan.-Mar.): Higher than last year
3. Establishment of local subsidiary [ISEKI (THAILAND)CO.,LTD.]A new local subsidiary, to be established in Sep. 2016, provides both sales support andafter-sales services both in Thailand and across ASEAN countries.

Through the effort to make more sales by the sales company
and provide sales support by the new local subsidiary,
we try to expand our sales in the region.

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

16Market Trend (Indonesia)
1. Trend in Indonesian market

Rise in demand through government tender is expected.
2. Our situation

 SalesThrough the agricultural machinery diffusion policy by the Indonesian
government, we have received orders for tractors and walk-behind rice
(Manufactured in China)transplanters in 2016.

In 2016,we try to acquire more orders thanthe previous year.

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

17Market Trend (China)
1. Trend in Chinese market
Government subsidy

2008

40

(billion of yuan)
2009

130

2010

155

2011

175

2012

215

2013

217.5

*Excluding export to Southeast Asia from China
２．当社の状況Rice transplanters (walk-behind/ride-on): Higher than last year
High-clearance multi-purpose vehicles: Higher than last year
Tractor (full-fledged sales): Got off a good start

2016

2015

238

238

1st period

209

Annual237.5

Trend of ISEKI’s sales in China (including equity)

2. Situation of Dongfeng Iseki
Sales of Dongfeng Iseki (Jan.-Mar.)2014[Forecast](JPY bn)

5.6

6

(5.8)

5
Dongfeng Iseki(Membershipcompany)

4

2.3

3
2

1.3
0.6

1
0.8

0
1Q

0.1
2Q

0.2

3Q

FY Dec.15(Restated)

4Q

2.1

1.5

0.1

0.1

1Q

2Q

FY Dec.16

Both rice transplanters and high-clearance vehicles keep a high level of sales.
Running sales promotion of rice transplanters in a spring demand season and full-fledge
sales of tractors, we try to make further sales this year.
ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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3.Performance Forecast For the
Fiscal Year Ending December, 2016

Combine harvester w/ yield sensor
HJ-S series (4-6 row harvesting)
ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

Performance Forecast for FY ending Dec.16
1. Performance forecast(JPY bn)

FY endedDec.15
Restated basis

Item

FY endingDec.16
Forecast *y oyChange(Restated basis)

2Q

Full year

2Q

Fll year

Net Sales

76.3

156.8

83.0

165.0

6.7

8.2

Operating Income

0.6

0.2

1.4

3.5

0.8

3.3

Ordinary Income

0.6

0.4

1.3

3.2

0.7

2.8

0.7

1.9

Profit attributableto owners of parent

Note: Company forex rate: ¥120 to the US$, ¥130 to the Euro

2Q

Full year* Announced on Feb 12th

The effects of The 2016 Kumamoto Earthquake : we are currently assessing its impact andany impact on business performance in the future will be promptly disclosed as needed.

2. Year-End Divided Forecast(Yen)

Dec.15

Dec.16 Plan

1.5

1.5 - 3.0
ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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4.Topics

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

1) Establishment of a new subsidiary in Thailand
 “ISEKI (THAILAND) CO., LTD.” to be established(New release announced n April)

In the ASEAN region :- Supporting the distribution of our products& planning sales strategies- Developing / procuring farming implements & spare parts- Providing after-sales service & establishing parts centers

Scheduled to beestablished in September,
2016

Capital90 million baht
(Approx. JPY 0.3 billion)

Ownership

100% ow ned by ISEKI & Co., Ltd.

Fiscal year-end December 31
Location

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

Bangkok222) New branch of Dream Agricultural Research InstituteExhibition Hall

<Strategic Base>Dream Agricultural Research Institute(Located in Tsukuba-Mirai City, Ibaraki Pref.)Research & diffusion of advanced agri-business technologies• Exhibition hall
• Workshop facility• Demonstration farm field• Laboratory/ seminar room

Establishing branches inwide areas

Training Group’s
employees

Professional experts topropose profitable farming
methods to prospective
farmers

Extend to nation-widesales companies[Branches of the Institute]
Personnel
Allocation[Agri-Heroes support projects]
ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

Nation wide sales network
23

Establishment of Agri-Support Center in Kyushu Our 1st branch of the Institute opened in February“A facility in Kyushu to propose, introduce, instruct farming methods”
Yield amount of vegetables in Kyushu :Approx. 20% of all harvested in Japan Enhance abilities to make proposals forvegetable farming• Exhibiting vegetable farming machinery• Planning & Hosting seminars• Organizing a promotion team for vegetable farming Adjacent demonstration farm
Site area

5,620m 2

Training facility

1,492m 2
1,823m 2

Exhibisiton & Warehouse

Farm
Location2• Demonstrating / proposing local farming techniques

840m + 4ha (Demonstration farm)
Masuki-cho, Kumamoto Pref.

 Proposal of advanced farming technologies& techniques

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

243) Establishment of a new plant factory Advanced research & demonstration facility opened in March
Joint research with Ehime University
2005 Joint research started (Facility in thepremise of Ehime University)
2014 Launched plant growth diagnosis machine

DetailSolar-powered greenhouse plant
Plant growth diagnosis machine, environments control device

Area

500m 2

Location

Matsuyama City, Ehime Pref. ISEKI Matsuyama Mfg.Co., Ltd.)<Plant growth diagnosis device>Awarded “2016 Special award for development”
The Japanese Society of Agricultural Machinery and Food Engineers

ISEKI 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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Notes on the Future Forecast• The objective of this presentation document is to provide information, and it is not intended toinvite any action.
• The document has been prepared by ISEKI based on 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 1Q of FY ending Dec.16 Investor Relations Presentation Materials

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