Supplementary Information toConsolidated Financial Results(January 1, 2021－March 31, 2021)

ISEKI & CO., LTD.
May 13, 2021

Index
1. Outline of Financial Results for the First Quarter
Fiscal Year Ending December, 2021
2. Performance Forecast for the Fiscal Year Ending
December 31, 2021

Supplementary Information to Consolidated Financial Results21. Outline of Financial Results for the First Quarter
Fiscal Year Ending December, 2021

Supplementary Information to Consolidated Financial Results

Key Points on Financial Results for the First Quarter＜First Quarter Financial Results＞
A Great Start to the First Year of the Mid-termManagement Plan
・In a typical year, the first quarter, the off-demand season, has deficit in Operating
income and others
・YoY increases to both sales and profit in current period(Results Breakdown)
Domestic:

Overseas:

Earnings:

 Recovery from the reactionary decline after the consumption tax hike
 Support from government subsidies to agricultural business continuity
 Increased sales in North America and Europe Impact from last year’s accounting period unification of consolidated
subsidiaries in France* Gross profit buoyed by increased sales＜Full-year Forecast＞

1Q Net Sales(JPY bn)

36.6

36.8

40.4
33.3

31.9
Domestic

22.2%

22.9%

23.8%

21.6%

1Q Operating Income(0.2)

・ Uncertainties remain with the Novel Coronavirus (COVID-19) containment situationand demand trends in and outside of Japan
Supplementary Information to Consolidated Financial Results

Overseas

FY2017/12 FY2018/12 FY2019/12 FY2020/12 FY2021/12
1Q
1Q
1Q
1Q
1Q

(JPY bn)*Impact of unifying accounting period ofconsolidated subsidiaries in France
・ Sept. accounting period unified to Dec.
・ Consolidated 1Q of previous year of Oct.-Dec.
(off-demand season), consolidated current
quarter of Jan.-Mar. (demand season)

Consolidated Results Forecast Unchanged from Initial Estimates

30.2%

1.4

(0.5)

(0.7)
(1.1)

FY2017/12 FY2018/12 FY2019/12 FY2020/12 FY2021/12
1Q
1Q
1Q
1Q
1Q

4

Business Environment

Supplementary Information to Consolidated Financial Results5Outline of Consolidated Business Performance(January 1, 2021 to March 31, 2021)(JPY bn, %)FY2019/12

FY2020/12

FY2021/12

1Q Actual%

1Q Actual%

1Q Actual%

YoYChangeNet Sales

33.3

100.031.9

100.040.4100.0

8.5(Domestic)

25.3

76.2

25.0

78.4

28.2

69.8

3.2

(Overseas)

7.9

23.8

6.8

21.6

12.2

30.2

5.3

Operating Income

(0.7)

(2.2)

(1.1)

(3.5)

1.4

3.7

2.5

Ordinary Income

(1.1)

(3.3)

(1.2)

(4.0)

2.1

5.3

3.4

Profit (Loss) Attributableto Owners of Parent

(0.4)

(1.4)

(0.4)

(1.5)

1.9

4.8

2.3

Average
Exchange
Rate (JPY)

US$

110.5

109.6

104.4

(5.2)

Euro

126.3

120.8

126.8

6.0

Supplementary Information to Consolidated Financial Results

6Domestic SalesYoY¥3.2 billion(JPY bn)

Agricultural machinery and farming implements recovered from the reactionary decline following the consumption tax hike,and increased sales with demand underpinned by government subsidies for agricultural business continuity. Construction offacilities’ sales declined on completion of large-scale projects in the previous year, although domestic sales increased overall.
FY2019/12

FY2020/12

FY2021/12

1Q Actual

1Q Actual

1Q ActualYoY Change

5.7

6.6

0.8

Tractors: 0.6

Planting Machinery

2.2

1.7

2.5

0.8

RiceTransplanters: 0.5Harvesting &Processing
Machinery

2.7

2.0

2.40.3

CombineHarvesters: 0.3

Subtotal

11.7

9.5

11.6

2.0

Farming Implements

4.8

4.1

5.9

1.8

Spare Parts

2.7

2.9

3.0

0.1

Repair Fees

1.0

1.1

1.1

0.0

8.6

8.2

10.2

1.9

20.4

17.8

21.8

4.0

Construction of Facilities

0.5

2.6

1.4(1.2)

Others

4.4

4.6

5.0

0.4

25.3

25.0

28.2

3.2

Agricultural Machinery

6.7

Agricultural Machinery Related

Cultivating &Mowing Machinery

Subtotal
Total

Total

Main factors of YoY changes

Notes

✔

Sales of agricultural machinery and farming implements rose,
having recovered from the post-consumption tax hike slump
and underpinned by demand owing to government subsidies
for agricultural business continuity.

✔

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

Spare parts sales and repair fee revenues remained strong✔

Construction of facilities sales declined due to the completionof a large-scale facility in the same period of the previous
fiscal year✔

Overall domestic sales increased substantially compared tothe year before lastSupplementary Information to Consolidated Financial Results

7

Overseas Sales
YoY¥5.3 billion(JPY bn)

Net sales in North America and Europe increased on higher sales, as well as the impact of unifying the accounting period ofthe consolidated subsidiaries in France*.
In Asia, sales in South Korea and Taiwan declined, and Thailand experienced increased sales owing to making a distributor aconsolidated subsidiary
FY2019/12

FY2020/12

FY2021/12

1Q Actual

1Q Actual

1Q ActualYoY Change

North America

2.8

2.3

3.9

1.5

Tractors: 1.5Europe

2.9

2.45.93.4

Tractors: 0.5
Lawn mowers: 2.1

Asia

2.0

2.0

2.2

0.2

Tractors: 0.2

OthersTotal Sales

0.0

7.9

0.0

6.8

0.0

12.2

Main factors of YoY changes

Notes

✔

NorthAmerica:

Sales increased against the backdrop of afavorable compact tractor market
Shortage of containers for marinetransportation led to unfulfilled shipments
and other backorder generation✔

Europe:In addition to the impact of unifying
accounting period of consolidated
subsidiaries in France in the previous fiscal
year*, sales increased owing to sales tostay-at-home consumers✔

Asia:

Sales declined in South Korea and Taiwan,
while in Thailand, sales increased due tomaking a distributor into a consolidated
subsidiary at the end of the previous year

0.0

5.3

*Impact of unifying accounting period of consolidated subsidiaries in France
・ Sept. accounting period unified to Dec.
・ Consolidated 1Q of previous year of Oct.-Dec. (off-demand season), consolidated current
quarter of Jan.-Mar. (demand season)

Supplementary Information to Consolidated Financial Results

8

Operating IncomeYoY¥2.5 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

1.6

FY2021/12(JPY bn, %)0.1

YoY Change
1Q Actual

1Q Actual

1Q Actual

33.3

31.9

40.4

8.5

Gross Profit

9.6

9.0

11.7

2.7

Gross Profit
Margin

28.9%

28.2%

29.1%

0.9%

SG&A Expenses

10.3

10.1

10.3

0.1

Net Sales

0.8

1.4

PersonnelExpenses

6.1

6.0

6.0

0.0

Other Expenses

4.2

4.0

4.2

0.1

Operating Income(0.7)

(1.1)

1.4

2.5(1.1)
FY2020/121Q

Increased grossprofit due tohigher revenue

Special factors*

Decreased
SG&A expenses,
etc.

FY2021/121Q*Special Factors
・Increased revenue on unifying accounting period of consolidated subsidiaries in France
・Absence of loss on valuation of parts inventory included in the previous fiscal year
・Decline in depreciation in line with posting an impairment loss in the previous
fiscal year

0.4
0.30.1[Effect of FOREX Fluctuations (JPY bn)]
Net Sales

Cost of Sales

SG&AExpenses

OperatingIncome

0.18(0.04)(0.13)

0.01

Supplementary Information to Consolidated Financial Results

9Ordinary Income and Profit
Ordinary Income
YoY¥3.4 billion

In addition to a favorable shift in foreign exchange gain (loss), increased profit on oneoff posting of non-operating income
FY2019/12

FY2020/12

FY2021/12

1Q Actual

1Q Actual

1Q Actual

Operating Income

(0.7)

(1.1)

1.4

2.5

Foreign exchange gain (loss)¥0.3 billion

Balance of FinancialIncome(0.1)

(0.1)

(0.1)

(0.0)

Settlement received¥0.4 billion

Other Non-OperatingIncome(0.1)

0.0

0.8

0.8

Ordinary Income

(1.1)

(1.2)

2.1

3.4

Extraordinary Income

0.0

0.1

0.0(0.1)(JPY bn)

Extraordinary Losses

0.0

0.0

0.0(0.0)(JPY bn)

YoY Change

Income Before Income Taxes

(1.1)

(1.1)

2.0

3.2

Income Taxes - Deferred

0.7

0.7

(0.1)

(0.8)

Profit (Loss) Attributable toOwners of Parent

(0.4)

(0.4)

1.9

2.3

Non-operating Income (YoY Change)(Reference) Related to Equity Method
FY2020/12
1Q Actual

FY2021/12
1Q Actual

Share of profit (loss) of entities
accounted for using the equity
method (non-operating)(0.07)

0.01

0.08

Gain (loss) on change in equity(extraordinary)

0.12-(0.12)

Supplementary Information to Consolidated Financial Results

Change10

2. Performance Forecast for the Fiscal Year EndingDecember 31, 2021

Supplementary Information to Consolidated Financial Results

Forecast of Consolidated Financial Results for the Fiscal
Year Ending December 31, 2021
Consolidated
FinancialResults
Forecasts

Initial consolidated financial results forecasts remain unchanged.
⇒ Uncertainties exist concerning the containment of COVID-19 and demand trends
in and outside of Japan
FY2019/12

FY2020/12

FY2021/12*
YoY Change(JPY bn)

ActualNet Sales%

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

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
Supplementary Information to Consolidated Financial Results

12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”.

Supplementary Information to Consolidated Financial Results

13