Supplementary Information toConsolidated Financial Results(January 1, 2020 – September 30, 2020)

I S E K I & CO., LTD.
November 12, 2020

Index
1. Outline of Financial Results for the Third Quarter
Fiscal Year Ending December 31, 2020
2. Performance Forecast for the Fiscal Year Ending
December 31, 2020

Supplementary Information to Consolidated Financial Results21. Outline of Financial Results for the Third Quarter
Fiscal Year Ending December 31, 2020

Supplementary Information to Consolidated Financial ResultsImpact of the Novel Coronavirus (COVID-19) and Other Factors onConsolidated Business Performance<Domestic>
Sales declined due to self-restraints on sales activities including the cancelation of exhibitions owing to the impactof COVID-19 and the pullback against the last-minute demand ahead of the consumption tax rate increase, etc.

<Overseas>
North America ： Sales declined, impacted by reduced shipments of tractors to OEM partners owing to adelay in receiving engines purchased for installation in the first half, despite the growing
demand for tractors by consumers staying at home as a result of the impact of COVID-19.
Europe： Despite the current recovery trend, stagnant local sales primarily due to the temporary
closure of local distributors’ outlets under the spring lockdown, which continued to impact
shipments from the Company and our French sales subsidiary, leading to a decline in sales.

China： Sales of rice transplanters continued to be robust.

ASEAN： Sales declined due to the decrease in the number of bids in Indonesia.

Asia： Sales in South Korea and Taiwan were strong.

<Impact of COVID-19 (Analysis by the Company)>
Impact on net sales: Japan: ¥(2.8) billion, Overseas: ¥(0.7) billion, Total: ¥(3.5) billion
Supplementary Information to Consolidated Financial Results

4Outline of Consolidated Business Performance(January 1, 2020 to September 30, 2020)
FY ended Dec. 2019
(JPY bn, %)3Q Actual%

FY ending Dec. 2020
3Q Actual%YoY Change

Net Sales

121.0

100.0

111.6

100.0(9.4)(Domestic)

96.0

79.3

87.4

78.3

(8.6)

(Overseas)

25.0

20.7

24.2

21.7(0.8)

Operating Income

4.5

3.7

3.2

2.8(1.3)

Ordinary Income

3.2

2.7

2.8

2.5(0.4)

Profit (Loss) attributableto owners of parent

2.11.82.4

2.2

0.3

Averageexchangerate (yen)US$109.6

107.7(1.9)

Euro

123.2

120.6(2.6)

Supplementary Information to Consolidated Financial Results

5Domestic Sales
YoY-¥8.6 billion

Sales declined overall, as sales of agricultural machinery and farming implements decreased dueto the pullback against the last-minute demand ahead of the consumption tax rate increase andthe impact of COVID-19, despite strong sales of spare parts and revenue from repair fees.
FY ended Dec.
2019

FY endingDec. 2020

3Q Actual

3Q Actual

Cultivating & MowingMachinery

21.3

17.3

(4.0)

Tractors: (3.7)

Planting Machinery

8.0

6.4(1.6)

Rice transplanters: (1.5)

Harvesting &Processing Machinery

14.1

12.0(2.1)

Combine harvesters: (1.6)

Subtotal

43.4

35.7

(7.7)

Farming Implements

17.2

15.3

(1.9)

Spare Parts

11.8

12.0

0.2

Repair Fees

4.4

4.4

0.0

33.4

31.7

(1.7)

Total

76.8

67.4

(9.4)

Construction of Facilities

4.0

5.6

1.6

Others

15.2

14.4

(0.8)

Total

96.0

87.4(8.6)(JPY bn)

AgriculturalMachinery

Agricultural Machinery Related

SubtotalYoY Change

Main factors of YoY changes

Notes

✔

Sales of agricultural machinery decreased ¥7.7
billion due to the pullback against the last-minutedemand ahead of the consumption tax rate increase,and cancelations of exhibitions and self-restraints onsales activities owing to the impact of COVID-19.
Sales of farming implements decreased in tandemwith the decreased agricultural machinery sales.

✔

Sales of spare parts and revenue from repair fees
continued to be strong.

■ Sales of spare parts and revenue from repair fees
(Cumulative from Jan. to Sept., in billions of yen)

15.3

16.2

16.4

15.5

14.8

FY ended Dec.
2016

Supplementary Information to Consolidated Financial Results

FY ended Dec.
2017

FY ended Dec.
2018

FY ended Dec. FY ending Dec.
2019
2020

6

Overseas Sales
YoY-¥0.8 billion

Sales declined overall due to a decrease in sales to North America, Europe, and ASEAN, despite
an increase in sales to South Korea, Taiwan, and China.
FY ended
Dec. 2019

FY endingDec. 2020

3Q Actual

3Q Actual

North America

9.8

8.7

(1.1)

Tractors: (1.1)

Europe

7.8

7.1

(0.7)

Tractors: (0.1)
Lawn mowers: (0.5)

China

0.1

0.6

0.5

Rice transplanters: 0.5

ASEAN

1.00.6(0.4)

Tractors: (0.3)
Combine harvesters: (0.1)
Tractors: 0.2
Combine harvesters: 0.8(JPY bn)

YoY Change
Notes

Others

3.1

4.1

1.0

Product Sales Total

21.8

21.1

(0.7)

Parts & Others

3.2

3.1

(0.1)

Total Sales

25.0

24.2

Main factors of YoY changes✔

North America:

Lower sales due to the impact of
decreased shipments, owing to a delay inreceiving engines in the first half, despitethe growing demand for tractors byconsumers staying at home✔

Europe:Decline in sales due to the failure to castaside the impact of the spring lockdown,
despite the current recovery trend✔

China:

Continuing increased sales due toincreased shipments of semi-finished ricetransplanters✔

ASEAN:

Lower sales due to decreased shipmentsof tractors to Indonesia✔

Others:Higher sales due to increased shipments
to South Korea and Taiwan(0.8)

Supplementary Information to Consolidated Financial Results

7

Operating IncomeYoY-¥1.3 billion

YoY decrease in operating income due to the decrease in gross profit stemming from arevenue decline and the recording of loss on valuation of parts inventory, despite the reductionof selling, general and administrative expenses.
[Breakdown of YoY Change]
FY ended
Dec. 2019

FY endingDec. 2020

3Q Actual

3Q Actual

Net Sales

121.0

111.6(9.4)

Gross Profit

35.8

33.1(2.7)

29.6%

29.7%

＋0.1%

(JPY bn, %)Gross Profit Margin
SG&A Expenses

31.3

29.9(1.4)

Personnel
Expenses

18.4

18.0(0.4)

Other Expenses

12.9

11.9(1.0)

4.5

3.2(1.3)

Operating Income(2.7)

YoY
Change(0.2)

1.4

0.2

4.5
3Q of FY
ended
Dec. 2019

3.2
Decreasedgross profit due
to decreased
revenue

Recording ofloss onvaluation ofparts inventory
accompanying
delay inreceiving
enginespurchased

Decreased
SG&A expenses

Others3Q of FY
endingDec. 2020[Effect of forex fluctuations (JPY bn)]
Net Sales

Cost ofSales

SG&A
Expenses

Operating
Income

(0.2)

(0.2)

(0.0)

0.0

Supplementary Information to Consolidated Financial Results

8Ordinary Income and Profit
Ordinary
income YoY-¥0.4 billion

Decreased profit YoY, despite reduced foreign exchange losses and a reduction in the extent of decreased
profits owing to a reduction in the share of loss of entities accounted for using equity method as a result of
the improved revenue of Dongfeng Iseki and a reduction in our investment ratio, among others.

FY ended Dec.
2019

FY endingDec. 2020

3Q Actual

3Q Actual

Operating Income

4.5

Balance of Financial Income

YoYChange

Non-operating Income (YoY change)

3.2

(1.3)

Decrease in share of loss of entities
accounted for using equity method

0.7 billion yen(0.6)

(0.5)

0.1

Decrease in foreign exchange losses

0.2 billion yen

Other Non-operating Income

(0.7)

0.1

0.8

Ordinary Income

3.2

2.8

(0.4)

Extraordinary Income

0.1

0.7

0.6

(JPY bn)

Extraordinary Losses

(0.2)

(0.1)

0.1

Income before Income Taxes

3.1

3.4

0.3

Income Taxes - Deferred

(1.0)

(1.0)

±0.0

Profit (Loss) Attributable to
Owners of Parent

2.1

2.4

0.3

(Reference) Related to equity method(JPY bn)

FY ended Dec.
2019
3Q Actual

FY ending Dec.
2020
3Q ActualChange

Share of profit or loss ofentities accounted for using
equity method (non-operating)

(1.0)

(0.3)

0.7

Loss (gain) on change inequity (extraordinary)

-0.7

0.7

Supplementary Information to Consolidated Financial Results

92. Performance Forecast for the Fiscal YearEnding December 31, 2020

Supplementary Information to Consolidated Financial ResultsPerformance Forecast for the Fiscal Year Ending December 31, 2020
Performance
Forecast

・Although the impact of COVID-19 on the consolidated financial results of the Company has been slowly diminishing in the 3Q ofthe fiscal year ending December 31, 2020, Japan and other countries around the world are seeing the emergence of anotherround of infections and their economic impact continues to be uncertain.
⇒The consolidated financial results forecast, which was announced on August 6, 2020, will remain unchanged and the dividend
forecast will also continue to be undetermined.

1. Consolidated Full-year Performance Forecast
FY ended Dec.
2019

(JPY bn)

ActualNet Sales

FY endingDec. 2020*1

2. Dividend Forecast
YoY Change

FY ended Dec.
2018
ActualFY ended Dec.
2019
ActualFY ending Dec.
2020
*2 ForecastYear-end
dividend

3030

Undetermined

Forecast

149.9

144.5(5.4)(Domestic)

117.7

114.5(3.2)(Overseas)

32.2

30.0(2.2)

Operating Income

2.71.1(1.6)

Ordinary Income

1.10.2(0.9)

Profit (Loss) Attributable toOwners of Parent

0.70.2(0.5)

US$109107(2)Euro122120(2)Foreignexchange rates(yen)(JPY yen)*2: Forecast announced on May 15, 2020.

*1: Forecast announced on August 6, 2020

Supplementary Information to Consolidated Financial Results

11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

Supplementary Information to Consolidated Financial Results

12