Financial Results for the Fiscal Year Ended
December 2016
Investor Relations Presentation Materials

ISEKI & CO., LTD.
Shirou Tomiyasu,
Director & Executive Vice President
February 17, 2017
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

Index1.Outline of Financial Results for the Fiscal Year
Ended December, 2016
2.Recent Development in Domestic and Overseas
Markets
3.Performance Forecast for the Fiscal YearEnding December, 2017
4.Topics

ISEKI 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( 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 & CO.,LTD and others

Companies that have adopted Dec.31 as the fiscal
year-end
Domestic sales companies & others

Note: The subsidiary in France only adopts the end of September as its fiscal year end.
(The results from Oct. to Sep. )ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

31.Outline of Financial Results of the Fiscal Year
Ended December, 2016
Net Sales(Billions of yen)

【Restatedbasis】

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

Outline of Consolidated Business Performance(JPY bn,％)

Item

FY ended Dec.15
Restated

FY ended Dec.16
Actual％％yo ychange(Restatedbasis)

Diff(forecast/actual)(Announced on Nov .11.)

156.8 100.0

153.1 100.0

(3.7)

(2.4)

Domestic

125.4

80.0

121.0

79.0

(4.4)

(2.5)

Overseas

31.4

20.0

32.1

21.0

0.7

0.1

Operating Income

0.2

0.1

2.5

1.6

2.3

(0.3)

Ordinary Income

0.4

0.3

1.6

1.0

1.2

(0.4)

0.9

0.6

Net Sales

Profit attributable toowners of parent

Exchange
rate

US＄
Euro

119.9
134.9

108.6
120.1

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

0.2(11.3)(14.8)

(0.4)
(0.9)
5

Agricultural Machinery

Agricultural Machinery Related

Breakdown of Domestic Salesyoychange(Restated basis)
Note(JPY bn,)Diff(forecast/actual)FY endedDec.15
Restated

FY endedDec.16
ActualHarvesting &Processing Machinery

30.1
9.9
21.9

27.6
9.1
20.9

(2.5) Tractors ：(2.6)
Rice transplanters ： (1.0)(0.8) Trans planters： +0.2
Combine harvesters (1.4)(1.0) Rice husker：＋ 0.2 ：

(0.9)
0.6
(1.6)

Total

61.9

57.6

(4.3)

(1.9)

Farming Implements

Total

18.0
14.1
4.9
37.0

19.0
14.4
5.2
38.6

1.0
0.3
0.3
1.6

(0.1)
(0.1)

Total

98.9

96.2

(2.7)

(2.0)

Others

5.5
21.0

5.1
19.7

(0.4)
(1.3)

0.1
(0.6)

Total

125.4

121.0

(4.4)

(2.5)

Cultivating &Mowing Machinery
Planting Machinery

Spare parts
Repair fees

Construction of Facilities

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials(Announced on Nov.11.)

6

Breakdown of Overseas Sales(JPY bn,)

FY endedDec.15
Restated

FY endedDec.16
Actualyoychange(Restated basis)
Note

Diff
(forecast/actual)(Announced on Nov.11.)

Total

12.8
11.0
1.1
1.8
1.9
28.6
2.8
31.4

10.7
9.3
3.2
3.0
2.0
28.2
3.9
32.1

(2.1) Law n mow：ers： +0.1
Tractors (0.3)(1.7) Law n mow： ers： (1.2)
Tractors ： +0.9
2.1 Rice transplanters： +1.2
Tractors ： +1.1
1.2 Rice Transplanters： +0.1
Rice transplanters +0.2
0.1 Combine harvesters：： (0.1)
(0.4)
1.1
0.7

(0.2)
(0.2)
0.3
0.1

Overseas Sales incl. ChineseBusinesses

38.0

37.0

(1.0)

1.8

23.2%

23.4%

North America
EuropeChina
ASEAN
Others
Product Sales Total
Parts & Others

Ratio of overseas net sales

Tractors(2.2)<Chinese businesses Local-currency-based-sales>
FY ended Dec.15 FY ended Dec.16
Restated
ActualSales (million yuan)

494

619

Growth rate

Up 25% on Yuan base. Sales decreased due to the appreciation of the yen.
(Forex rates in 15/Dec: 18.34 yen ⇒ 16/Dec: 16.76 yen)

25.3%

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

7

Operating Income(JPY bn, %)Item【 Factors of YoY change(JPYbn,)】

Diff
yoy
FY ended FY ended
change (forecast/Dec.15 Dec.16(Restated actual)
Restated Actual
basis)＋２．５

Personnel
expenses＋１．１(Announced on Nov .11.)

Net Sales

156.8 153.1

(3.7)

(2.4)

Gross Profit

45.1

(0.2)

(0.9)

Gross Profit Margin

44.9

28.8% 29.3% ＋0.5% (0.2%)

Operating
Income
0．２

(0．2)

Other
expenses＋１．４

Decrease ingross profit

Reduced
SG&A

S.G&A.Expenses

44.9

42.4

(2.5)

(0.6)

personnel expenses

26.1

25.0

(1.1)

-

Other expenses

18.8

17.4

(1.4)

(0.6) 【 Effects of forex move(JPYbn,)】

Operating Income

0.2

2.5

2.3

(0.3)

FY endedDec.15
Restated basis

Operating
Income
２．５

FY endingDec.16
ActualOperating Income＋２．３

Net sales Cost of sales S.G&A.Expenses Operating Income
(2.2)

＋1.5

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

＋0.3

(0.4)
8

Ordinary Income and Net Income(JPY bn,)yoy
FY ended FY ended
changeDec.15 Dec.16(Restate
Restated Actuald basis)Diff(forecast/actual)(Announced on Nov .11.)

Operating Income

0.2

2.5

2.3

(0.3)

Balance of Financial Income

(0.7)

(0.7)

-

(0.1)

【 Factors of year-on year change 】

Non-operating Income
exchange losses
Share of loss of entities accounted forusing equity method

Other Non-operating Income

0.9

(0.2)

(1.1)

-

Ordinary Income

0.4

1.6

1.2

(0.4)

Extraordinary Income

0.5

1.2

0.7

0.1

Gain on sales of investment
securities

Extraordinary Losses

(1.0)

(1.7)

(0.7)

(0.4)

Loss on disaster
Other(Surcharges)

Income before Income Taxes

(0.1)

1.1

1.2

(0.7)

Taxes, Deferred Taxes

(0.2)

0.9

Profit attributable toowners of parent

0.9

0.2

(0.1)
(1.1)

Extraordinary Income

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

+0.8
(1.1)
+0.3

9

Summary of the Kumamoto Earthquake■Earthquake restoration cost

¥1.1 billion[Breakdown of loss on disaster](JPY million)

Amount(Loss on disaster)Fixed assets

807

Inventories

144

Other restoration expenses

115

Total

■Acquisition of fixed assets¥0.3 billion■Support of *Iseki-Kyushu Co., Ltd.

¥0.2 billion• S.G. & A. Expenses, etc.

■Impact on performance of**Iseki-Kumamoto MFG. Co., Ltd.

¥0.2 billion• Influence by delays in production, etc.

1,068

*Iseki Kyushu Co., Ltd. :A sales company covering the entire Kyushu
region**Iseki-Kumamoto MFG. Co., Ltd. :A manufacturing plant centering on
combine harvesters

 Total amount : Approx. ¥1.8 billion

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

10Balance Sheet(JPY bn)

As of
Dec.15

As of
Dec.168.8
Accounts Receivables
24.9
Inventories
47.8（Merchandise and finished goods ）40.6
Other Current Assets
5.3
Total Current Assets
86.8
Non-current Assets
98.0
Investments and other assets
16.3(Investment securities)
8.6
Total Non-current Assets 114.3
Total Assets
201.1

13.9
24.9
49.3
42.0
4.8
92.9
97.5
12.9
6.3
110.4
203.3

Cash & Deposits

yoychange

5.1 Accounts Payables- Interest Bearing Liabilities
1.5 （loans payable）
1.4 Other Liabilities(0.5) Total Liabilities
6.1
Net Assets(0.5)(3.4) (Retained earnings)(Valuation difference on(2.3) available-for-sale securities)(3.9) (Foreign currency translation adjustment)
2.2 Total Liabilities and Net Assets

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

As of
Dec.15

As of
Dec.16yoychange

40.0
65.8
56.7
27.2
133.0

42.4
69.5
61.4
24.3
136.2

2.4
3.7
4.7
(2.9)
3.2

68.1

67.1

(1.0)

13.5
2.5
1.4
201.1

14.0
1.2
0.8
203.3

0.5
(1.3)
(0.6)
2.2

11

Trend of Capital Investment
Capital investment(JPY bn)15.0

Dec./17 Plan

Profit before
depreciation

10.0

5.0

*1: Actual results are
acceptance base of property,
plant and equipment.

0.0
Mar.12

Mar.13

Mar.14Mar.15

Dec.15

Dec.16

Dec.17B) Profit before depreciation

5.5
9.6

7.2
11.0

10.4
13.8

14.0
7.2

10.4
6.5

7.4
8.3

7.5
11.1

Ｂ－Ａ

4.1

3.8

3.4

(6.8)

(3.9)

0.9

3.6

A) Capital investment *1[Dec.16 Main items of capital investment](JPY bn)

Domestic sales & service facilities
Renewal of production facilities (New models, enhanced productivity, streamlining, etc.)
Kyusyu Agri Support Center

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

1.8
3.1
0.4

12

Interest Bearing Liabilities and Planned Dividend
1. Interest Bearing Liabilities(JPY bn)

Trend of Balance of Interest Bearing Liabilities

80

66.8

65.8

69.5

9.2

9.1

8.1

Lease
obligations

47.5

48.1

52.2

5.4

6.4

7.8

42.1

41.7

44.4

Mar.12

Mar.13

Mar.14

D/E ratio (Times)

0.82

0.76

0.76

0.94

0.97

1.04

Equity Ratio (%)

32.9%

34.3%

34.0%

34.0%

33.0%

32.2%

47.5
58.2

48.1
62.9

52.2
68.7

66.8
71.1

65.8
68.1

69.5
67.1

60
40
20

Borrowings/
Corporate
bonds

57.6

56.7

61.4

Mar.15

Dec.15

Dec.160Interest bearing liabilities (billion y en)

Net assets (billion yen)

2. Planned Dividend
Mar.14Year-end Dividend

4.0

（yen）

Mar.153.0

Dec.15

Dec.16 Plan

1.5

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

1.5
13

2. Recent Development in Domestic
and Overseas Markets
Co-developed with female farmers for the 2nd time
Tiller “Chocopuchi” (Available since Dec.2016)

KCR605W
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

KM27BDW

KM17W

Trend of Domestic Market and Our Sales Result
Agricultural machinery demand [Industry shipment]
4th emission gas
regulation(9 principal machinery, moving annual total)*ISEKI’s estimate• 102-177PS

3rd emission gas regulation(JPY bn)

102-177PS(13/Nov.)

400

76-102PS(14/Apr.)• 76-102PS
26-50PS(15/Sep.)

50-76PS(14/Nov.)

From Sep. 2017

350

300

Last-minute demand- Emission gas regulation
250

200

Mar.

Jun.

Sep.

2012

Dec.

- Consumption tax hike

Reactionary decline fromlast-minute demand

Mar.

Mar.

Jun.

Sep.

2013

Dec.

Jun.

Sep.

2014

Dec.

Mar.

Jun.

Sep.

2015

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

Dec.

Mar.

Jun.

Sep.

Dec.

2016

15

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

Dec.12 Dec.13 Dec.14 Dec.15 Sep.16 Dec.12
Industry

Shipment value

107 11986

84 100 103

ISEKI

Sales Value

104 108

92

94

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

98

90

16

Our Commitments for domestic market
Enhance proposals for growing market“Changes in agricultural structure”
Large-scale

Crop conversion

farming

Advanced
technologies

Support capability

Product appeal<Growth rate of sales amount of large machinery and vegetable machinery>
Tractors (HP75 or above)

Combine harvesters(5 lanes or more)

Vegetable production
machinery

107%

111%

124%

2015

2016

2015

2016

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

2015

2016
17

Product Appeal Reinforcement
Large-scale farming• Large machinery full lineup

T JV Series[62-98PS]

T JX Series[77-97PS]

T JW Series[108-120PS]

BIG-T6600 Series[140-165PS]

BIG-T7600 Series[156-237PS]• Comply with 4th off-road emission gas regulation in Japan
Start from Sep. 2017
Target range from 76hp to 177hp

Introduce new models
in a timely manner

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

18

Product Appeal Reinforcement
Crop conversion (Dry field vegetable farming)
Integrated system of vegetable production mechanization
Cultivation

Scale

Large

Small

Seeding/
Transplanting

Fieldmanagement

Harvesting

Tractor/Specializedmachinery

Tiller/Multipurpose
vehicleRadish harvesting machine• Enrich lineup by launching new products

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

We introduced walk-behind type first in
the industry which realizes
the labor-saving work.

19

Product Appeal Reinforcement

Advanced technologies• Research on robotization and ICT agricultural machinery
Variable fertilizing
rice transplanter

Rice transplanter withstraight-travel assist system

Robot tractor-Control the amount of fertilizer
properly & reduce plant lodging.
-Improve the work efficiency at
the time of harvesting-Prevent field &watercontamination by excessive
fertilizer.

-GPS and steering motor help theoperator plant straight.
-Reduce fatigue as well as savetime and cost.
*To be released in Dec. 2017

-Driverless tractor under manned
controlling & monitoring.
-Improve work efficiency.
-Realize efficient work by multiple
operation & high precision GPS.
*Under research & development

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

20

Reinforcement of Supporting Capabilities

Strategic Base

Training professionals• Agri-business proposals for promising
farmers• Proposal for large tractors / farming
implements• Technical services for large agricultural
machinery

Branches of Yume-Soken

Staff allocation

Dream Agricultural ResearchInstitute(Yume-Soken)
ISEKI Global Training Center(IGTC)

Extend to nation-wide sales
companies

Large maintenance & service
facilities

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

21

Recent Market Trend in Overseas（JPY bn）
35

FY Dec.17 Forecast(Announced on Feb. 14)
JPY 33.6 billion

30

25

20

FY Dec./16 Actual15

JPY 28.2 billion

Orders*

10

5

0
Jan.

Feb.

Mar.

Apr.

May.

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

*FY ending Dec.17 Orders (Jan.-Mar.) : The results of “Parts & Others” are not included.

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

22Market Trend (North America)
1. Market in North America
Category(PTO HP)

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

USA
59

6

Jan.-Dec., 201657

6

Growth rate

96%

95%

Compact Tractors (PTO 40HP or below )USACanadaJan.-Dec., 2015

(Unit: 1000)

66
63
96%

Canada

119

13

132

133

12

145

112%

92%

110%

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

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

15

Unit sales (16/Jan.-Dec.)
Utility tractors: in line with the previous yearCompact tractors: higher than last year

12.8
11.1

10.1

10

10.7

11.1

16/Dec.

17/Dec.

6.55

3. Our situation
Order & shipment (17/Jan.-Mar.): in line with the plan

013/Mar.

14/Mar.

15/Mar.

15/Dec.
(Restated)(Forecast)

Promoting sales of a full line of economy tractors, we expect net sales to be higher than thelast fiscal year.
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

23Market Trend (Europe)
1. Trend in European Market
Demand was sluggish throughout the year due to unstable weather in 2016.
In 2017, uncertain circumstances linger in France and Germany.

2. Situation of distributors
 Unit sales (16/Jan.-Dec.)

Net Sales in Europe• Distributors: lower than last year

• ISEKI France S.A.S.
(Consolidated subsidiary): lower than last year

3. Our situation
Order & shipment (17/Jan.-Mar.): lower than the plan
(Restated)(Forecast)Due to the effect of warm winter in France and Germany, current order & shipment has been a little lower
than the plan. For the full-year, we plan to exceed the last fiscal year promoting sales of the economy
tractors which we launched last year.
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

24Market Trend (ASEAN: Thailand)
1. Trend in the market
Rice price was sluggish even after the impact of draught was cleared.
Situation surrounding farmers was harsh in 2016.
Currently, rice price remains stagnant and unfavorable conditions for farmers persist.
(Mitsubishi Corporation 80%,
ISEKI 20% investment)

2. Situation of ISEKI (Sales) Thailand
ASEAN strategy tractors• Unit sales (16/Jan.-Dec.): higher than last year
Launched sales of all-purpose combine harvesters• With sales expansion of tractors & all-purpose combine harvesters as well as an enhanced dealer
network through a (partial) acquisition of a large-scale sales agent business, we plan to increase oursales for this fiscal year.
• New subsidiary “ISEKI(THAILAND)CO.,LTD”(Established in Nov. as a wholly owned subsidiary”)• Development/procurement/sales of spare parts,
implements, etc.
• After-sales service support through spare parts
center, etc.

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

25Market Trend (ASEAN: Others)
1. Situation by country
Indonesia
Market trend: Government has supported the introduction of agricultural machinery since 2015.
Our situation: In addition to tractors and rice-transplanters, we will expand sales of all-purpose combine harvesters in 2017.

■VietnamMarket trend: Demand expected to rise as agricultural machinery prevails in the market.
Our situation: Reinforce cooperation with VEAM, the distributor in Vietnam.
 Manufacturing site (for ISEKI brand tractors) will be completed in 2018.
Contract for manufacturing support will be concluded; ISEKI to offer on-site instruction/
facility & manufacturing process design etc.
(JPY bn)

Trend of our sales (ASEAN)

2. ASEAN summary

4.6

5With expanding market demand, we plan substantial

3.0

increase in sales from the previous year.

1.8
0.3
0
15/Mar.

15/Dec.
(Restated)

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

16/Dec.

17/Dec.
(Forecast)26

Market Trend (Indonesia)
3. Situation of production• PT. ISEKI INDONESIA Production volume trend and our commitments
2014Actual

Production model

Production volume

North America

1,100

2015Actual

2016(Forecast)

3,900

8,300

• Economy tractor (large)• Economy tractor (small)

Europe7,300

2017(Plan)• Economy tractor

ASEAN• ASEAN strategic tractor

Focus on the production

Strengthen procurement

Commitments
Promotion of
local procurement

Bolster production control

Reinforcethe foundationsof production

PT. ISEKI INDONESIA reaches full production

 Establishment of “Business in Indonesia Promotion Department” on Nov.1
We will reinforce the foundations of our production in an effort to enhance productivity
through optimal procurement etc.
⇒ We plan to turn profitable in this fiscal year.
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

27Market Trend (China)
1. Trend in Chinese Market
Large-scale, high-efficient and advanced machinery have been subsidized more.
Government subsidy(Yuan bn)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

4.0

13.0

15.5

17.5

21.5

21.8

23.8

23.8

23.7

18.6
Trend of sales of Dongfeng Iseki(local currency base)

2. Situation of Dongfeng Iseki(Yuan million)

732

800

Sales of Dongfeng Iseki (16/Jan.-Dec.)* Excluding export to Southeast Asia from China
２．当社の状況 Rice transplanters (ride-on):higher than last year
higher than last year

 Tractors (full-fledged sales):Got off a good start

494

600
500
400

 Combine harvesters:

619

700

380

300
200
100
0
15/Mar.

15/Dec.

16/Dec.

17/Dec.
(Forecast)

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

28Market Trend (China)
Earning condition of Dongfeng Iseki• FY2016: Recording of a net loss
• Foreign exchange loss, development cost burden, etc.= temporary profit decline• Cost reduction initiatives unachievedRecording of share of loss of entities accounted for using equity: ¥1.1 billion• FY2017: New plant completed & start production “Production volume expansion”
Launch a large project with municipal farm management groups
Enrich product line
Turing profitable<Outline of new plant>
Production
capacity

Approx. 50,000 units/year• Production machinery: All-purpose combine harvesters,
walk-behind rice transplanters, tractors

Investment
amountApprox. 450 million yuan

• Start of operation: February, 2017

Site/
Building area2

Site: Approx. 38,000 m
Building: Approx. 96,000 m 2“Export machinery to neighboring ASEAN nations,besides in Chinese market”

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

29

3.Performance Forecast For the Fiscal
Year Ending December, 2017

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

Performance Forecast for FY ending Dec.17(JPY bn)
FY endedDec.15
Restatedbasis(Jan.-Dec.)

Item

Net Sales(Domestic)(Overseas)
Operating Income
Ordinary Income

156.8
125.4
31.4
0.2
0.4

Profit attributableto owners of parent

FY endedDec.16 Actual(Jan.-Dec.)

153.1
121.0
32.1
2.5
1.6
0.9

FY endingDec.17
Forecast*(Jan.-Dec.)

yoychange％161.5 100.0
125.3 77.6
36.2 22.4
3.5
2.2
3.7
2.3
2.7
1.7

8.4
4.3
4.1
1.0
2.1
1.8

Exchange

US$

119.9

108.6

115.0

6.4

Rate

Euro

134.9

120.1

120.0

(0.1)

Foreign exchangesensitivity

US$

13

(Operating Income,
JPY million)

Euro

18
*Forecast : Announced on Feb 14
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

31Breakdown of Domestic Sales

Agricultural Machinery

Agricultural Machinery Related(JPY bn)
FY endedDec.15
Restated(Jan.-Dec.)

FY endedDec.16
Actual(Jan.-Dec.)

FY endingDec.17
Forecast*(Jan.-Dec.)

Cultivating &Mowing Machinery

30.1

27.6

28.2

0.6

Planting Machinery

9.9

9.1

8.7

(0.4)

Harvesting &Processing Machinery

21.9

20.9

20.4

(0.5)

Total

61.9

57.6

57.3

(0.3)

Farming Implements

18.0

19.0

19.6

0.6

Spare parts

Total

14.1
4.9
37.0

14.4
5.2
38.6

14.7
5.4
39.7

0.3
0.2
1.1

Total

98.9

96.2

97.0

0.8

Others

5.5
21.0

5.1
19.7

7.5
20.8

2.4
1.1

Total

125.4

121.0

125.3

4.3

Repair fees

Construction of Facilities

yoychange*Forecast : Announced on Feb 14
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

32Breakdown of Overseas Sales(JPY bn)

FY endedDec.15
Restated(Jan.-Dec.)

FY endedDec.16
Actual(Jan.-Dec.)

FY endingDec.17
Forecast*(Jan.-Dec.)

Total

12.8
11.0
1.1
1.8
1.9
28.6
2.8
31.4

10.7
9.3
3.2
3.0
2.0
28.2
3.9
32.1

11.1
11.3
4.2
4.6
2.4
33.6
2.6
36.2

0.4
2.0
1.0
1.6
0.4
5.4
(1.3)
4.1

Overseas sales including
Chinese business

38.0

37.0

43.7

6.7

Ratio of overseas net sales

23.2%

23.4%

25.9%

North America
EuropeChina*ASEAN
Others
Products Total
Parts & Others

yoychange*Forecast : Announced on Feb 14
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

33Performance Forecast for FY Ending Dec.17(Operating Income and Forecast for the Year-End Dividend )Operating income
Item(JPY bn, %)FY ended FY ended FY ending
Dec.15
Dec.16
Dec.17
Restated
ActualForecast*yoychange【 Factors of YoY change(JPYbn,)】
２.８(Jan.-Dec.) (Jan.-Dec.) (Jan.-Dec.)

8.4
Gross Profit 45.1 44.9 47.7
2.8
Gross Profit Margin 28.8% 29.3% 29.5% 0.2%
S.G&A.Expenses 44.9
42.4 44.2
1.8
Net Sales

personnel expenses

Other expenses

Operating Income

156.8 153.1 161.5

26.1
18.8
0.2

25.0
17.4
2.5

26.2
18.0
3.5

1.2
0.6
1.0

※Forecast : Announced on Feb 14

Forecast for the year-end dividend
Dec.15Year-end Dividend

1.5

Dec.16(Plan) Dec.17(Forecast)

1.5

(１.８)

Operating
Income
３.５
Operating
Income
２.５

FY endedDec.16
ActualS.G&A
Increase

Increased
IncomeFY endingDce.17
Forecast

Operating Income +1.0

1.5～3.0 (yen)ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

34

４．Topics

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

Greater collaboration with YANMARISEKI and YANMAR expand collaboration in development &production areas for Domestic agricultural machinery (Announced on Feb.10)<Objectives><Areas >• Mutual supply of OEM products

Stablesupply to
the market

Shrinking demand for machinery
specialized in rice farming
Burgeoning demand for machinery
related to dry-field vegetable farming

Response toadvanced
technologies

Various needsin domestic
marketExpensereduction indevelopment& production• Joint development of products (TBA)
Effective useof resources• Expansion of common use of functional units• Collaboration in ICT for agriculture(M2M communication service)

Maintain brand identity
ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

36Merger of 2 consolidated manufacturing subsidiaries■We launched preparation for merging Iseki-Matsuyama Mfg.
Co., Ltd. with Iseki-Hoei Mfg. Co., Ltd. (Announced in Dec. 2016)<Objectives>• Enhance productivity• Reduce capital investment• Streamline indirect operations

Reinforce
Earnings structure<Scheduled date>• January 1, 2018

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

37[Reference] New release products in 2017 (Announced on Dec. 14, 2016)<Domestic>
Mini-tiller [Chocopuchi (KM17-W, KM27-W, KCR 605W)]
 Collaborative product with “Nogyou-jyoshi(female farmers)Project", promoted
by MAFF, for the 2nd time. The new product is designed “ for everybody tohandle easily” regardless of gender, age.
Release: In Dec. 2016

KCR605HXW

Rice transplanter with straight-travel assist system [Sanae NP80D-Z]
 Our new smart rice transplanter to follow former variable fertilizing ricetransplanter. With straight-travel assist function, it enables for everybody toplant the seedlings straight and in a simple way.
Release: In Dec. 2016
NP80D-Z (Straight-line assist mode)Walk-behind radish harvesting machine [VHD 102-S]
 We launched a walk-behind radish harvesting machine for the 1st time in theindustry. Light weight and compact body enables to load onto a lightweighttruck.
Release: In Mar. 2017

VHD 102-S

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

38

[Reference] New release products in 2017 (Announced on Dec. 14, 2016)<Overseas>Tractor for Chinese market [T804•954](80HP, 95HP)
 Light weight, compact but high horse power tractor for Chinese market.
Our long history of experience for wet-field rice farming are drawn on.
Release: In Dec. 2016
T954 Cabin modelAll-purpose combine harvesters for Southeast Asia market [HC80P]
 Suitable for crops & field features in Southeast Asia. The new productcontributes to increasing farm productivity and rapid diffusion of agricultural
machinery in Southeast Asia market.
Release: In Dec. 2016

For further information, please check our site.
URL: http://www.iseki.co.jp/

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

39

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.

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”.

ISEKI FY ending Dec. 16 Investor Relations Presentation Materials

40