February 13, 2019
ISEKI & CO., LTD.
Supplementary Information to Consolidated Financial Results(January 1, 2018 – December 31, 2018)
I. Consolidated results of operations for the fiscal year ended December 31, 2018
Year-on-year change(Billions of yen, %)Forecast for
FY ended
Change vs.
December 31,
forecast
2018*

FY ended
December 31,
2017

FY ended
December 31,
2018

Amount%

158.4

156.0

(2.4)

(1.5)

155.0

1.0

Domestic

123.1

122.8

(0.3)

(0.3)

121.9

0.9

Overseas

35.3

33.2

(2.1)

(6.0)

33.1

0.1

46.2

46.0

(0.2)

(0.6)

46.5

(0.5)

Gross profit margin

29.2%

29.5%

0.3%

－30.0%(0.5)%

Selling, general andadministrative expenses

42.2

42.8

0.6

1.2

43.3

(0.5)

Operating income

4.0

3.2

(0.8)

(19.6)

3.2

0.0

2.5%

2.0%

(0.5)%

－

2.1%

0.0%

Net sales

Gross profit

Operating income ratio
Balance of financial
income

(0.7)

(0.8)

(0.1)

－(0.7)(0.1)

Other non-operating
income

0.9

0.2

(0.7)

－

0.1

0.1

4.2

2.6(1.6)(38.1)

2.6

0.0

Ordinary income ratio

2.7%1.7%(1.0)%

－

1.7%

0.0%

Extraordinary income

0.5

0.1(0.4)

－

0.2

(0.1)

Extraordinary losses

(0.9)

(0.5)

0.4

－(0.4)(0.1)

Income before income taxes

3.8

2.2

(1.6)

(41.9)

2.4

(0.2)

(1.0)

(1.1)

(0.1)

－(1.0)

(0.1)

2.8

1.1

(1.7)

(61.1)

1.4(0.3)

Ordinary income

Income taxes
Profit attributable to ownersof parent1

(Sales breakdown)(Billions of yen)
FY ended
December 31,
2017

Agricultural machinery

57.1

FY ended
December 31,
2018
56.6

Year-on-yearchange(0.5)

Forecast for
FY ended
December 31,
2018*

Change vs.
forecast

55.9

0.7

Farming implements

19.7

20.2

0.5

20.5(0.3)

Spare parts

14.7

14.8

0.1

14.9(0.1)

Repair fees

5.4

5.6

0.2

5.6

0.0

Totals agriculturalmachinery related

96.9

97.2

0.3

96.9

0.3

Construction of facilities

6.6

5.7(0.9)

5.4

0.3

Other agriculture-related
business

19.6

19.9

0.3

19.6

0.3

Domestic sales total

123.1

122.8(0.3)

121.9

0.9

North America

9.1

10.8

1.7

10.7

0.1

Europe10.7

10.90.2

11.4(0.5)

China

3.8

1.0(2.8)

1.00.0ASEAN

4.8

3.9(0.9)

3.7

0.2

Others2.7

1.8(0.9)

1.70.1

Product sales total

31.1

28.4(2.7)

28.5(0.1)

Spare parts

2.5

2.6

0.1

2.8(0.2)

Others

1.7

2.2

0.5

1.8

0.4

Overseas sales total

35.3

33.2(2.1)

33.1

0.1

Total net sales

158.4

156.0(2.4)

155.0

1.0

*Forecast released on November 12, 2018.
1) Year-on-year change(1) Net sales: ¥156.0 billion (down ¥2.4 billion (1.5%) year on year)
 Sales in Japan: ¥122.8 billion (down ¥0.3 billion (0.3%) year on year)
Overall sales related to agricultural machinery increased by ¥0.3 billion due to sales of ricetransplanters and farming implements remaining favorable with the launch of new products, even as
demand for agricultural machinery remained weak and sales of tractors decreased.
Construction of facilities decreased by ¥0.9 billion.
 Sales overseas: ¥33.2 billion (down ¥2.1 billion (6.0%) year on year)
Sales in North America increased by ¥1.7 billion mainly due to the disappearance of the effects ofpartial changes in business terms with an OEM partner made in the previous year.
Sales in Europe increased by ¥0.2 billion mainly due to the launch of new products.
Sales in China decreased by ¥2.8 billion mainly due to decreased shipments of semi-finished ricetransplanters accompanying local inventory adjustments.
Sales in ASEAN decreased by ¥0.9 billion due to decreased shipments of combine harvesters forIndonesia and tractors for Thailand.
(2) Revenue: Operating income or loss declined year on year primarily as a result of a decrease ingross margin due to decreased revenue and temporary factors such as the application of theprinciple of calculating retirement benefits upon the merger of subsidiaries, as well as increased
development costs for products responsive to emission gas regulations, etc., and increased
personnel expenses. Ordinary income or loss worsened due to deteriorated earnings of ourequity-method affiliate in China that was hit by the sluggish economy.
 Operating income: ¥3.2 billion (down ¥0.8 billion year on year)2 Ordinary income: ¥2.6 billion (down ¥1.6 billion year on year) Profit: ¥1.1 billion (down ¥1.7 billion year on year)
Operating income decreased by ¥0.8 billion primarily as a result of a decrease in gross margin due todecreased revenue and temporary factors such as the application of the principle of calculating
retirement benefits upon the merger of subsidiaries, as well as increased development costs for
products responsive to the fourth emission gas regulations, etc., and increased personnel expenses,
despite improvements in revenue due to the revenue and cost structure overhaul in domestic dealers
and the disappearance of the loss on construction of facilities recorded in the previous period.
Ordinary income decreased by ¥1.6 billion mainly due to a worsening in foreign exchange gains orlosses and in the share of profit or loss of entities using the equity method, while also recording
technical support fee (non-operating income), etc.
Profit decreased by ¥1.7 billion due to the tax expenses as well as the lack of the extraordinary income(losses) recorded in the previous year such as subsidy income related to the Kumamoto Earthquake andfacility contract penalties.
2) Comparison with the forecast(1) Net sales: ¥1.0 billion higher than the forecast (Japan: ¥0.9 billion, overseas: ¥0.1 billion) Agricultural machinery sales were ¥0.7 billion higher than the forecast, as the tractor sales exceeded
the forecast. Overall sales in Japan were ¥0.9 billion higher than the forecast.
 Sales overseas were almost in line with the forecast.
(2) Revenue Operating income and ordinary income were almost in line with the forecast.
 Profit was ¥0.3 billion lower than the forecast due to factors such as recording loss on valuation ofinvestment securities.
3) Dividends: We plan to pay the year-end dividends in the amount of ¥30.0 per share.

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II. Consolidated financial results forecast for the fiscal year ending December 31, 2019
[Consolidated financial results forecast for the fiscal year ending December 31, 2019](January 1, 2019 through December 31, 2019)(Billions of yen)
Year-on-year change

FY ended
December 31,
2017

FY ended
December 31,
2018

Forecast for FY
endingDecember 31,2019

158.4

156.0

164.0

8.0

5.2

Domestic123.1

122.8

126.7

3.9

3.2

Overseas

35.3

33.2

37.3

4.1

12.5

Operating income

4.0

3.2

4.0

0.8

25.8

Net sales

Operating income ratio
Ordinary income
Ordinary income ratio
Profit attributable to ownersof parent

2.5%
4.2

2.0%
2.6

2.7%
2.8

1.7%
1.1

Amount

2.4%
2.6
1.6%
1.6

0.4%

%

－0.0(1.1)(0.1)%－0.5

46.7* The assumed foreign exchange rates for the fiscal year: ¥108 per U.S. dollar¥125 per euro
[Rationale for the financial results forecast]1) Net sales
 Sales in Japan: ¥126.7 billion (up ¥3.9 billion year on year)
Overall sales in Japan are expected to increase by ¥3.9 billion year on year owing to projected
higher sales of agricultural machinery and farming implements, parts, and repair fees as farmers
implement shifts of production to large-scale farming, dry field farming, and vegetableproduction.
 Sales overseas: ¥37.3 billion (up ¥4.1 billion year on year)
Overall sales overseas are expected to increase by ¥4.1 billion year on year owing to increased
sales in the steady areas of North America, Europe, and neighboring countries in Asia, despite
decreased orders in China and Thailand due to inventory adjustments.
2) Revenue Operating income: ¥4.0 billion (up ¥0.8 billion year on year)
Operating income is expected to increase by ¥0.8 billion year on year due to an increase in grossprofit as a result of increased sales, as well as revenue and cost structure overhaul in domestic
dealers, the effects of improved profitability in overseas products, and other factors, which willoffset an increase in selling and administrative expenses.
 Ordinary income: ¥2.6 billion
Ordinary income is expected to remain the same year on year due to factors including the lack oftechnical support fee (non-operating income) recorded in the previous fiscal year.
[Year-end dividend forecast for the fiscal year ending December 31, 2019]
We plan to pay the year-end dividends in the amount of ¥30.0 per share for the fiscal year ending
December 31, 2019.
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