Financial Results for the Fiscal Year Ended December 31, 2022

Investor Relations Presentation Materials

I S E K I & CO., LTD.
February 20, 2023

Index
1. Outline of Financial Results for the Fiscal Year
Ended December 31, 2022
2. Domestic and Overseas Markets
3. Performance Forecast for the Fiscal Year Ending
December 31, 2023
4. Progress of Mid-term Management Plan

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

2

1. Outline of Financial Results for the
Fiscal Year Ended December 31, 2022

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

3

Key Points<Financial Results For the FY Ended Dec. 2022>

Net Sales (Full-year)

Overseas sales hit a record high for the second consecutive year
Domestic sales decreased mainly due to the impact of a pullback effectwith withdrawal of subsidies, weak rice prices, and soaring material prices
Domestic:

Decreased willingness to buy due to weak rice prices and soaring material prices
Pullback effect with withdrawal of government subsidies for business continuity inthe previous fiscal year

Overseas:

Overseas sales hit a record highOperating
Income:Price revisions implemented in each region were unable to fully cover the impact ofsoaring raw material prices, putting pressure on earnings

Extraordinary
Income/Losses:

Gain on change in equity and impairment loss recorded<Forecast For the FY Ending Dec. 2023>
Increase in net sales & operating income
Year-end dividend: 30 yen per share
Net sales:
Profits:

YoY increase in both domestic and overseas sales
Profits expected to increase due to higher gross profit resulting fromhigher sales and price revisions, as well as further efforts for structuralreform and management efficiency improvement, despite pressure on
earnings due to soaring raw material prices
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

(JPY bn, %)155.9 149.8 149.3 158.1

166.6 176.5

Domestic

21.3% 21.5% 22.4% 25.8%
FY2018/12

FY2019/12

FY2020/12

FY2021/12

32.4% 31.2% Overseas
FY2022/12

FY2023/12

Forecast

Operating Income/Ratio (Full-year)(JPY bn, %)
60

2.0%

1.8%

2.6%
1.4%

50

4.1

40
30

3.1

2.1%

2.5%

3.0%

4.5

1.0%
-1.0%

3.5

2.7

-3.0%

2.0

20

-5.0%

10
0

-7.0%
FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

FY2023/12-9.0%

Forecast

4Market & Business Environments in FY Ended Dec. 2022
[Legend] = Market environment = Business environment

Market & Business Environments
 Impact of COVID-19<Overall> Supply chain disruption (delayed procurement of parts for production, etc.)
 Soaring raw material prices<Domestic>

 Impact on sales activities, including exhibition cancellations
 Pullback effect with withdrawal of government subsidies for business continuity<Overseas> North America: Compact tractors market entered an adjustment phase, but our shipments continued to
grow to recover the local inventory levels
 Europe: Increased demand due to lifestyle changes, sales to professionals also recovered Weak rice prices, soaring material prices<Domestic> Decrease in farmers’ willingness to buy

 Russia’s invasion of Ukraine<Overall> Sales: No direct impact as we do not conduct sales activities in this region
 Purchasing: Supply chain disruption, concern that raw material prices will soar further Yen depreciation<Overall> Operating income improved

 Soaring prices of crude oil and other fuels<Overall> Increased logistics and operating costs
Financial Results Briefing for the Fiscal Year Ended December 31, 20225

Outline of Consolidated Business Performance(January 1, 2022 to December 31, 2022)(JPY bn, %)FY2018/12 FY2019/12 FY2020/12

FY2021/12

FY2022/12

Actual%Diff.
(Target/Actual)*ActualActualActualActualNet Sales

155.9

149.8

149.3

158.1 100.0

166.6 100.0

8.4

0.1

(Domestic)

122.8

117.7

115.9

117.3

74.2

112.6

67.6

(4.7)

1.2

(Overseas)

33.1

32.1

33.3

40.7

25.8

53.9

32.4

13.1

(1.1)

Operating Income

3.1

2.7

2.0

4.1

2.6

3.5

2.1

(0.6)

(0.1)

Ordinary Income

2.6

1.1

1.7

4.6

3.0

3.7

2.3

(0.9)

(0.8)

Profit (Loss) Attributableto Owners of Parent

1.0

0.7

(5.6)

3.1

2.0

4.1

2.5

0.9

0.6

US$

110.2

109.3

107.0

109.0

131.3

22.3

(0.9)

Euro

130.9

121.6

121.5

129.8

136.9

7.1

(0.1)

Average
Exchange
Rate (JPY)%

YoY
Change* Difference from the forecast announced on 14th November 2022
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

6

Domestic Sales
YoY
JPY4.7 billion
decrease

Production delay due to supply chain disruptions and decreased willingness to buy due
to weak rice prices and soaring material prices
Maintenance revenues remained at the same level year on year
FY2019/12

FY2020/12

FY2021/12

FY2022/12

ActualActualActualActualActualYoY
ChangeCultivating &Mowing
Machinery

27.4

25.3

22.8

23.9

22.9

(1.0)

Planting
Machinery

9.1

9.0

8.8

9.0

7.9

(1.1)

Harvesting &Processing
Machinery

19.9

18.5

16.8

16.6

16.0

(0.5)

Subtotal

56.5

53.0

48.6

49.6

46.9

(2.7)

(0.3)

Farming
Implements

20.2

20.0

20.4

22.0

20.5

(1.4)

1.0

Spare Parts

14.8

15.0

15.6

15.3

15.6

0.2

0.2

Repair Fees

5.5

5.7

5.8

5.9

5.8

0.0

(0.2)

Subtotal

40.6

40.8

42.0

43.3

42.0

(1.3)

1.1

Total

97.1

93.8

90.6

93.0

88.9

(4.0)

0.8

Construction of Facilities

5.6

4.5

6.1

4.2

4.3

0.0

0.0

Others

19.9

19.3

19.1

20.1

19.3

(0.7)

0.3

122.8

117.7

115.9

117.3

112.6

(4.7)

1.2

Agricultural Machinery

Agricultural Machinery Related(JPY bn)

Total

Main factors for changes(In comparison with the previous year)

Diff.
(Target/Actual)*

FY2018/12

 Sales of agricultural machinery declined
due to production delay resulting fromsupply chain disruptions, decreased
willingness to buy caused by weak rice
prices and soaring material prices, aswell as a pullback effect with withdrawalof government subsidies for business
continuity
 Farming implements experienced apullback effect with withdrawal ofgovernment subsidies for business
continuity
 Maintenance revenues, such as spareparts sales and repair fee revenues,
remained at the same level year on year
* Difference from the forecast announced on 14th November 2022

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

7

Overseas Sales
YoY
JPY13.1 billion
increase

Sales hit a record high for the second consecutive year
Sales increased mainly in North America and Europe. Sales increased due to ISEKI
Germany becoming a consolidated subsidiary (+JPY3.6 billion)
FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12(JPY bn)

ActualActualActualActualActualYoY
ChangeMain factors for changes(In comparison with the previous year)

Diff.
(Target/Actual)*North America

11.5

13.2

12.8

15.1

19.5

4.3

(0.7)

Europe

13.8

12.8

13.9

15.9

25.1

9.1

(0.4)

Asia

7.3

5.5

6.2

9.1

8.6

(0.5)

(0.1)

Others

0.4

0.5

0.3

0.5

0.6

0.1

(0.1)

Total Sales

33.1

32.1

33.3

40.7

53.9

13.1

(1.2)



North
Compact tractors market entered
America: an adjustment phase, but our
shipments continued to grow torecover the local inventory levels

Europe:Sales increased, mainly to
consumers, as we captured market
developments associated withlifestyle changes, and sales toprofessionals also increased as
demand for landscaping recovered.
Sales also rose due to ISEKI
Germany becoming a consolidated
subsidiary (approx. +JPY3.6 billion)



Asia:

Sales decreased as higher
shipments to South Korea could
not offset lower shipments of semifinished goods to China and otherfactors* Difference from the forecast announced on 14th November 2022
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

8

Operating Income
YoY
JPY0.6 billion
decrease

Price revisions implemented in each region were unable to fully cover the
impact of soaring raw material prices, putting pressure on earnings

FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

ActualActualActualActualActual(JPY bn, %)YoYChangeNet Sales

155.9

149.8

149.3

158.1

166.6

8.4

Gross Profit

45.9

44.5

43.4

46.8

49.8

3.0

Gross Profit
Margin

29.5%

29.7%

29.1%

29.6%

29.9%

0.3%

SG&A Expenses

42.7

41.7

41.3

42.6

46.3

3.6

Personnel
Expenses

25.3

24.6

25.1

25.2

26.4

1.1

Other
Expenses

17.4

17.0

16.2

17.4

19.9

2.5

Operating Income

3.1

2.7

2.0

4.1

3.5

(0.6)

OperatingMargin

2.0%

1.8%

1.4%

2.6%

2.1%

(0.5)%

Diff.
(Target/Actual)*[Breakdown of YoY Change]
3.4

0.1

(2.8)

1.6

0.6

0.2

(1.0)

(2.4)

4.1

3.5

FY2021/12 Increased Impact of Effect of Sales ofgrosssoaring
price
blueprints
profitraw
revisionsdue tomaterial
higherpricessales(including
FX effect)(0.1)(0.1)%

(0.2)

Other
(grossprofit)Increased Increased
Other FY2022/12
logistics expenses (SG&A
expenses due to expenses)
improvementof labor
conditions,etc.
(including
FX effect)[Effect of FOREX Fluctuations (JPY bn)]
Net Sales

Cost of Sales

SG&A
Expenses

Operating
Income

3.7

(2.7)

(0.4)

0.6

* Difference from the forecast announced on 14th November 2022
Financial Results Briefing for the Fiscal Year Ended December 31, 20229

Ordinary Income & Profit
Ordinary income
YoY
JPY0.9 billion
decrease

Ordinary Income: Decreased due to the absence of one-time non-operating income recorded in the previous fiscal year andan increase in share of loss of entities accounted for using the equity method, despite an increase in foreign exchange gains
Profit: Increased due to extraordinary income such as the impact of making ISEKI Germany a consolidated subsidiary andgain on change in equity related to a Chinese associate accounted for using the equity method, despite impairment loss
FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12

Diff.
(Target/Actual)*Non-operating Income (YoY Change)

ActualActualActualActualActualYoY
ChangeOperating Income

3.1

2.7

2.0

4.1

3.5

(0.6)

Balance of Financial
IncomeOther Non-operating
Income

(0.7)

(0.7)

(0.6)

(0.6)

(0.7)

(0.1)

0.2

(0.8)

0.3

1.1

0.9

(0.1)

Ordinary Income

2.6

1.1

1.7

4.6

3.7

(0.9)

Extraordinary Income

0.1

0.5

0.6

0.0

3.3

3.3

Extraordinary Losses

(0.5)

(0.3)

(9.4)

(0.4)

(1.9)

(1.4)

Income Before Income
Taxes
Income Taxes Deferred
Profit (Loss) Attributableto Owners of Parent

2.2

1.3

(7.1)

4.3

5.2

0.8

(Gain on step acquisitions)

0.5

(1.1)

(0.5)

1.4

(1.1)

(1.1)

0.0

(Gain on bargain purchase)

0.2

1.0

0.7

(5.6)

3.1

4.1

0.9

(JPY bn)(0.1)▪ Foreign exchange gains

0.3▪ Absence of settlement received(0.4)▪ Share of loss of entities accounted
for using equity method

(0.2)

(0.8)
Extraordinary Income/Losses (YoY Change)▪ Impact of making ISEKI Germany aconsolidated subsidiary▪ Gain on change in equity

0.6▪ Impairment loss

0.7

2.5
(1.6)

* Difference from the forecast announced on 14th November 2022
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

10

Extraordinary Income/Losses■ Extraordinary Income
 Gain on change in equity:

2.5 Recorded due to a third-party allotment of shares by aChinese associate accounted for using the equity method

 Gain on step acquisitions:0.5

 Gain on bargain purchase:

0.2

Recorded as a result of acquiring additional shares of ISEKI
Germany and making it a consolidated subsidiary■ Extraordinary Losses
 Impairment loss

(1.5) Impairment loss recorded on business assets at ISEKIMatsuyama MFG. Co., Ltd. due to decreased profitability
caused by changes in the business environment[Changes in the business environment]▪ Production of lawn mowers transferred to PT. ISEKI Indonesia
as part of efforts to build an optimal production system▪ Production of drying machines discontinued (selection &concentration)
Financial Results Briefing for the Fiscal Year Ended December 31, 202211

Non-Consolidated Financial Results
Operatingincome YoY
JPY1.6 billion
decrease

As with the consolidated results, price revisions were unable to fully cover the
impact of soaring raw material prices, putting pressure on earnings

FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12(JPY bn, %)ActualActualActualActualActualNet Sales

93.1

90.0

79.2

91.7

97.4

5.6

Domestic

65.7

61.7

53.9

59.8

58.0

(1.7)

Overseas

37.4

28.2

25.2

31.9

39.3

7.4

Gross Profit

12.3

12.4

9.4

12.1

11.7

(0.4)

YoY
Change[Breakdown of YoY Change]
0.9

Gross Profit
Margin

13.2%

13.8%

11.9%

13.3%

12.0%

(1.3)%

SG&A Expenses

11.8

11.4

10.7

11.3

12.5

1.2

Operating
Income

0.5

0.9

(1.3)

0.8

(0.8)

(1.6)

Ordinary Income

2.4

2.2

(0.2)

3.8

1.2

(2.5)

Profit1.8

1.5(13.2)

2.9

(0.1)

(3.0)

(2.7)

1.4

(0.6)

(0.6)

0.8
(0.8)
FY2021/12

Increased
Impact of
Effect of pricegross profit
soaring raw
revisionsdue to higher material prices
sales

Increased
logistics
expenses

Increased
expenses due
toimprovementof labor
conditions,etc.

FY2022/12

Extraordinary Income/Losses (YoY Change)▪ Loss on valuation of shares of subsidiaries andassociates(1.2)▪ Provision of allowance for doubtful accounts(0.2)

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

12

Balance SheetYoY Change[Inventories]▪ Merchandise & Finished Goods: Increased mainly due to receipt delays caused by shortages of locally sourced
parts in North America and the impact of consolidation of ISEKI Germany▪ Work in Progress: Inventories of work in progress increased due to supply chain disruptions
As of Dec.
31, 2021

As of Dec.
31, 2022

YoY
ChangeAs of Dec.
31, 2021

As of Dec.
31, 2022

YoY
ChangeCash & Deposits

14.8

10.7

(4.1)

Accounts Payable - Trade

39.2

45.4

6.2

Accounts Receivable - Trade

21.5

27.5

6.0

Interest-bearing Liabilities

62.1

68.1

6.0

Inventories

49.8

65.3

15.4

(Loans Payable)

54.9

61.1

6.1

(Merchandise & Finished Goods)

41.5

53.5

12.0

Other Liabilities

19.6

20.4

0.7

(Work in Progress)

7.0

10.3

3.2

Other Current Assets

4.8

5.7

0.9

Total Current Assets

91.1

109.4

18.3

Total Liabilities

121.1

134.1

13.0

Property, Plant and Equipment

84.9

83.9

(1.0)

Net Assets

Intangible Assets

2.2

2.3

0.0

66.5

72.3

5.7

Investments and Other Assets

9.3

10.8

1.5

(Retained Earnings)

17.6

21.1

3.4

96.5

97.0

0.4

187.6

206.4

18.8

187.6

206.4

18.8

(JPY bn)

Total Non-current Assets
Total Assets

Total Liabilities and Net Assets

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

13

Interest-bearing Liabilities / Equity / DividendInterest-bearing
liabilities, equity,
dividend

Interest-bearing liabilities increased in line with the increase in inventories
Year-end dividend to be 30 yen per share

1. Interest-bearing liabilities & Equity

2. Dividend

Balance of Interest-bearing Liabilities
69.3

69.3

8.4

7.7

62.1
7.2

(JPY bn)

FY2021/12 FY2022/12
Actual
Plan

68.1
7.0

60.8

61.5

54.9

61.1

FY2019/12

FY2020/12

FY2021/12

FY2022/12

D/E Ratio

1.0

1.1

0.9

0.9

Equity Ratio

34.2%

32.4%

34.5%

32.9%

Interest-bearing
Liabilities (JPY bn)

69.3

69.3

62.1

68.1

Net Assets (JPY bn)

69.2

62.4

66.5

72.3

Lease
Obligations

Loans
Payable(JPY)

Year-end
Dividend

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

30

30

14

Capital Investment, Depreciation andResearch & Development Expenses
Capitalinvestment

Made investment in growth, including development of sales offices andinvestment in improving productivity

1. Capital investment *Property, plant and equipment andintangible assets after delivery(JPY bn)

10.8
7.8

2018/12Actual(Breakdown)

5.7

2019/12Actual2020/12Actual5.5

2021/12Actual5.6

2022/12ActualFY2021/12

FY2022/12

Sales offices

2.4

2.4

New models, increasing
productivity

1.2

1.1

Information technology

0.4

0.7

Other

1.5

1.4

Total

5.5

5.6

(JPY bn)

2. Depreciation, Research &Development Expenses
FY2021/12
ActualFY2022/12
ActualDepreciation

6.56

6.10

Research &development
expenses

1.27

1.61

(JPY bn)

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

15

Cash Flows
Cash flows

Cash flows from operating activities were ¥(3.3) billion due to an increase ininventories(JPY bn)

FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

ActualActualActualActualActualYoY Change

7.6

10.5

9.6

14.2

(3.3)

(17.6)

Profit before income taxes

2.2

1.3

(7.1)

4.3

5.2

0.8

Depreciation

6.7

6.8

6.9

6.5

6.1

(0.4)

Impairment loss, gain on bargain purchase, loss (gain) on
step acquisitions, loss (gain) on change in equity

0.1

0.1

8.6

0.1

(1.5)

(1.6)

Decrease (increase) in trade receivables

1.8

3.5

(1.8)

0.4

(5.1)

(5.5)

Decrease (increase) in inventories

(0.2)

(0.7)

3.2

2.4

(11.4)(13.8)

Increase (decrease) in trade payables

(1.0)

(1.8)

(0.8)

2.1

5.4

3.3

Cash flows from investing activities

(9.9)

(7.1)

(5.1)

(2.0)

(2.9)

(0.9)

Purchase of property, plant and equipment andintangible assets

(6.8)

(8.3)

(6.6)

(4.6)

(4.8)

(0.1)

Free Cash Flow

(2.3)

3.4

4.5

12.1

(6.3)

(18.5)

1.9

(2.3)

(2.1)

(8.3)

2.0

10.3

(0.4)

0.9

2.3

4.0

(4.1)

(8.1)

Cash flows from operating activities

Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

16

2. Domestic and Overseas Markets

Financial Results Briefing for the Fiscal Year Ended December 31, 202217

Domestic Agricultural Machinery Market Trends
Domestic
Agricultural
Machinery
DemandAgricultural machinery demand remained flat mainly due to soaring material
costs, despite the diminishing pullback effect with withdrawal of government
subsidies for business continuity and rice prices bottoming out■ Agricultural machinery demand (shipments in the industry)(9 principal machinery, moving annual total)(JPY bn)280
260

Over the counter price ofrice/60kg* (right axis)(JPY)

Consumption tax
increase (Oct.)Acceptance of applications
for government subsidies forbusiness continuity
1st (Oct.)240

2nd (Feb.)

220
200
Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec.
2018
2019
2020
2021
2022
*9 principal machinery: Tractors, combine harvesters, rice transplanters, tillers, drying machines, rice huskers, binders, harvesters, treatment
Source: Estimated by ISEKI from statistics provided by the Japan Agricultural Machinery Manufacturers Association*Over the counter price of rice: The Ministry of Agriculture, Forestry and Fisheries conducts monthly surveys
among suppliers of a certain size or larger regarding over the counter prices and volumes and publishes theresults as one of the major indices of rice trading prices.

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

18

ISEKI’s Performance (Key Products)

Variable fertilizer rice transplanter
certified as eligible for the “green
investment promotion tax
scheme”

Large Agricultural Machinery Smart Agricultural Machinery Sales remained at the same level as 2020, partly
due to the impact of supply chain disruptions on
production
 Aiming to expand sales in 2023 through production
recovery and the launch of new products<New large-sized Japan series products>■ Model change• 10-row rice transplanter with straighttravel assistance■ Model addition• Combine harvester with straight-travelassistance• Robot rice transplanter with variable
fertilizer specs

New product: 10-row rice transplanter withstraight-travel assistance■ All Japan series performance(number of units)
Combine harvesters

Rice transplanters

Tractors

2020

2021

2022

 Sales of smart agricultural machinery grew 107%,driven by mid-sized tractor with straight-travelassistance specs
 In 2023, the automatic steering series will be further
enhanced. Aiming to expand sales by stepping up
demonstrations■ Strong sales of mid-sized tractor
released in March 2022
■ Variable fertilizer rice transplanter
certified as eligible for the “green
investment promotion tax scheme” inJanuary 2023

Mid-sized tractor with straighttravel assistance (36/50/60hp)

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

■ Smart agricultural machinery
performance (amount)

Variable fertilizer ricetransplanter

107％

2020

2021

2022

19

Domestic Trends in Agricultural Administration■ Development of an agriculture, forestry, and fisheries policy under a new form ofcapitalism (4 pillars of the agriculture, forestry, and fisheries policy)
Development of 4 pillars of agriculture,
forestry, and fisheries policy

Response direction

Measures (extract)

Growth industrialization with smart
agriculture, forestry, and fisheries,
etc.

Horizontally roll out initiatives whose business benefits
have been proven to be high in demonstration projects

Development anddemonstration of smart
agricultural technology andsupport for production areas

Promotion of the export of agricultural,
forestry and fishery products and foods

Convert 10% of the agriculture, forestry, fisheries andfood industries to production for overseas markets,and maintain and strengthen production bases

Fostering of production areasand strengthening of supply
systems

Set goals for 2030: (1) Reduce chemical fertilizer usage
by 20%

Conversion to green
cultivation systems

Green transformation of the
agriculture, forestry, and fisheries
industry

Enhancement of food security(2) Expand organic farming area to63,000 ha
Secure stable supply of production materials andincrease production of import-dependent grains (wheat,soybeans, etc.)*Prepared by the Company based on documents from the Headquarters on Measures to Secure
Stable Supply of Food and Strengthen the Agriculture, Forestry, and Fisheries Industries
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

Mitigation of the impact ofsoaring prices of production
materials, etc.

Promote conversion of rice
fields to dry fields for the
production of wheat,soybeans, etc.

20

Domestic Trends in Agricultural Administration(Initial budget for FY2023)■ Outline of budget for agriculture, forestry and fisheries: ¥2,268.3 billion in total“Establish food security and promote sustainable growth of the agriculture, forestry and fisheries industry”<Primary budget allowances for agricultural machinery and facilities>
Classification*

Project name (outline)
RevisedConnection to 4 pillars of agriculture, forestry
and fisheries policy

BudgetInitialFood security〇

Power-up Project for Local Production Bases¥30.6 bn〇〇

Project for the establishment of a sustainable field crop production system,
Projects to create crop production areas¥35.0 bn〇

¥6.1 bn〇〇〇

Boosting wheat and soybean profitability and productivity〇

Financial support for comprehensive support for building strong agriculture¥12.1 bn〇

Measures to expand the use of domestic fertilizer resources, etc., measures toreduce the use of production materials¥13.0 bn〇

¥51.3 bn

〇

〇

〇

〇

Measures to expand the production and use of domestic feed〇〇

Smart agriculture comprehensive promotion measures as part of the Project forDevelopment and Demonstration of Technologies to Realize a Sustainable Food
Systems Strategy MeaDRI

〇
〇

〇

Smart

〇

Project for the improvement of agricultural land cultivation conditions¥20.0 bn〇

Special Project for Strengthening Profitability of Livestock and Dairy Farming(Livestock Clusters)¥55.5 bn〇〇

Subsidy for Supporting Efficient Use of Farmland¥1.5 bn〇

Comprehensive measures to promote a Sustainable Food Systems Strategy
MeaDRI¥3.7 bnGreentransformation〇¥5.6 bn〇

Exportpromotion〇〇*Classification: “Revised” – FY2022 Revised Budget, “Initial” – FY2023 Initial Budget
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

21

Environment-Friendly Smart Agriculture■ Promote environment-friendly smart agriculture
Robotic /straighttravelassisted
specs*Automatic
steering

Reduce fuel consumption throughwork optimizationRice transplanters: straight-travel & turningassistance, robot
Tractors: straight-travel assistance, robot
Combine harvesters: straight-travel assistance
Automatic weed suppression robot“Aigamo Robot”

Adjust the amount of fertilizer withsensors

Sensing

Partialfertilization

Variable fertilizer rice transplanters
Riding control machine (smart topdressing
system)Reduce fertilizer usage by fertilizing
only necessary areas
 In-ridge partial applicator (tractor farming
implement)

Introduction of automatic steering systems toagricultural machinery
Reduce fuel consumption by

13%(compared with previous models)

Reduce greenhouse gas emissions as well
Source: “Strategy for Sustainable Food Systems, MeaDRI” and “Basis for Amount ofReduction from Countermeasures in the Plan for Global Warming Countermeasures”

Reduce weeding time
Reduce fertilizer usage by approx.
30% (Rough estimation when variable fertilization is applied
for side dressing)Offer automatic adjustment
depending on crop growth
Reduce fertilizer usage byapprox. 30-50%

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

22

Promotion of Organic Agriculture
Water management and weed management
is the challenge
Sales launch in Jan.
Aigamo Robot
2023▪ Establish environment-friendly smart
Time required for weeding in
agriculture by combining ISEKI’s smart
organic farming is approx.
5 times more than inagricultural machinery and smart
conventional farming
agricultural technology with Aigamo
Aigamo Robot
Robot, an automatic weed suppression
significantly cuts work
robot, as a coretime

Expansion of organic farming inrice cultivation

Reference) Goals of organic agriculture initiatives

Business opportunities for related products

2030

1 million ha area

Establish next-gen
technology by 2040

63,000 ha area
Systematize anddisseminate
techniques used on
the ground(Examples)
Farming implements: landleveling, dike management

by 2050Develop and establish
Generalize cultivation
next-gen organic farming techniques that do nottechnology using smart
depend on chemical
technology, etc.
pesticides, etc.
2030

2040

Remote water
management

Farm management
tools, soil diagnosis,
GAP

2050

* Prepared by the Company based on extracts from “Current State of Organic Agriculture” (September 2022) published by Ministry ofAgriculture, Forestry and Fisheries

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

23

Domestic Product Development (Key Products)
up to 2022

2023

<Main new products>‣ Rice transplanter with straighttravel & turning assistance‣ Small and mid-sized tractor withstraight-travel assistance‣ Large-sized & All Japan series(tractor, rice transplanter, combine
harvester)Large
products• Robot tractor• Robot rice transplanter• Variable fertilizer rice transplanter• Yield monitoring combine
harvesterLow-price products ‣ Additional specs for large tractor
Small and medium ‣ Mid-sized tractor with low-pricespecs
products(volume zone)

Vegetable
cropping
machinery‣ Small tractor‣ Vegetable transplanter (additional
specs)‣ Large vegetable harvester‣ Riding control machine▼ Jan. Aigamo Robot▼ Jun.

▼ Apr.

New product of 10-row
class rice transplanterJapan▼ Dec. Addition of straight-travel assisted specs
to combine harvesters Japan
Addition of variable fertilizer specs torobot rice transplanter▼ Mar. Mid-sized tractor (press release)▼ Sep. Walking-type rice transplanter▼Oct.
▼ Dec.

Carrot harvester
Control machine/tiller, vegetabletransplanter

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

New products for second halfof 2023 to be announced

Smartagricultural
machinery24Market Trends (North America)
2022: Although the compact tractors market entered an adjustment phase, shipments to AGCO in North America
hit a record high due to continued growth in shipments to recover the local inventory levels
2023: Although the market is expected to slow down, we aim to further improve our market share through thereplenishment of inventories by pushing shipments from AGCO to dealers and aggressive sales promotion
measures by AGCO

North
America

1. Market Trends

3. Situation of ISEKI• ISEKI’s own shipments in 2022 (Jan.-Dec. 2022): YoY 113%

<Compact tractors market (Jan. to Dec.)>• Although units shipped in 2023 are expected to decrease year on
year, we aim to maintain the profit level by raising product prices

 Jan.-Dec. 2022: YoY 82%(1,000 units)
250

216

200
150
100

91

95

96

104

200 9

201 0

201 1

201 2

114

124

132

201 4

201 5

145

156

170

179

201 8

201 9

235

192

• We aim to further improve our market share and expand sales
through the replenishment of inventories by pushing shipmentsfrom AGCO to dealers and aggressive sales promotion measures
by AGCO

50
201 3

201 6

201 7

202 0

202 1

■ Consolidated net sales (from the Company to AGCO)

202 2(Source: Statistics provided by AEM)

（JPY bn）

19.5

20

2. Situation of AGCO (OEM Partner)
 Unit sales (Jan.-Dec. 2022)

15.1

15

12.7

12.8

FY2019/12

FY2020/12

11.5
10Unit sales at AGCO fell below the previous year’s level due
to difficulties in procuring local parts in addition to themarket adjustment phase from the second half of 2022

50
FY2018/12

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

FY2021/12

FY2022/12

25

Market Trends (Europe)
Europe2022: Units shipped by the Company exceeded the previous year due to the recovery of shipping containers. Historical high sales
were recorded due to continued sales growth at ISEKI France S.A.S. Consolidated net sales in Europe increased dramaticallypartly due to ISEKI Germany becoming a consolidated subsidiary (+JPY3.6 billion) in the second half
2023: Demand for products for professionals, our essential business, was stable despite fears of economic recession caused by
rapid inflation. Aiming to increase sales by replenishing distribution inventories and enhancing product lineup for consumers

3. Situation of ISEKI

1. Market Trends• Consumer demand remained strong
Demand for landscaping for professionals, our essential
business, was stable. However, product supply delays
continued mainly due to supply chain disruptions, anddistribution inventories remained low across the industry.

Some early order placement was accepted at thewholesale level

2. Local Sales• Replenish the distribution inventories of products for
professionals and enhance the product lineup including electric
products for consumers in 2023
• Aim to maintain profit level by raising product prices in 2023 as
we did in 2022 in response to soaring material prices andincreased logistics costs• Launch a limited sale of ride-on electric mower in the first half of2023 and carry out customer evaluations, etc. in preparation for
full-scale introduction■ Consolidated net sales: Europe(JPY bn)

 Unit sales (Jan.-Dec. 2022)

25.1

25

• Local distributors: YoY 108%20

√ ISEKI France S.A.S. posted record-high sales
Continuing sales growth since 2014 consolidation(annual growth rate of 10%)

15

13.8

12.8

13.9

15.9

10
5
0
FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

26

Market Trends (Asia: ASEAN)
ASEAN

Thailand: Demand for agricultural machinery stagnated in 2022 mainly due to weak rice prices and soaring prices ofmaterials such as fertilizers. Although sales at a consolidated subsidiary IST fell below the previous year’s level,
there were signs of a turnaround at the end of the year mainly due to the launch of new products for dry fields
Indonesia: Shipments for government tenders increased year on year in 2022 as a result of cooperation with local
distributors, and sales to general customers also expanded gradually

3. Situation of ISEKI

1. Market Trends<Thailand>
For paddy fields: Sluggish due mainly to weak rice prices andsoaring prices of materials such as fertilizers
For dry fields: Strong market for sugar cane and cassava.
Farmers’ willingness to buy stimulated by theincrease in purchasing prices of crops<Indonesia>
Shrinking budget for government tenders
The bidding scheme has also changed in 2023

2. Local Sales<Thailand>• Introduced a tractor for dry fields manufactured
by TAFE in India to the market• Aim to expand sales by enhancing productlineup and strengthening sales network
TAFE’s small-sized tractor<Indonesia>• Aim to expand general sales in addition to increasing
participation in tenders• PT. ISEKI Indonesia will increase production capacity (22,000
units)■ Production volume of PT. ISEKI Indonesia(1,000 units)
20

17.6

 Unit sales (Jan.-Dec. 2022)• Thailand (IST): YoY 90%

15.8

12.6
10.8
10

9.7

√ IST secured operating profit
0
2018

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

2019

2020

2021

2022

27

Market Trends (Asia: East Asia)
East Asia

China: Although the rice cultivation machinery market stagnated, Dongfeng Iseki focused on sales of products
complying with the Stage 3 emission standards, resulting in a year-on-year increase in sales in 2022. We
aim to expand sales with products that comply with the Stage 4 emission standards in 2023
Korea: Demand for agricultural machinery shrank mainly due to sluggish rice prices, but shipments to local
distributors, particularly those of the models (tractors/combine harvesters) introduced before the new
emission standards, increased year on year in 2022

1. Market Trends

3. Situation of ISEKI<China> Rice cultivation market struggled due to delays in subsidy
allocation and stagnant rice trading prices■ Trends in the Agricultural Machinery Industry by Product Type(YoY Change in Units)
Jan.-Dec. 2020 Jan.-Dec. 2021 Jan.-Dec. 2022
Rice Transplanters (riding)
Combine Harvesters (allpurpose, auto-threshing)
Tractors(medium- to large-sized)

128%

126%

92%

110%

118%

85%

136%

105%

117%

<South Korea> In line with moves toward large-scale farming, demand forlarge-sized, high-performance agricultural machinery heightened amidst a
declining and aging farming population

2. Local Sales (China and South Korea)<China> • Introduce products complying with the Stage 4 emission
standards• Change to the stake in Dongfeng Iseki (25%  18%)
<South Korea> Strengthen cooperation with local distributors andenhance the sales and service structure forprofessional farmers<Key cooperation areas>
Technical guidance and training, local assistance forcustomer support, support for sales promotion ofmodels that comply with new emission standards(JPY bn)■ Consolidated net sales: Asia (ASEAN/East Asia)

10

9.1

8.6

7.3

 Unit sales (Jan.-Dec. 2022):• China (Dongfeng Iseki): 155% YoY for rice transplanters (riding),
144% YoY for tractors/combine harvesters• South Korea (local distributors): over 100% YoY for the total of ricetransplanters (riding), tractors, and combine harvesters

5.5

6.2

5

0
FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

28

3. Performance Forecast for the Fiscal YearEnding December 31, 2023

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

29

Forecast of Consolidated Financial Results for the Fiscal
Year Ending December 31, 2023
Consolidated
Financial Results
Forecasts

YoY increase both in net sales and operating income
Year-end dividend: 30 yen per share(単位：億円)(JPY bn, %)FY2018/12 FY2019/12 FY2020/12

FY2021/12

FY2022/12

FY2023/12

YoY
ChangeActualActualActualActual%Actual%Forecast

%

155.9

149.8

149.3

158.1

100.0

166.6

100.0

176.5

100.0

9.8

(Domestic)

122.8

117.7

115.9

117.3

74.2

112.6

67.6

121.5

68.8

8.8

(Overseas)

33.1

32.1

33.3

40.7

25.8

53.9

32.4

55.0

31.2

1.0

Operating Income

3.1

2.7

2.0

4.1

2.6

3.5

2.1

4.5

2.5

0.9

Ordinary Income

2.6

1.1

1.7

4.6

3.0

3.7

2.3

4.0

2.3

0.2

Profit Attributable to
Owners of Parent

1.0

0.7

(5.6)

3.1

2.0

4.1

2.5

2.6

1.5

(1.5)

US$

110.2

109.3

107.0

109.0

131.3

130.0

(1.3)

Euro

130.9

121.6

121.5

129.8

136.9

140.0

3.1

30

30

0

30

30

30

‒

Net Sales

Average
Exchange
Rate (JPY)

Year-end Dividend (JPY)

Financial Results Briefing for the Fiscal Year Ended December 31, 202230

Domestic Sales Forecast
Sales are expected to increase due to higher sales of large-sized machinery and smart
agricultural machinery that respond to the structural changes in agriculture and theeffect of price revisions

Domestic
Sales

FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12 FY2023/12
ActualActualActualActualActualForecast

YoY
ChangeAgricultural Machinery

56.5

53.0

48.6

49.6

46.9

52.5

5.5

Faming Implements

20.2

20.0

20.4

22.0

20.5

21.5

0.9

Spare Parts

14.8

15.0

15.6

15.3

15.6

16.1

0.4

Repair Fees

5.5

5.7

5.8

5.9

5.8

6.2

0.3

40.6

40.8

42.0

43.3

42.0

43.8

1.7

Total

97.1

93.8

90.6

93.0

88.9

96.3

7.3

Construction of Facilities

5.6

4.5

6.1

4.2

4.3

5.6

1.2

Others

19.9

19.3

19.1

20.1

19.3

19.6

0.2

122.8

117.7

115.9

117.3

112.6

121.5

8.8

Agricultural Machinery Related(JPY bn)

Subtotal

Total

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

31

Overseas Sales Forecast
Overseas
Sales

The compact tractor market in North America is expected to remain in the adjustment
phase
Higher sales are expected in Europe and Asia
FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12 FY2023/12
ActualActualActualActualActualForecast

YoY
ChangeNorth America

11.5

13.2

12.8

15.1

19.5

18.8

(0.7)

Europe

13.8

12.8

13.9

15.9

25.1

26.2

1.0

Asia

7.3

5.5

6.2

9.1

8.6

9.4

0.7

Others

0.4

0.5

0.3

0.5

0.6

0.6

0.0

Total Sales

33.1

32.1

33.3

40.7

53.9

55.0

1.0

(JPY bn)

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

32

Main Factors for Changes in Operating Income Forecast
YoY
JPY0.9 billion

Despite pressure on earnings coming from the sharp rise in raw material prices, higher operating
income is expected due to an increase in gross profit resulting from higher sales and pricerevisions, as well as further efforts for structural reform and management efficiency improvement
FY2021/12(JPY bn, %)Operating Income

Actual4.1

2.5 *FY2022/12%

Actual2.6(2.4)

FY2023/12
%

3.5

2.1

3.5

Forecast

4.5(2.1)*YoY Change
%

Diff.

2.5

0.9 0.4%*Including the impact of ISEKI Germany becoming
a consolidated subsidiary

(0.5)

4.5

3.5
FY2022/12
ActualExchange
Rate
(JPY)

US$: 131.3
Euro: 136.9%

Increasedgross profit
due to higher
sales

Impact of
Measures forsoaring raw
soaring raw
material prices material prices,
etc.

Increased
SG&A
expenses

Operating Income 0.9
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

Others

FY2023/12
Forecast
US$: 130.0
Euro: 140.0

33

4. Progress of Mid-term Management Plan

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

34

Corporate Philosophy(Corporate Philosophy)
We strive to contribute to the creation the prosperous andsustainable society through "providing innovative products
and higher quality of services to the customers"(Long-Term Vision)

To be solution provider for"Agriculture and landscape”~Founding Philosophy~
To free farmers from exhausting labor
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

35

Long-Term Vision(Long-term Vision)
To be solution provider for "Agriculture and landscape”

Supporting “the farming full of dreams” and “beautiful landscapes, Creating the sustainable
future of “Agriculture and Landscape”
FarmingFood
production

Agricultural
machinery

Environmental
preservation

Landscapes

Food

Survival

Farmers

SDGs to be realized by the ISEKI Groupthrough its businessToward realization of a sustainable society✔ Supporting resilient agriculture✔ Landscaping for livable villages and towns✔ Environmental conservation for arecycling-oriented society

Foundation
for living

People & Society
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

36

Basic Strategies(Positioning of the plan)
ISEKI’s 100th anniversary in 2025―laying the foundations for the next 100 years(Basic strategies)

1

2(Targets)

Providing the best solutions
・We will focus on providing not only products but also services fromtangible to intangible.

Customers

Increasing corporate value by strengthening
profitability and governance

Employees,
shareholders,
suppliers

・We will make profitable corporate structure that can surely raise profits
beyond sales ups and downs

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

37

Points of the Basic Strategies■Direction of the basic strategies and initiatives
Providing the best solutions

Increase corporate value by strengthening
earnings and governance

Focus on providing services in addition to
products in a transition from products to services.

Transformation to a muscular structurethat can reliably generate earnings
without being affected by sales

Selection &concentration

Business modeltransformation

Improvingprofitability

ESG

Resource
concentration

Focus on service
provision

Toward an operating
margin of 5%

Meaning of our existence
Pursuit of sustainability• Product development andsales strategy integrating
domestic, overseas, anddevelopment & production• Promotion based on
information (digitaltransformation)• Adapt to the new normal• Structural reform through theestablishment of an optimal
production system• Improve management
efficiency from the perspectiveof group-wide optimization• Strengthen initiatives byreviewing ESG materiality
and contribute to the
SDGs• Further increase revenue
from maintenance• Perspective according to business• Introduction of an in-housecompany system

Visualization of
unprofitable businesses• Financial and capital strategies• Full utilization of personnel throughout the group⇒ Optimal allocation of personnel

38

Business Environment
Perception of environment constituting assumptions(at the time of the formulation of the Mid-Term
Management Plan)

Current perception of environment(2022)

 From “with COVID-19” to “post COVID-19,” global foodissues, climate change risks
 Change in business model (from products to services) Growing environmental awareness (exhaust emissions,electric vehicles) Growing demand for disclosure of non-financial
information, SDGs
 Response to changes in laws and regulations, compliance Prolonged spread of COVID-19
 Russia/Ukraine issue[Japan] Decline in number of farms and increase in large-scale
farming Crop conversion
 Smartification, regulatory reform Lowering of prices[Japan] Acceleration of smart agricultural technology
 Expansion of organic agriculture Sluggish rice prices
 Soaring material prices[Overseas] Diverse environments in each region
 Shift to advanced features Shift to lower prices(diverse needs)
 Intensification of competition[Overseas] Acceleration of electrification

Supply chain disruptions, soaring raw material prices,heightened geopolitical risks, soaring energy prices
 Growing needs for increased food production

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

39

Progress of Mid-Term Management Plan (Summary)Operating Income Margin

5%

5.0%

Improvementof gross
profit margin

Reductionof fixed
costs

5.0%

Improvementof management
efficiency

Structuralreform

2.5%

2.0%

1.6%

1.8%

1.4%

2.6％

2.1%

2021

2022

2.5%

0.0%
2016

Providing the best solutions

2017

2018

2019

2020

2023
(Forecast)

2024

2025

Domestic: Demand for agricultural machinery is on a gradual declining trend. Domestic sales fell short ofthe plan and the previous year
Overseas: Growth exceeded the Mid-Term Management Plan due to progress in North America andEuropeStrengthening profitability andgovernanceImproved profitability: Although price revisions and other measures were implemented in Japan andoverseas, they were not enough to offset cost increases. Cost reduction, production
optimization, and other measures are still work in progress→ Steadily implement our initiatives to quickly get back on track of the Mid-Term Plan
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

40

Progress of Mid-Term Management Plan
1. Providing the Best Solutions <Selection & Concentration /Domestic Market>
Progress of important measures (achievements)■ Sales of smart agricultural
machinery (monetary value)107%♦ Expand large-scale customers‣ Sales growth of smart agricultural machinery♦ Improvement of sales and service provision
capabilities
2020‣ Rolled out “Amoni”, an agricultural business solutions portal site

♦ Reform of revenue and cost structure of sales
companies‣ Implemented the “block strategy” in which trade areas andsales strategies are considered based on blocks in order to
optimize sites and personnel within those blocks

2021

2022

No. of sales
companies

No. of sales
offices

Of which, largescale bases

End of 2020

12

503

52

End of 2022

11

486

54

Challenges• A decline in sales of large models partly due to production impact• A decline in operating income of sales companies due to lower sales
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

41

Progress of Mid-Term Management Plan
1. Providing the Best Solutions <Selection & Concentration /Overseas Market>
Progress of important measures (achievements)

Overall
EuropeAsia

Overseas sales continued to grow, driven by Europe andNorth America♦ Reconstruction of sales network‣ In 2022, ISEKI Germany became a consolidated subsidiary→ Strengthen collaboration, generate synergies, and expand
the business scope♦ Expansion of products ‣ Limited sale of electrification products♦ Building a foundation with IST in Thailand as a startingpoint‣ Secured operating income by improving the profit structure♦ Expansion of products ‣ Introduced a small-sized tractor
manufactured by TAFE in India

Challenges• Concerns over market stagnation due to rising prices and interest rates• Improvement of sales in the ASEAN region centered on ISTPREMIUM TURFCARE LTD.
(non-consolidated)

ISEKI Germany(consolidated
subsidiary)

ISEKI France S.A.S.
(consolidated
subsidiary)

Overseas sales and Mid-Term Plan
North America

EuropeAsia

Mid-Term Plan

53.9

(JPY bn)

40.7

32.1

Actual

9.3

43.0

33.3
9.7

6.0

6.6

12.9

13.9

15.9

13.2

12.8

15.1

35.5
25.1

19.5

FY2019/12 FY2020/12 FY2021/12 FY2022/12 FY2025/12

Mid-term Management Plan (2021-2025)
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

42

Progress of Mid-Term Management Plan
1. Providing the Best Solutions <Selection & Concentration /Product & Development Strategy>♦ Japan: Response to large-scale farming‣ Enhanced lineup of smart agricultural machinery2022

Tractor with straight-travel assistance
Robot rice transplanter

Addition of mid-sized class
New product2023

Combine harvester with straight-travelassistance
Rice transplanter with straight-travelassistance

New product
Addition of 10-row class♦ Overseas: Response to brand expansion‣ India: Concluded a technical and business allianceagreement with TAFE
♦ Common: Safety and environmental responses,
up-front development‣ Commercialized electric mower (Europe)‣ Expanded emission regulations-compliant engines
produced in-house■ Status of commercialization of smart agricultural machinery (Japan)
Smart technology

Automation level

Progress of important measures (achievements)

Status of commercialization

Year

Level 3
Demonstration project in progress• Remotemonitoring typeLevel 2
Robot tractor• Human
Robot rice transplanter
monitoring type

2018
2022

Level 1
• Human riding
type

Tractor with straight-travel assistance
Rice transplanter with straight-travel & turning assistance
Combine harvester with straight-travel assistance

2021
2017
2023

Variable fertilizer rice transplanter
Yield monitoring combine harvester
Riding control machine (smart fertilizer top dressing)

2016
2015
2020

Sensing■ Electrification(Europe)■ Percentage of invention proposals related toadvanced technologies and Mid-Term Plan
% of invention proposals• Response to smart agricultural machinery and electrification

Mid-Term Plan

56

(%)

60

39

33
1

Challenges

Actual1

FY2020/12

FY2021/12

FY2022/12

FY2025/12

Mid-term Management Plan (2021-2025)
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

43

Progress of Mid-Term Management Plan
1. Providing the Best Solutions <Business Model Transformation>■ Japan: Farming implements / spare parts / repair
fees and Mid-Term Plan

Progress of important measures (achievements)♦ Service revenue‣ Japan: Maintenance revenue continued to increase‣ Overseas: (Europe) Consumer products (purchased products) increased(Thailand) Enhanced IST’s dealer sales and service support♦ Planning and implementation of new business models‣ Building a foothold for organic business
Promotion of organic agriculture with “Aigamo Robot” playing a central
role♦ Digital transformation, responding to the new normal‣ An agricultural business solutions portal site “Amoni”
Content was enhanced. The number of views also increased‣ Introduced “i-Magazine,” a support tool for centralized service
information management, to domestic sales companies→ Efficiency improvement of sales activities

Farming implements/spare parts/repair fees

(JPY bn)

40.8

43.3

42.0

1

41.7

Actual

Mid-Term Plan

42.0

42.1

FY2019/12 FY2020/12 FY2021/12 FY2022/12 FY2025/12

Mid-term Management Plan (2021-2025)■ “Aigamo Robot,” an automatic weed
suppression robot, will be on sale from
2023

(Initiatives to date)

Challenges• Japan: Decrease in sales of farming implements and slowdown inmaintenance revenue growth• Development of human resources for digital transformation
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

• Business alliance with the developer
Yukimai Design Co., Ltd. in 2021 andinvestment in the company in 2022
• Demonstration conducted in morethan 200 locations in 2022
44

Progress of Mid-Term Management Plan
2. Increasing Corporate Value by Strengthening Profitability and Governance <Improve
Profitability / Structural Reforms and Improvement of Management Efficiency>
Progress of important measures (achievements)♦ Establishment of an optimal production system and businessefficiency improvement‣ Transferred production of overseas products to PT. ISEKI Indonesia(from Jul. 2022)→ Transferred the production of lawn mowers. Increased production
capacity (started construction of a new building)‣ Ended in-house development and production of drying machines(Dec. 2022)‣ Implemented centralized management of purchasing and production
technology (shared services)‣ Response to the increase in large-scale farming → Increased cabin
production capacity (establishment of a subsidiary)

A step towards cost
reduction and productivity
improvement■ Production volume at PT. ISEKI Indonesia and MidTerm Plan
Production units

Actual

Mid-Term Plan

Expanding production system to 22,000 unit
capacity following production transfer/factory
expansion(Units)

19400

17600

Challenges

15680• Parts procurement disruption• Securing human resources at production sites→ Transfer of overseas products and selection and concentration of
production/procurement (establishment of an optimal production system
and review of domestic/external production classification)• Continuously high prices of raw materials, etc.
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

12600
1

FY2019/12

Plan before
production transfer

10760

FY2020/12

FY2021/12

FY2022/12

FY2025/12

Mid-term Management Plan (2021-2025)

45

Progress of Mid-Term Management Plan
2. Increasing Corporate Value by Strengthening Profitability and Governance <Improve
Profitability / Financial and Capital Strategy>
Progress of important measures■ Key management indicators♦ Generate cash flows‣ Operating CF was negative due to increased
Operating CF
inventories such as products for North(JPY bn)
America and work in progress at factories
Capital♦ Selection and concentration of investment
investment*‣ Concentrated on investments in priority(Depreciation)
domains and continued to reduce property,(JPY bn)plant and equipment
Property, plant♦ Reduction of interest-bearing liabilities
and equipment‣ Interest-bearing liabilities increased, but the D/E (JPY bn)
ratio remained unchanged from the previous
Interest-bearing
fiscal year
liabilities* D/E ratio (times)♦ Shareholder return‣ Plan to continue the year-end dividend of ¥30
ROE

Challenges• Profitability improvement throughvarious measures• Quick optimization of inventories

Shareholder
return (JPY)→ Improve
operating CF

Mid-term Management Plan: 2021-2025

FY2019/12

FY2020/12

FY2021/12

FY2022/12

FY2025/12

10.5

9.6

14.2

(3.3)

(5 year cumulative)(2 year cumulative: 10.8)

8.3

6.6

4.6

4.8

(6.8)

(6.9)

(6.5)

(6.1)

60.0
Thoroughimplementationof capital cost
perspectives

98.3

86.2

84.9

83.9

Trimming downof non-current
assets

1.0

1.1

0.9

0.9

0.8

1.1%

(8.8)%

5.1%

6.2%

8％

30

ー

30

30

Continuation of
stable dividends*Capital investment: Based on “Purchase of property, plantand equipment and intangible assets” in Cash flows

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

46

Progress of Mid-Term Management Plan
2. Increasing Corporate Value by Strengthening Profitability and Governance <ESG>
Progress of important measures (achievements)♦ Environment (E): Conservation‣ Formulated the Environmental Vision and reviewed
mid- to long-term environmental targets‣ Endorsed the TCFD Recommendations andimplemented TCFD disclosures

Mid- to long-term environmental targets and results (2021)
Reduce CO2 emissions at
global production bases

46% reduction by FY2030 65% or more by FY2025(compared with FY2014)
Actual reduction rate

ResultTarget

39.8%

50.3%

-31%

‣ Conducted engagement surveys‣ Introduced performance-linked evaluation compensation
and a performance-linked stock compensation plan
‣ Established the ESG Committee and Working Group (WG)
on ESG Promotion

Target reduction rate

65%

♦ Society (S): Enhance engagement♦ Governance (G): Increase corporate value

Ratio of eco-products indomestic sales

-21%

-46%
2014

2021

2022

2030

9.4%
2014

2021

2022

2025

Challenges• Enhancement of cooperation with supply chains (CSR procurement,
Scope 3)
• Response to growing requirements of non-financial information disclosure
Financial Results Briefing for the Fiscal Year Ended December 31, 2022

47

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”.

Financial Results Briefing for the Fiscal Year Ended December 31, 2022

48