February 14, 2024
Name of Company: ISEKI & CO., LTD.
Company Representative: President, Shiro Tomiyasu
Code number: 6310
Stock exchange listing: Tokyo Stock Exchange Prime Market
Enquiries: Investor Relations Section
General Manager, Fumitoshi Suzuki(Telephone: +81 3 5604 7709)

Project Z Measures

We hereby announce the following measures to be implemented as part of Project Z launched on November 14,
2023 to promote fundamental structural reforms and other changes.
1. Project Z Measures
Overview
Under Project Z, we will formulate and implement measures for achieving fundamental structural reforms anda growth strategy. The fundamental structural reforms will be short-term and focus on three core themes:
optimization of production, optimization of development, and intensification of domestic sales. In addition, thegrowth strategy will narrow down focus areas to concentrate resources on growth markets both in Japan andoverseas, with the aim of expanding our business.
Specific Measures(1) Fundamental Structural Reforms (Short-Term Focused Measures)
By 2025, manufacturing company management (in Matsuyama and Kumamoto) will be integrated, as will
the management of domestic wide-area sales companies. Human resources, investment, and systems will beintegrated and asset efficiency enhanced, which will improve profitability. With regard to development, wewill pursue focused measures to improve product profit margins in the short-term, and reduce the numberof models and types to enhance development efficiency, which will also enable us to streamline ourorganization.
(2) Growth Strategy Implementation
Overseas, we will accelerate profitability improvements and business expansion through region-specificstrategies that capture demand in each area. In Japan, we will further develop our business by concentrating
on areas symbolized by the keywords: large, cutting-edge, environment, and dry fields.
2. Future Plans
In 2024, we will be announcing additional measures.
For further details, please refer to the attached documents.

Project Z Measures
ISEKI & CO., LTD.
(Tokyo Stock Exchange Prime Market:6310 )February 14, 2024

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Index１．Mid-term Management Plan Progress
２．Strategy Outline
３．Fundamental Structural Reform
Short-Term Focused Measures
４．Growth Strategy2

Summary[Mid-term Management Plan Progress]✓ In 2024, the consolidated operating margin is set to reach 1.2% compared to the 5% target for 2025.
✓ Transformation to a robust structure capable of steadily generating revenue regardless of net sales has yet to be achieved.
✓ Overseas net sales have risen earlier than set out in the Mid-term Management Plan.

[Fundamental➢ Formulate and implement short-term focused measures
Structural Reform] ➢ Implement sweeping comprehensive business structural reforms
Short-Term FocusedMeasures(~2025)(Note) Announced here➢➢➢

Integrate manufacturing company management (Matsuyama & Kumamoto) July 2024Improve product-specific profit margins ~2025
Integrate the management of wide-area sales companies (domestic) January 2025

✓ More fundamental structural reform measures to be announced in 2024
Completion ofreforms(~2027)➢➢➢

Optimization of production: Investments to facilitate a domestic reorganization and expand
overseas sites
Optimization of development: Concentrate resources to accelerate the growth strategy
Intensification of domestic sales: Respond to changes in the market structure

By 2027, consolidated operating margin of 5% or higher, ROE of 8% or higher, DOE of 2% or higher[Growth Strategy]2024~

PBR of 1 or higher➢ Concentrate management resources to growth strategy segments
Overseas: Non-Agri products
Japan: Agri products (Large, cutting-edge, environment, dry fields)

3

MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Mid-term Management Plan Progress

4

MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Mid-term Management Plan Progress
Change in Consolidated Operating Margin✓ In 2024, the consolidated operating margin is set to reach 1.2% compared to the 5% target for 2025.
✓ Transformation to a robust structure capable of steadily generating revenue regardless of net sales has yet to beachieved.

5.0%
Mid-term
ManagementPlan

Actual performance
Projected

2.6%

2.5%
2.0%
1.6%

2016

2.1%

1.8%
1.4%

2017

2018

2019

2020

2021

2022

1.3%

1.2%

2023

2024

2025
5

MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Mid-term Management Plan Progress
Why hasn’t a 5% consolidated operating margin been achieved
under the current Mid-term Management Plan?
Operating margin

Gross profit(¥100 million)

Gross profit margin

5.0%

503

49829.9%

468

2.6%

2129.6%

29.6%

2.1%

221.3%

1.2%

23242125

22

23

売上総利益
SG&A expenses
中計Mid-term
511

Actual/Projected
実績

498
468

21年2425(¥100 million)

2122232425

売上総利益率
SG&A ratio➢ Gross Profit
・Price revisions have not kept up with increasing costs
・While business structural reforms and othermeasures have been implemented and have brought
about improvements, no progress has been made on
product-specific profit margins or production
optimization, resulting in a deviation from the Midterm Management Plan

28.3%

481

463

27.0%
29.6%

426

212222年

23年

2324年

2425

25年

販管費

29.9%
27.8%

30.1%

212223

24

21年

22年

23年

24年

2525年

➢ SG&A expenses
・SG&A ratio has deteriorated each year
・Insufficient capacity to implement measures that
reduce fixed costs

販管費率
28.6%

486
463

✓ Measures to counter drastic environmental changes have been insufficient,lacking both speed and depth✓ We have been unable to implement and achieve overall management reform
27.0%

426

21年

22年

23年

24年

25年

21年

27.8%

22年

23年

24年

25年

6MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Strategy Outline

7MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Project Z Launch
Objective
Sweeping comprehensive business structural reforms✓ Formulate and implement short-term focused measures(Date project established: November 14, 2023)➢ Reassess the internal structure from square one to construct a strong business foundation

2027

Consolidated operating margin: 5% or higher
ROE:
8% or higher
DOE:
2% or higher

PBR of 1 orhigher✓ Formulate and implement growth measures
Function✓ Flexibly and speedily implement sweeping comprehensive business structuralreforms✓ Facilitate the construction of business units and coordinate group vectors
8MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Growth Story
PBR
1 or higher

Project Z

2025

Vision2027[Short-term focused measures][Fundamental structural reform][Growth strategy]

Smart & Sharp

Address demand and build up capabilities.
(1) Improve profitability(2) Enhance asset efficiency(3) Allocate cash for growth

Operating margin
5% or higher
ROE
8% or higher
DOE
2% or higher

To be aSolution
Provider forAgriculture&LandscapeGrowthLeverage ISEKI technology to realize on a global scale(1) Automation & labor savings(2) Reduced impact on the environment for agriculture and landscaping.
9MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Overview of Project Z Measures

Fundamental structural reforms<Core Themes>
Optimization of
production

・Optimal allocation of manufacturing sites
and models produced
・Forward-looking capital investment
・Responding to environment andenhancing efficiency

Optimization ofdevelopment

・Concentration of development resources
・Common designs to enhance efficiency

Intensification ofdomestic sales

Growth strategy

・Consolidation to drive integration ofmanagement resources
・Redistribution of resources to growthmarkets
・Logistics improvements and inventory
reduction・Overseas
Deployment of strategy
specific to each region
・Domestic
Large, cutting-edge,
environment, dry fields<Direction for improvement>

Improve
profitability

Enhance asset
efficiency

Allocate cash forgrowth
10MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Smart & Sharp

Fundamental Structural Reform
Short-Term Focused Measures (~2025)

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MTMP Progress

Strategy Outline

Fundamental StructuralReform

Growth Strategy

Optimization of Production
July 2024 Integration of Manufacturing Company Management (Matsuyama & Kumamoto)
Accelerate the construction of optimal production structure<Basic Policy>“Create robustly-structured manufacturingcompanies”
PT. ISEKI
Tractors for overseas

ISEKI-Niigata
Ricetransplanters

ISEKI-Kumamoto
Combineharvesters

Integrate human resources, investment &systems to generate synergy throughgreater operational efficiency and costreductions➣ Enhance production efficiency➣ Effectively utilize human resources➣ Enhance asset efficiency➣ Reduce inventories➣ Reduce fixed costs

ISEKI-Matsuyama
Tractors, engines

ISEKIMinamiyoshida
CabinsConstruct a structure for expanding
production at PT. ISEKI Indonesia
ISEKIShigenobu
Farming
implements~2027

Optimization of production
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MTMP Progress

Strategy Outline

Fundamental StructuralReform

Growth Strategy

Optimization of Development
Reduce the numbers of models andtypes by 30% or more
Focus on growth strategy

Select &concentrateon models tobe developed✓ Growth rate
✓ Market scale

More efficient development & streamlined organization

Optimization
Full-scale launch✓ Processintegration✓ Greater indirect
efficiency

Integrate
manufacturing
company
management(Matsuyama & Kumamoto)Development & production
structure that creates valuable
products

Improve productprofit margins

Large, cutting-edge, environment, dry fields

Reformdevelopment
methods✓✓

Common design
Enhance efficiency

Reduce variable productcosts by 10% or more toimprove profit margins
in the short-term✓ Short-term focusedmeasures✓ Across all models✓ Unification of standards

Global design(Note) Global design: Common design for the productbase and exclusive design for those components thatdiffer depending on the region.

13MTMP Progress

Strategy Outline

Fundamental StructuralReform

Growth Strategy

Intensification of Domestic Sales
January 2025
Management integration of wide-area sales companies
Concentrate resources to enhance management efficiency
Improve product andcomponent distribution
Optimize inventory hubs and reassess
logistics to reduce distribution costs
Improve product and component distribution

Enhance inventory
management efficiency
Centralize nationwide inventory management for
more efficient management and inventory reduction
Inventories

Optimize inventory hubs

Reassess logistics

2023

2027

2030
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MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

GrowthGrowth Strategy

15

MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Growth Strategy
Overseas✓

Domestic

Roll out region-specific strategies to expand net sales✓Focus on large, cutting-edge, environment, field crops
Large model* sales volume

Net sales ratios (estimated)

FY2020

FY2030Combineharvesters
Ricetransplanters
Tractors

2024➢
Domestic

Overseas

2027

2030

Integrate sales companies to dynamically utilize personnel across a wide area
so as to acquire customers in growth markets

2027

~2025
Intellectual
property fordevelopment

Foundation✓ Focus investment on
developing capabilities forgrowth markets✓Advanced revenue management* Large models
Tractors: 75 hp or greater
Combine harvesters: 100 hp or greater
Rice transplanters: 8 rows or more

Cutting-edge
technology

Expand Level 1 & 2 automation

Level 3 automation

Environment
response

Expand response to variable fertilization

Electric products✓Optimization of production✓Optimization of development✓Intensification of domestic sales

16MTMP Progress

Strategy Outline

Fundamental StructuralReform

Growth Strategy

Growth Strategy
Establish & Practice Concrete Measures for Next Stage

Launch new products including
environmentally friendly products

Expand environmentally friendly products
including electric products
Expand consumer-focused products
Promote centralized inventory management, etc.

Bolster IST sales channels (corporate sales, etc.)

Asia

Collaborate with AGCO to further
increase shareEuropeNorth America

Overseas

Introduce TAFE production machinery
Introduce high-performance machinery(Note) IST: ISEKI’s Thai distributor subsidiary(Note) TAFE: Indian agricultural equipment manufacturer& ISEKI partner(Note) AGCO: OEM vendor

Precisely capturing demand in each region andaccelerating profitability improvements and business expansion
FY2020

FY2023

FY2030Net sales
CAGR 10%
Operating income
CAGR 20%(2020 ~ 2030）
Net sales

Net sales

North America(Australia)
EuropeAsia

Net sales
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MTMP ProgressFundamental StructuralReform

Strategy Outline

Growth Strategy

Growth Strategy
Domestic

Dynamically utilize personnel across a wide area

Expand know-how nationwide that has been gained from large
agricultural machinery markets as well as dry field and dairy farming
regions, and assign personnel to regions of market expansion

Demonstrate ability to offer solutions
to challenges agriculture is facing

Strengthen profitable businesses
Expand profitable businesses by sharing
strengths developed in each region

Declining agricultural
workforce

Large-scale

Farming implements
Spare parts

Food security

Dry fields

Environmental
considerations

Environmental
preservation

Cutting-edge
technology

Gross profit

Agricultural challenges

Profitable businesses

Pre-owned

Profit margin18

MTMP Progress

Strategy Outline

Fundamental Structural
ReformGrowth Strategy

Growth Strategy Narrowing Down Focus Areas◼ Business Portfolio
Growth Strategy Segments ➣ Non-Agri Products & Agri Products (Large)

Higher growth

Balloon size indicates net sales

Non-Agri

Agri

Guide: Products
Agri products

Non-Agri

Agri (Large)

Non-Agri products
Guide: Regions
Japan

Growthcornerstone

Growthstrategy

Valueimprovement

Key toprofitability

AsiaEurope
North America

Agri (Small)

Agri (Mid-sized)(Note) Prepared based on estimated 2030 net sales of ISEKI agricultural machinery products(Note) “Agri products” means agricultural machinery, and “Non-Agri products” means machinery not used for agriculture (environmental improvementmachinery, etc.)

Higher profits
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MTMP Progress

Growth Strategy

Business-Specific Earnings

Strategy Outline

Fundamental StructuralReform

Growth Strategy

Management Concept(Current structure)

ISEKI & CO., LTD.

Previous: Function-specific company perspective

Domestic Business
Division
Overseas Business
Division✓STP (segment, target, positioning)-based business strategy
Put into practice a market-oriented strategy✓Optimally allocate resources to further global expansion✓Practice profitability management to strengthen businessmanagement✓Establish specialized units to create new business(Business unit concept)
Customer(Agri)

Customer

Sales

Sales

Production

Production

Development

Development

Planning

Planning(Non-Agri)Environmental
improvement machinery

Target market/customer-specificbusiness unit perspective

Agricultural machinery

Orientation of measuresDevelopment &Production Division

Business management
20

MTMP Progress

Growth Strategy

Strategy Outline

Fundamental StructuralReform

Growth Strategy

Cash Allocation for Growth◼ Generate operating cash flow through improved profitability and enhanced asset efficiency and allocate that cash flow to structural reform,
growth investment, and shareholder returns. Although interest-bearing liabilities will increase through 2027, the level will decrease moving
forward to 2030.

Improve
profitability✓ Structural reform &growth investment

Generateoperatingcash flow

Enhanced assetefficiency➢Strategic priority growth areas
Large-scale, dry fields, environment,
cutting-edge, overseas➢

Human capital➢

System investment➢

Structural reform<Cash Allocation>■2024 ~ 2027 (4-year cumulative total)■2028 ~ 2030 (3-year cumulative total)✓ Shareholder returns

Loans payable

OCF

Structuralreform,growthinvestment,etc.

Reduction inloans payable

OCF
Shareholder
returns

Structuralreform, growthinvestment,etc.

Shareholder
returns✓ Reduction in interestbearing liabilities
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Future Plans
Announce additional measures

In 2024Net sales

Operating marginOverseas
国内

Mid-term Management Plan

ActualDomestic
海外Projected5.0%

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

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Governance Structure & Directors’ Compensation
Taking into account current severe business conditions and from the perspective of speeding up decision-making andpromoting diversity, the structure of company directors and their compensation will be revised as follows.
1. Structure of company directors (scheduled to be presented to the General Meeting of Shareholders in March 2024)(1) Internal directors Currently 6 → 5 after General Meeting of Shareholders(2) Outside directors Appoint two female directors (no change in number)

CurrentAfter General
Meeting ofShareholders

Internal directors

65

Outside directors

33Total982. Directors’ compensation
We have introduced a system of performance-linked compensation for directors. The representative directors will not
be paid any performance-linked evaluation compensation (money) on the 2023 performance, and the amounts ofcompensation paid to directors (internal) and corporate officers will be reduced.

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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.

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