Financial Results for the Second Quarter
Fiscal Year Ending December 31, 2022

Investor Relations Presentation Materials

ISEKI & CO., LTD.
August 22, 2022

INDEX

1. Outline of Financial Results for the Second Quarter
Fiscal Year Ending December 31, 2022
2. Domestic and Overseas Markets
3. Performance Forecast for the Fiscal Year Ending
December 31, 2022
4. Topics

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

2

1. Outline of Financial Results for the Second Quarter
Fiscal Year Ending December 31, 2022

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

3

Key Points<Second Quarter Financial Results>
Strong sales overseas, but domestic sales decreased due to the impact of a pullback
effect with withdrawal of subsidies and falling rice prices.
Domestic: Pullback effect with withdrawal of government subsidies forbusiness continuity, etc., which had stimulated demand in thesame period of the previous year
Decrease in purchasing power due to falling rice prices
Overseas:

Earnings:

Sales increase in all regions(North America) Compact tractors market entered an adjustment phase, butorders to recover the local inventory levels were brisk.
Delay in recording part of sales due to a system failure at an
OEM partner(Europe)
Strong sales as we catered to lifestyle changes

2Q Net Sales(JPY bn, %)

82.2

72.2

86.6

86.7
Domestic

22.3%

22.7%

20.8%

27.7%

33.6% Overseas

18/12期…
19/12期…
20/12期…
21/12期…
22/12期…
FY2018FY2019FY2020
FY2021
FY2022
2Q

2Q

2Q

2Q

2Q

2Q Operating Income, Ratio
4.7(JPY bn, %)Soaring raw material prices and supply chain disruption put pressure on
earnings
Increase in SG&A expenses, such as distribution cost

<Full-year Forecast>

77.5

2.1

2.5
1.6

1.2

[Operating Margin]

No revision to the initial forecast
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

2.7%

2.1%

1.8%

5.4%

3.0%

FY2018
18/12期
2Q
2Q

19/12期
FY20192Q
2Q

FY202020/12期
2Q
2Q

21/12期
FY2021
2Q

22/12期
FY20222Q
2Q

4

Market & Business Environments in the Second Quarter[Legend]  = Market environment = Business environment

Market & Business Environments
 Impact of COVID-19<Overall>Supply chain disruption (shortage of containers for marine transportation, delayed procurement of parts for production)
Soaring raw material prices<Domestic>Impact on sales activities, including exhibition cancellations
Pullback effect with withdrawal of government subsidies for business continuity, which had stimulated demand in thesame period of the previous year.

North America: Compact tractors market entered an adjustment phase, but orders to recover the local inventory levels
were brisk.
Europe: Increased demand due to lifestyle changes<Overseas> Falling domestic rice prices (June 2020: ¥14,225/60kg ⇒ June 2021: ¥12,618/60kg) *1<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>

Minor impact on operating income*1 Relative trading price (average of all grades) Source: Monthly Report on Rice, Ministry of Agriculture, Forestry and Fisheries
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 20225

Outline of Consolidated Business Performance(January 1, 2022 to June 30, 2022)(JPY bn, %)FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

2Q Actual

2Q Actual

2Q Actual

2Q Actual

2Q Actual

YoY
ChangeNet Sales

82.2

77.5

72.2

86.6

86.7

0.0

(Domestic)(Overseas)

63.9
18.3

59.9
17.5

57.2
14.9

62.6
24.0

57.5
29.1

(5.0)
5.1

Operating Income

2.1

1.6

1.2

4.7

2.5

(2.1)

Operating Margin

2.7%

2.1%

1.8%

5.4%

3.0%

(2.4)%

Ordinary Income

1.8

0.8

1.0

5.5

3.3

(2.1)

Profit (Loss) Attributableto Owners of Parent

1.6

0.6

0.9

4.1

2.5

(1.5)

US$

108.8

110.7

108.5

106.8

119.2

12.4

Euro

133.1

125.7

119.7

129.1

131.6

2.5

Average
Exchange
Rate (JPY)

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

6

Domestic Sales
YoY
JPY5.0 billion
decrease

Pullback effect with withdrawal of government subsidies for business continuity, etc., which had
stimulated demand, and decreased willingness to buy due to falling rice prices
Maintenance revenues maintained
FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

2Q Actual

2Q Actual

2Q Actual

2Q Actual

2Q Actual

Cultivating &Mowing
Machinery

16.3

15.1

13.3

14.7

14.3

(0.3)

Planting
Machinery

6.4

6.1

5.5

6.4

5.5

(0.9)

Harvesting &Processing
Machinery

5.4

5.3

4.3

4.8

5.4

0.5

Subtotal

28.2

26.6

23.1

25.9

25.3

(0.6)

Farming
Implements

11.7

11.9

10.6

13.5

10.9

(2.5)

Spare Parts

6.8

6.8

7.1

7.2

7.2

(0.0)

Repair Fees

2.6

2.6

2.7

2.8

2.8

(0.0)

Subtotal

21.2

21.4

20.6

23.6

21.0

(2.6)

Total

49.5

48.1

43.8

49.6

46.3

(3.2)

Construction of Facilities

3.3

1.3

3.0

1.9

1.2

(0.6)

Others

11.0

10.4

10.3

11.0

9.8

(1.1)

63.9

59.9

57.2

62.6

57.5

(5.0)

Agricultural Machinery

Agricultural Machinery Related(JPY bn)

Total

YoY Change

Main factors of YoY changes
 Sales of agricultural machinery and farming
implements declined due to decreased
willingness to buy caused by falling rice
prices, in addition to a pullback effect withwithdrawal of government subsidies forbusiness continuity, etc., which had
stimulated demand.
 Although revenues from machinery andfarming implements declined, maintenancerevenues, such as spare parts sales andrepair fee revenues, maintained the samelevel year on year.

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

7

Overseas Sales
YoY
JPY5.1 billion

Sales increased in all regions due to sales promotion that meets market needs and yen
depreciation
FY2018/12(JPY bn)

FY2019/12

FY2020/12

FY2021/12

FY2022/12

2Q Actual

2Q Actual

2Q Actual

2Q Actual

2Q ActualNorth
America

5.8

6.6

5.0

7.8

8.4

0.5

Europe

7.7

7.3

6.4

10.8

14.2

3.4

Asia

4.5

3.3

3.4

5.1

6.1

0.9

Others

0.1

0.2

0.1

0.2

0.3

0.1

Total sales

Main factors of YoY changes

YoY Change

18.3

17.5

14.9

24.0

29.1

5.1



North
America:

Sales increased as orders to recover
the local inventory levels were brisk,
although compact tractors market
entered an adjustment phase
There was a delay in recording partof sales due to a system failure at an
OEM partner

Europe:Sales increased due to strong sales,
mainly to consumers, as we catered
to lifestyle changes, and sales toprofessionals also increased as
demand for landscaping recovered



Asia:

Sales increased due toconcentration of shipments due toStage 5 emission standards in South
Korea

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

8

Operating Income
YoY
JPY2.1 billion
decrease

Decrease in gross profit due to the impact of higher raw material prices
Increase in SG&A expenses, such as distribution cost
[Breakdown of YoY Change]

FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

2Q Actual

2Q Actual

2Q Actual

2Q Actual

2Q Actual

Net Sales

82.2

77.5

72.2

86.6

86.7

0.0

Gross Profit

23.5

22.5

21.4

25.7

25.1

(0.6)

Gross Profit
Margin

28.6%

29.1%

29.7%

29.8%

29.0%

(0.8)%

SG&A Expenses

21.3

20.8

20.1

21.0

22.6

1.5

(JPY bn, %)YoYChangeGross profit: (0.6)(1.3)

Personnel
Expenses

12.4

12.2

12.0

12.3

12.8

0.4

Other Expenses

8.9

8.6

8.1

8.7

9.7

1.0

Operating Income

2.1

1.6

1.2

4.7

2.5

(2.1)

2.7%

2.1%

1.8%

5.4%

3.0%

(2.4)%

OperatingMargin0.4

SG&A expenses: (1.5)

0.3

(0.5)

(0.2)

(0.4)

(0.4)

4.7
FY2021/12
2Q

2.5
Impact ofsoaringrawmaterial
prices, etc.

Responsetosoaringrawmaterial
prices

Impact ofexchangerate(grossprofit)Increased
logistics
expenses

Impact ofexchangerate(SG&A
expenses)

Improvement oflaborconditions,etc.

Increased
SG&A
expenses

FY2022/12
2Q[Effect of FOREX Fluctuations (JPY bn)]
Net Sales

Cost of
Sales

SG&A
Expenses

Operating
Income

1.5

(1.2)

(0.2)

0.1

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 20229

Ordinary Income & Profit
Ordinary income
YoY
JPY2.1 billion
decrease

Ordinary income decreased by approximately the same amount as operating income due
to an increase in foreign exchange gains, despite the absence of one-time non-operating
income recorded in the same period of the previous year
FY2018/12(JPY bn)

FY2019/12

FY2020/12

FY2021/12

FY2022/12

YoY Change
2Q Actual

2Q Actual

2Q Actual

2Q Actual

2Q Actual

Operating Income

2.1

1.6

1.2

4.7

2.5

(2.1)

Balance of Financial
Income

(0.3)

(0.3)

(0.3)

(0.3)

(0.3)

0.0

Other Non-operating
Income

0.0

(0.4)

0.1

1.1

1.0

(0.0)

Ordinary Income

1.8

0.8

1.0

5.5

3.3

(2.1)

Extraordinary Income

0.1

0.1

0.6

0.0

0.0

0.0

Extraordinary Losses

0.0

(0.1)

(0.1)

(0.1)

(0.2)

(0.0)

Income Before Income
Taxes

1.8

0.7

1.6

5.4

3.1

(2.2)

Income Taxes Deferred

(0.2)

(0.1)

(0.6)

(1.2)

(0.6)

0.6

Profit (Loss) Attributableto Owners of Parent

1.6

0.6

0.9

4.1

2.5

(1.5)

Non-operating Income (YoY Change)

Foreign exchange gains

0.4

Absence of settlement
received, etc.

(0.4)

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

10

Balance SheetYoY Change

Inventories
・Merchandise & Finished Goods: Increased as we responded to shortages of local distribution inventories
・Work in Progress: Inventories of work in progress increased due to supply chain disruptions
Change from
Dec. 31,2021

As of Jun.
30, 2021

As of Dec.
31, 2021

As of Jun.
30, 2022

YoY
ChangeCash & Deposits

14.3

14.8

13.2

(1.6)

(1.0)

Accounts Receivable Trade

32.1

21.5

34.3

12.7

Inventories

47.7

49.8

53.1

(Merchandise & Finished
Goods)

40.0

41.5(Work in Progress)

6.5

Other Current Assets

Change from
Dec. 31,2021

As of Jun.
30, 2021

As of Dec.
31, 2021

As of Jun.
30, 2022

Accounts Payable - Trade

41.1

39.2

44.4

5.1

3.3

2.1

Interest-bearing Liabilities

67.2

62.1

67.1

4.9

(0.1)

3.2

5.3

(Loans Payable)

59.4

54.9

60.1

5.1

0.6

42.2

0.7

2.2

Other Liabilities

19.6

19.6

20.9

1.2

1.2

7.0

9.5

2.4

2.9

3.5

4.8

3.6

(1.1)

0.0

Total Current Assets

97.8

91.1

104.3

13.2

6.5

Total Liabilities

127.9

121.1

132.4

11.3

4.4

Property, Plant andEquipment

85.4

84.9

84.6

(0.3)

(0.8)
Net Assets

67.0

66.5

68.8

2.3

1.8

Intangible Assets

2.2

2.2

2.3

0.1

0.1

Investments and other
Assets

9.5

9.3

9.9

0.6

0.4

(Retained Earnings)

18.6

17.6

19.5

1.9

0.9

Total Non-current Assets

97.2

96.5

96.9

0.4

(0.2)

Total Assets

195.0

187.6

201.3

13.6

6.2

Total Liabilities and Net
Assets

195.0

187.6

201.3

13.6

6.2

(単位：億円)(JPY bn)

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

YoY
Change11

Equity Ratio / Interest-bearing Liabilities
Interest-bearing liabilities remained at the same level year on year
D/E ratio was 0.97
100

80

76.8

75.2

74.1

72.4

67.2

67.1

Jun. 2021

Jun. 2022

Equity Ratio (%)

Balance of Interest-bearing Liabilities (JPY bn)

Interest-bearing
liabilities, D/E ratio

60

40Jun. 2017

Jun. 2018

Jun. 2019

Jun. 2020

Loans payable,
corporate bonds

64.8

67.8

67.8

68.6

59.4

60.1

Lease obligations

7.6

6.3

7.4

8.2

7.7

6.9

Total

72.4

74.1

75.2

76.9

67.2

67.1

D/E ratio

1.05

1.04

1.10

1.11

1.00

0.97

Note : D/E Ratio=Interest bearing liabilities (incl. Lease obligations) / Net assets

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

12

Statements of Cash Flows
Cash flows from operating activities for the period were ¥(2.0) billion due to increases intrade receivables and inventories

Cash flows(JPY bn)

Cash flows from operating activities

FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

2Q Actual

2Q Actual

2Q Actual

2Q Actual

2Q Actual

YoY
Change

(0.4)

0.9

(3.0)

7.4

(2.0)

(9.5)

Profit before income taxes

1.8

0.7

1.6

5.4

3.1

(2.2)

Depreciation

3.3

3.5

4.1

3.1

3.0

(0.1)

Impairment loss

0.0

0.0

0.0

0.0

0.1

0.1

(12.0)(11.5)(10.5)(10.2)(12.2)(2.0)

Decrease (increase) in inventories

0.0

(1.3)

(2.4)

4.4

(2.2)

(6.7)

Increase (decrease) in trade payables

5.6

6.1

3.5

4.0

4.4

0.3

(3.7)

(4.7)

(4.6)

(1.3)

(3.3)

(1.9)

Purchase of property, plant and equipment and intangible
assets

(3.6)

(5.1)

(4.9)

(2.5)

(3.1)

(0.5)

Free Cash Flow

(4.1)

(3.7)

(7.7)

6.1

(5.4)

(11.5)Cash flows from financing activities

6.7

4.3

6.6

(2.9)

3.2

6.2

Net increase (decrease) in cash and cash equivalents

2.6

0.5

(1.0)

3.2

(1.8)

(5.1)

Decrease (increase) in trade receivables

Cash flows from investing activities

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

13

2. Domestic and Overseas Markets

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

14

Domestic Agricultural Machinery Market Trends
Domestic
Agricultural
Machinery
DemandModerate pace of recovery from the pullback effect with withdrawal of government subsidies
for business continuity, etc., which had stimulated demand, and the pullback effect with thedecreased willingness to buy due to falling rice prices, etc. after the consumption tax increase.

■ Agricultural machinery demand (shipments in the industry)(9 principal machinery, moving annual total)(JPY bn)

Oct. 2019
Consumption tax increase

280
260
240
220
200

Mar.

Jun.

Sep.

2017

Dec.

Mar.

Jun.

Sep.

2018

Dec.

Mar.

Jun.

Sep.

2019

Dec.

Mar.

Jun.

Sep.

Dec.

Mar.

2020

Jun.

Sep.

2021

Dec.

Mar.

Jun.

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
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 202215

Domestic Agricultural Machinery Market Trends:
Trends in Agricultural Administration
Realizing Sustainable Agricultural Businesses■ “Strategy for Sustainable Food Systems MeaDRI” of the Ministry of Agriculture, Forestry and Fisheries
Government policy of strategic initiatives taken from a medium- to long-term perspective, to realize thebalance between productivity improvement and sustainability of the food, agriculture, forestry and fisheries
industries via innovation＊Formulated in May 2021; Interim targets for 2030 were announced in June 2022

[Targets for 2050 and 2030]<Targets for 2050>－
・Automatic steering systems (adoption rate at farmers’ end):
50% reduction
・Use of chemical pesticides (risk weighted):
30% reduction
・Use of chemical fertilizers:
Increase to 1M ha・Organic farming:<Targets for 2030>(equivalent to 25% of farmland)

50%
10% reduction
20% reduction
63,000 ha* Source: Extracted from “Strategy for Sustainable Food Systems MeaDRI” of the Ministryof Agriculture, Forestry and Fisheries (May 2021) and KPIs & Targets for 2030
under “Strategy for Sustainable Food Systems MeaDRI“ (June 2022)
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

16

Domestic: Initiatives of ISEKI■Promote environment-friendly smart agriculture
Straighttravelassisted
specs

Reduce fuel consumption through work optimization


Rice transplanters: from 2017: About 60% of the 8-row class rice transplanters havethese specs＊Automaticsteering(including robots)Tractors: from 2021: Enhanced the lineup with the addition of medium-sized ones in
2022
Combine harvesters: from 2023: Rolled out centering on demonstrations in 2022

Adjust the amount of fertilizer with sensors
Sensing(Rough estimation when variable fertilization is applied for side dressing)Partialfertilization

Variable fertilizer rice transplanters: Reduce fertilizer usage by approx. 30%
Riding control machine (smart topdressing system): Offer automatic adjustment
depending on crop growth

Reduce fertilizer usage by fertilizing only necessary areas
 In-ridge partial applicator (tractor farming implement): Reduce fertilizer usage byapprox. 30-50%
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 202217

Domestic: Initiatives of ISEKI
Expanding organic agriculture for rice cultivation ⇒ Current issues are water management operations
and weed management operations

・Establish environment-friendly smart agriculture by combining
ISEKI’s smart agricultural machinery and smart agricultural
technology with Aigamo Robot, an automatic weed suppression robot,
as a core■ Strengthen cooperative relationship with Yukimai Design Co., Ltd., the developer
June 2021: Concluded a business alliance with the aim of the
popularization and development of organic agriculture
June 2022: Invested in Yukimai Design Co., Ltd. to accelerate
development toward social implementation⇒ Our first investment in a startup
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 202218

Domestic: Initiatives of ISEKI■ Promote smart agriculture and environment-friendly agriculture throughcollaboration with local governments and private companies✓Five-way collaboration with Gonuemon Co., Ltd., TDK Corporation,
Yukimai Design Co., Ltd. and Nikaho City from May 2022
Partnership for promotion of environment-friendly smart agriculture✓Yamagata Design Co., Ltd. (Yamagata Pref.)from Feb. 2022
Urban development through establishment ofan environment-friendly agriculture model✓Tsukubamirai City (Ibaraki Pref.)✓Niigata City (Niigata Pref.) from Jan. 2022
Promotion of sustainable agriculture utilizing advanced
technology

from Mar. 2020
Promotion of agriculture utilizing advanced technology✓Yukimai Design Co., Ltd. (Tokyo Pref.)✓Three-way collaboration with
Shimane Pref. and Hamada City
from Feb. 2022
Creating organic rice production areas forsustainable developmentfrom Jun. 2021
Concluded a business alliance with the aim of popularizationand development of organic agriculture by utilizing automatic
weed suppression robots✓Kisarazu City (Chiba Pref.) from Mar. 2021

Promotion of agriculture utilizing advanced technology and organic farming

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

19Market Trends (North America, Europe)
EuropeNorth America
1. Market Trends
Category (PTO HP)(1,000 units, %)•Jan. to Jun. cumulative
2020

2021

2022

Difference

40 HP and lower(Compact tractors)

110

129

109

85%

40-100 HP(Utility tractors)

33

39

35

89%

100 HP and above

9

12

13

109%

(Source: Statistics provided by AEM)

2. Situation of AGCO
(OEM partner)
Unit sales (Jan.-Jun. 2022)
 Compact tractors: YoY 77%•

Consumer demand remains strong due to lifestylechanges
Professional demand recovered to the level seen before
the COVID-19 pandemic as governments in various
countries eased restrictions in place due to COVID-19

2. Local Sales• Unit sales (Jan.-Jun. 2022)
 Local distributors: YoY 108%
Orders remained strong amid continued shortagesof local distribution inventory
3. Shipments and Orders at ISEKI

YoY 120%•Shipments and Orders(Jan.-Sep. 2022):
Significant increase YoY(Including order backlog from the previous fiscal year)(Including order backlog from the previous fiscal year)

3. Shipments and Orders at ISEKI
Shipments and Orders(Jan.-Sep. 2022):

1. Market Trends

・A shortage of containers for marine transportation led to unfulfilled shipments, etc.

・A shortage of containers for marine transportation led to unfulfilled shipments, etc.

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

20

Strengthening Sales Structure in Europe
Made ISEKI-MASCHINEN GMBH DEUTSCHLAND (ISEKI Germany)
into a consolidated subsidiary (in July 2022)

PREMIUM TURF-CARE LTD.
(Non-consolidated,
44.5% of equity)

ISEKI France S.A.S.
(Consolidated subsidiary)Community-based sales
and service network
Strengthen sales structure
Reorganized the sales network in
Europe with 3 companies as pillars

ISEKI Germany(Consolidated
subsidiary)

・ISEKI France
・ISEKI Germany
・PREMIUM TURF-CARE

Aim to streamline supply chain
and strengthen sales structure

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

21

Europe: Product Strategy
Introduce ride-on electric mower to market(Limited sales in 2022 with a plan for mass production by 2024)

All Europe is shifting toward decarbonization toachieve a carbon neutral society
Environmental
performance

・Achieved zero emission
・Low noise and vibration

Ease ofhandling

・Rechargeable athousehold electrical outlets

Basic
performance

・Good at mowing
damp wet grass

Sales areas: France, Germany,
Belgium, Netherlands,
U.K., etc.

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

22Market Trends (Asia)
ThailandIndonesia, Myanmar
1. Market Trends

1. Market Trends
For paddy fields： Sluggish due mainly to stagnant rice
trading prices
For dry fields: Purchasing prices of fruits, rubber, palm andother crops increased YoY, which stimulated
willingness to buy
2. Situation of the Local Distributor, IST Farm Machinery
Unit sales (Jan.-Jun. 2022)
 ASEAN Strategy Tractor: YoY 78%<Indonesia> Budget for government tenders is shrinking as funds arediverted to COVID-19 prevention measures<Myanmar> Sales activities of sales outlets were affected by achaotic domestic situation due to the coup d'état

2. Shipments and Orders at ISEKI(Jan.-Sep. 2022)<Indonesia> Received orders amid shrinking budget for tenders<Myanmar> Sales activities stagnated as the chaos due to thecoup d'état became prolonged
3. PT. ISEKI Indonesia (Manufacturing Subsidiary)2021

3. Shipments and Orders at ISEKI
Shipments and Orders (Jan.-Sep. 2022): YoY 106%

(Units, JPY bn)

Actual2022
2Q ActualPlan

2Q Actual

Production
Volume15,6807,790

17,1707,460

Operating
Income

0.3

0.2

0.3

0.1

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

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Thailand: Product Strategy
Introduced a made-in-India small-sized tractor (27 HP) to the market

 The first product developed under the technical and businessalliance with Tractors and Farm Equipment Ltd. (TAFE) Aim to accommodate demand for field crops such as cassava
and sugar cane
Low price& highdurability

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Market Trends (Asia)
South Korea, Taiwan

China

1. Market Trends

1. Market Trends
Rice cultivation market struggled due to stagnant rice
trading prices.
Demand for rice transplanters decreased due partly to the
spread of COVID-19.
◆Trends in the Agricultural Machinery Industry by Product Type(YoY Change in Units, %)Jan.-Jun., 2020

Jan.-Jun., 2021

Jan.-Jun., 2022

Rice Transplanters (riding)

125.9%

140.6%

90.2%

Combine Harvesters (allpurpose, auto-threshing)

91.9%

125.2%

108.0%

Tractors(medium- to large-sized)

128.7%

122.8%

107.5%

Source: China Association of Agricultural Machinery Manufacturers

2. Situation of Dongfeng Iseki．(Unit sales, Jan.-Jun., 2022)
 Rice transplanters (riding): YoY 100%
 Tractors, combine harvesters: YoY 114%

<South Korea> In line with moves toward large-scale farming,
demand for large-sized, high-performance
agricultural machinery heightened amidst a
declining and aging farming population<Taiwan>Demand for tractors and combine harvesters
decreased significantly due to a pullback effectwith withdrawal of subsidies

2. Shipments and Orders at ISEKI(Jan.-Sep., 2022)<South Korea> Increased shipments due to higher sales of ricetransplanters and concentration of shipments oftractors and combine harvesters due to Stage 5
emission standards (in the first half of the year)<Taiwan>
Shipments were YoY 117%
Promoted merchandise such as rice transplantersand vegetable transplanters

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

25

3. Performance Forecast for the Fiscal Year Ending
December 31, 2022

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Forecast of Consolidated Financial Results for the Fiscal YearEnding December 31, 2022
Consolidated
Financial Results
Forecasts

・No change to overall initial forecast
・Revised the breakdown of net sales considering the 2Q results and orders received at this time

[Full-year consolidated financial results forecasts](単位：億円)Previous
forecast

Note(JPY bn, %)Revisedforecast

Difference

Net Sales

166.5

166.5

―

Operating Income

4.7

4.7

―

Operating Margin

2.8%

2.8%

―

Ordinary Income

4.6

4.6

―

Profit Attributable to Ownersof Parent

3.1

3.1

―

[Breakdown of net sales](JPY bn)
Previous
forecast

Note

Revisedforecast

Difference

Net Sales

166.5

166.5

―

[Domestic]

119.0

112.8

(6.2)

[Overseas]

47.5

53.7

6.2

Note: Average exchange rates for the full year in the revised forecast:¥128.7 against US dollar, ¥135.8 against Euro

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

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Forecast of Consolidated Financial Results for the Fiscal YearEnding December 31, 2022
[Full-year consolidated financial results forecasts](JPY bn, %)FY2018/12

FY2019/12

FY2020/12

FY2021/12

FY2022/12

ActualActualActualActualRevised forecast

YoY change

Net Sales

155.9

149.8

149.3

158.1

166.5

8.3

Operating Income

3.1

2.7

2.0

4.1

4.7

0.5

Operating Margin

2.0%

1.8%

1.4%

2.6%

2.8%

0.2%

Ordinary Income

2.6

1.1

1.7

4.6

4.6

(0.0)

Profit Attributable to Owners of
Parent

1.0

0.7

(5.6)

3.1

3.1

(0.0)

30

30

0

30

30

0

Domestic

122.8

117.7

115.9

117.3

112.8

(4.5)

Overseas

33.1

32.1

33.3

40.7

53.7

12.9

US$

110.2

109.3

107.0

109.0

128.7

19.7

Euro

130.9

121.6

121.5

129.8

135.8

6.0

Year-end Dividend (JPY)

Breakdown of Net
Sales
Average
Exchange
Rate (JPY)

Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

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4. Topics

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29

Topics: Intellectual Property
1. Number of patents registered in Japan by sector
Year

2000-2006

2007-2014

Statistics

Number of patents published by
sector

SectorAgriculture andFishery

Rank

Ranked No. 2 in the Other Special Machinery Sector

2016-2017

2018

2019

2020

2021

Number of patents registered by sector
Other Special Machinery

First

Second

2. Patent grant ratio

First

SecondSecondRanked No. 1 in All IndustriesYear

2004-2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Patent grant rate

-

91.8%

94.7%

97.0%

99.2%

97.5%

100.0%

98.1%

96.4%

97.7%

98.7%

97.2%

Rank

First

SecondFirst

SecondFirst* Patent grant rate = Number of patents granted / (Number of patents granted + Number of patents applications refused + Number of patents applications withdrawn or abandoned)
Number of patents applications withdrawn or abandoned = Number of patents applications withdrawn or abandoned after notice of reasons for refusal
Source: Japan Patent Office Annual Report 2022 (the Japan Patent Office)Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

30

Topics: Strengthening ESG Initiatives[Environmental Vision and Mid- to Long-term Targets]
Reduce CO2 emissions (Scopes 1 & 2)
26% reduction by 2030
(per net sales)
at 3 domestic production sites(vs. 2013 level)

ReviseBackcastingMid- to Long-term targets
46% reduction by 2030
(total amount)at overseas production sites(vs. 2014 level)
Step up our efforts

Domestic sales ratio of eco products*2
Domestic sales ratio of 50%
by 2030● Reduce CO2 emissions across ISEKI Group (Formulate a Group-widetarget in 2022)● Formulate a reduction target in coordination with suppliers (Scope 3),
which accounts for 70% of the Group’s transaction amount

Environmental
VisionAim to achieve asustainable society
based on carbon
neutrality by 2050

Domestic sales ratio of 65%
by 2025
Revise[Assent to TCFD Recommendations] (on May 30, 2022)
ISEKI assents to the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD), and works on
information disclosure based on the TCFD recommendations
Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022

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Topics: Strengthening ESG Initiatives■ Established “ESG Committee” (on August 10, 2022)
Centralize organizational management through covering the aspects of environment, human capital,
governance and compliance as we address various ESG-related issues in general
Integrate the functions of existing “Management Supervisory Committee” and “Sustainability
Committee”
In response to a consultation from the Board of Directors, deliberate on matters related to the・Role:
enhancement of ESG and make recommendations to the Board of Directors
・Structure: Chairperson: Independent Outside Director
Members: Directors and Corporate Officers

・Purpose:■Issuance of ISEKI Report 2022
Contents

 ISEKI Group’s value creation aims
 Business strategies for value creation
 Foundation for sustainable growth, etc.

URL of the ISEKI Report: https://www.iseki.co.jp/english/csr/report/
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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.

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”.

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