Financial Results for
the Fiscal Year Ended December 31, 2020
February 16, 2021

President Shirou Tomiyasu

Index
1. Outline of Financial Results for the Fiscal Year
Ended December 31, 2020
2. Performance Forecast for the Fiscal Year Ending
December 31, 2021
3. Domestic and Overseas Markets
4. Topics

Financial Results Briefing for the Fiscal Year Ended December 31, 20202

1. Outline of Financial Results
for the Fiscal Year Ended
December 31, 2020

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

Key Points on Financial Results for the Fiscal Year
Ended December 31, 2020
✓ Sales in the first half was particularly difficult, owing to the impact of the Novel Coronavirus (COVID19) in Japan and overseas and factors including the pullback against the last-minute demand aheadof the consumption tax increase. Sales recovered gradually in the second half. For the full year,
sales were broadly in line with the previous year.
✓ In response to the first half decline in sales, the Company scaled back inventory and adjusted
production.
→An operating loss was recorded on a non-consolidated basis due to lower shipments and adecrease in production at the Company’s manufacturing plants.
✓ Although consolidated net sales, operating income and ordinary income exceeded the forecast
announced in August, the bottom line was a loss for the year due to the recording of an impairment
loss → Regrettably, no dividend is planned.
✓ As a result, the Company reduced non-current assets and inventory to improve the balance sheet.

Financial Results Briefing for the Fiscal Year Ended December 31, 20204

Impact of COVID-19 and Other Factors on Consolidated Business
Performance<Domestic>
Sales declined due to the pullback against the last-minute demand ahead of the consumption tax rate increase
and self-restraints on sales activities owing to the impact of COVID-19, including the cancelation of exhibitions.

<Overseas>
North America : Sales declined as a result of reduced shipments of tractors to OEM partners owing to a delay inreceiving engines purchased for installation in the first half. This was despite the growing
demand for compact tractors by consumers staying at home due to COVID-19.
Europe: Sales were affected by the spring lockdown but recovered from the second half onwards. In
addition, sales rose as a result of unifying the accounting periods of consolidated subsidiaries(15-month accounting period) and the effect of forex fluctuations.

China: Sales of rice transplanters were robust.

ASEAN: In Thailand, the impact of adverse weather conditions, such as drought, has graduallydiminished, but sales fell due to lower farmers’ income owing to the impact of COVID-19.
In Indonesia, sales declined due to the decrease in the number of bids.

Asia: Sales in South Korea and Taiwan were strong.

<Impact of COVID-19 (Analysis by the Company)>
Impact on net sales: Japan: ¥(3.3) billion, Overseas: ¥(0.9) billion, Total: ¥(4.2) billion
Financial Results Briefing for the Fiscal Year Ended December 31, 20205

Outline of Consolidated Business Performance
FY2020/12 (January 1, 2020 to December 31, 2020)(JPY bn, %)FY2019/12
ActualFY2020/12%

Actual%YoY Change

Diff.
(Target/Actual)*

Net Sales

149.8

100.0

149.3

100.0

(0.5)

4.8

(Domestic)

117.7

78.5

115.9

77.6

(1.8)

1.4

(Overseas)

32.1

21.5

33.3

22.4

1.2

3.3

Operating Income

2.7

1.8

2.0

1.4

(0.6)

0.9

Ordinary Income

1.1

0.7

1.7

1.1

0.5

1.5

Profit (Loss) Attributableto Owners of Parent

0.7

0.5

(5.6)

-

(6.3)

(5.8)

Average
Exchange
Rate (JPY)

US$

109.3

107.0

(2.3)

0.5

Euro

121.6

121.5

(0.1)

2.7

*Comparison with the forecast announced on August 6, 2020
Financial Results Briefing for the Fiscal Year Ended December 31, 2020

6

Domestic Sales
YoY- ¥1.8 billion

Agricultural
Machinery

Agricultural Machinery Related(JPY bn)

Sales of agricultural machinery decreased due to the pullback against the last-minute demand ahead of the consumption
tax rate increase and the impact of COVID-19. Sales declined overall, even though sales of spare parts and revenue from
repair fees were strong and the construction of a large-scale facility was completed.
FY2019/12

FY2020/12

ActualActualYoY Change
Notes

Cultivating & Mowing
Machinery

25.3

22.8

(2.4)

Planting Machinery

9.0

8.8

(0.1)

Diff.
(Target/Actual)*(0.8)

Tractors: (2.3)

0.4

Harvesting &Processing Machinery

Combine harvesters:
(1.3)

18.5

16.8

(1.7)

Subtotal

53.0

48.6

(4.3)

(0.2)

Farming Implements

20.0

20.4

0.3

1.4

Spare Parts

15.0

15.6

0.6

0.3

Repair Fees

5.7

5.8

0.1

±

±

0.0

✔ Sales of agricultural machinery decreased ¥4.3 billion due to thepullback against the last-minute demand ahead of the consumption
tax rate increase, cancelations of exhibitions and self-restraints onsales activities owing to the impact of COVID-19.
✔ Sales of farming implements increased, benefiting from government
subsidies for agricultural business continuity.
✔ Sales of spare parts and revenue from repair fees continued to bestrong.
✔ In construction of facilities, large-scale property was successfullycompleted.
Sales of spare parts and revenue from repair fees
(Cumulative from Jan. to Dec., JPY bn)

21.4

0.0

40.8

42.0

1.1

1.8

93.8

90.6

(3.1)

1.5

Construction of Facilities

4.5

6.1

1.5

(0.1)

Others

19.3

Total

117.7

Subtotal

Main factors of YoY changes

20.4

20.7

20.0
19.5

Total

19.1
(0.2)
0.0
±
*Comparison with the forecast announced on August 6, 2020
115.9
(1.8)
1.4

FY2016/12

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

FY2017/12

FY2018/12

FY2019/12

FY2020/12

7Overseas Sales
YoY¥1.2 billion

Increased sales to South Korea, Taiwan and China pushed up overall sales,
although sales to North America and ASEAN decreased.
YoY Change

Diff.
(Target/Actual)*

FY2019/12

FY2020/12

ActualActualNorth America

12.6

12.2

(0.4)

Tractors: (0.4)

0.5Europe

10.2

10.3

0.1

Tractors: 0.4
Lawn mowers: (0.3)

1.0

China

0.1

0.8

0.6

Rice transplanters:
0.6

0.2

ASEAN

1.6

0.7

(0.8)

Tractors: (0.6)

Others

3.4

4.4

0.9

Tractors: 0.2
Combine harvesters:
0.8

Product Sales Total

28.2

28.6

0.4

1.7

Parts & Others

3.9

4.7

0.7

1.6

Total Sales

32.1

33.3

1.2

3.3

(JPY bn)

Notes

Main factors of YoY changes✔ North America: Lower sales due to the impact of decreased

shipments, owing to a delay in receiving engines
in the first half, despite the growing demand for
tractors by consumers staying at home.

✔ Europe:

Sales were affected by the spring lockdown but
recovered from the second half onwards, androse as a result of unifying the accounting periodsof consolidated subsidiaries (15-month accounting
period) and the effect of forex fluctuations.

± 0.0✔ China:

Increased sales due to increased shipments ofsemi-finished rice transplanters.

± 0.0✔ ASEAN:

Lower sales owing to unseasonable weather anda decrease in farmers' income and restrictions onsales activities due to the impact of COVID-19 inThailand, as well as a decrease in shipments oftractors to Indonesia,✔ Others:

Higher sales due to increased shipments to South
Korea and Taiwan.

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

8*Comparison with the forecast announced on August 6, 2020

Operating Income
YoY-¥0.6 billion

YoY decrease in operating income due to decrease in gross profit stemming from a revenue
decline and the recording of loss on valuation of parts inventory, along with temporary expenses
incurred by application of the principle for calculating retirement benefits upon the merger of a
subsidiary, despite the reduction of selling, general and administrative expenses.

ActualYoY
ChangeDiff.
(Target/Actual)*

149.8

149.3

(0.5)

4.8

Gross Profit

44.5

43.4

(1.0)

1.1

Gross Profit
Margin

29.7%

29.1%

(0.6)%(0.2)%

SG&A Expenses

41.7

FY2019/12

FY2020/12

ActualNet Sales(JPY bn, %)

41.3

(0.3)

0.1

Personnel
Expenses

24.6

25.1

0.4

0.3

Other
Expenses

17.0

16.2

(0.7)

(0.1)

Operating Income

2.7

2.0

(0.6)

0.9

*Comparison with the forecast announced on August 6, 2020[Breakdown of YoY Change]

(1.0)

(0.2)

0.5

*2
Includes temporary
factors for SG&A
expenses

2.7
FY2019/12

Decreased grossprofitdue to decreased
revenue and margin

One-off factors(Impact
on gross*1
profit)2.0

Decreased
SG&A expenses

FY2020/12*1*2Gross Profit SG&A Expenses<Temporary factors (on profits)>
Recording of loss on valuation of parts inventory due
to delay in receiving engines purchased for installation
Temporary impact of the application of the principle forcalculating retirement benefits upon the merger of sales subsidiary.

Operating Income

(0.2)

—

(0.2)

—

(0.3)

(0.3)

[Effect of forex fluctuations (JPY bn)]
Net Sales

Cost of
Sales

SG&A
Expenses

Operating
Income

0.55

0.29

0.16

0.9

Financial Results Briefing for the Fiscal Year Ended December 31, 20209Ordinary Income and Profit
Ordinary
Income YoY¥0.5 billion

Ordinary Income: Increased profit due to reduced foreign exchange losses and a reduction in the share of loss ofentities accounted for using equity method
Income before Income Taxes: Decrease in profit due to recording of impairment loss, although a gain on change inequity was reported
FY2019/12 FY2020/12

Diff.
(Target/Actual)*ActualActualYoY
ChangeOperating Income

2.7

2.0

(0.6)

0.9

Balance of Financial Income

(0.7)

(0.6)

0.0

0.0

Other Non-operating Income

(0.8)

0.3

1.1

0.5

Ordinary Income

1.1

1.7

0.5

1.5

Extraordinary Income

0.5

0.6

0.1

0.0

Extraordinary Losses

(0.3)

(9.4)

(9.1)

(9.0)

Income before Income Taxes

1.3

(7.1)

(8.4)

(7.5)

Income Taxes - Deferred

(0.5)

1.4

2.0

1.6

Profit (Loss) Attributable to
Owners of Parent

0.7

(5.6)

(6.3)

(5.8)

(JPY bn, %)Non-operating Income (YoY change)
Decrease in share of loss of entities
accounted for using equity method¥1.0 billion(Reference) Related to equity method(JPY bn, %)FY2019/12
ActualFY2020/12
ActualYoY
ChangeShare of profit (loss) of entities
accounted for using equity
method (non-operating)

(1.4)

(0.4)

1.0

Gain (loss) on change in equity(extraordinary)

—

0.6

0.6

*Comparison with the forecast announced on August 6, 2020

Financial Results Briefing for the Fiscal Year Ended December 31, 202010

Impairment Loss on Non-current Assets■Recording of Impairment Losses(1) Non-consolidated: Decline in the market value of land in respect of real estate leased to consolidated
subsidiaries (Iseki-Matsuyama Mfg. Co., Ltd. and Iseki-Kumamoto Mfg. Co., Ltd.)(2) Consolidated subsidiaries: Decline in profitability of business assets owned by Iseki Matsuyama and Iseki
Kumamoto caused by changes in the business environment(3) Consolidated financial results: Revision of impairment losses based on consolidated business earnings[Recording Extraordinary Losses]
ISEKI & CO., LTD., Iseki Matsuyama, Iseki Kumamoto
Consolidation
adjustment

Consolidated
financialresults
Subtotal

OthersConsolidated
financialresults
Total

(3.5)

5.3

(9.0)

(0.3)

(9.3)

(4.9)

—

4.9

—

—

—

(15.6)

(3.5)

10.2

(9.0)

(0.3)

(9.3)

Nonconsolidated

Non-consolidated
results ofconsolidated
subsidiaries

Impairment loss on non-current assets(10.7)

Loss on valuation of shares of subsidiaries
and associates and provision of allowancefor doubtful accounts
Total(JPY bn)■Result
Recording of impairment losses enabled the Company to reduce non-current assets, which together with the reduction ininventory has led to an improvement in the balance sheet. In addition, this will also reduce depreciation and other expenses from2021 onwards.
Financial Results Briefing for the Fiscal Year Ended December 31, 202011

Non-Consolidated Financial Results
Operating
IncomeYoY-¥2.3 billion

Despite reduced SG&A expenses, profits decreased because inventory adjustment led toa decrease in shipments, which pushed down gross profit.
The bottom line was a loss due to the recording of an impairment loss.
FY2019/12

FY2020/12

ActualActualYoY
Change90.0

79.2(10.7)(Domestic)

61.7

53.9

(7.7)

(Overseas)

28.2

25.2

(3.0)

12.4

9.4

(3.0)

13.8%

11.9%

(2.0)%(JPY bn, %)Net Sales

Gross Profit
Gross Profit Margin[Breakdown of YoY Change]

(2.8)

11.4

10.7

(0.7)

Operating Income

1.0

(1.3)

(2.3)

Ordinary Income

2.2

(0.2)

(2.4)

Profit (Loss)

1.5(13.2)(14.8)

0.7

1.0
(1.3)

FY2019/12

SG&A Expenses(0.2)

Decreased grossprofit due todecreased
revenue andmargini* Temporary
negativefactors

Reduced
SG&A expenses

FY2012/12* Recording of loss on valuation of parts inventory due todelay in receiving engines purchased for installation(0.2)

Financial Results Briefing for the Fiscal Year Ended December 31, 202012

Balance Sheet (Consolidated)
YoY
Change:-¥2.3 billion in inventories, despite measures to reduce them, and due to factors such as newly
consolidated subsidiaries.
-¥12.9 billion in non-current assets due to recording impairment losses
As of Dec. 2020

YoY
ChangeAs of Dec.
2019

As of Dec.
2020

YoY
Change

8.4

10.7

2.3

Accounts Payable - Trade

37.7

36.8

(0.9)

Accounts Receivable - Trade

19.7

21.7

2.1

Interest-bearing Liabilities

69.3

69.3

0.0

Inventories

54.2

51.8

(2.3)

(Loans Payable)

60.9

61.6

0.7

(Merchandise & Finished Goods)

46.4

43.8

(2.5)

(Lease Obligations)

8.4

7.7

(0.7)

Other Current Assets

4.9

5.5

0.6

Other Liabilities

21.2

18.9

(2.3)

Total Current Assets

87.2

89.9

2.8

(Deferred Tax Liabilities for Land Revaluation)

5.7

4.0

(1.6)

Property, Plant and Equipment

98.3

86.2

(12.0)

128.2

125.0

(3.2)

(Land)

50.7

44.6

(6.0)

(Machinery, equipment and vehicles)

9.2

7.5

(1.7)

Net Assets

69.2

62.4

(6.8)

(Leased Assets)

8.0

5.3

(2.6)

Intangible Assets

1.2

1.9

0.6

(Retained Earnings)

17.0

14.4

(2.5)

Investments and Other Assets

10.7

9.1

(1.5)

(Revaluation Reserve for Land)

12.6

8.8

(3.7)

Total Non-current Assets

110.3

97.4

(12.9)

Total Assets

197.5

187.4

(10.0)

Total Liabilities and Net Assets

197.5

187.4

(10.0)(JPY bn)

Cash & Deposits

As of Dec. 2019

Total Liabilities

Financial Results Briefing for the Fiscal Year Ended December 31, 202013

Status of Inventories
Inventories

Although the Company strived to reduce inventory, the YoY decrease did not go beyond -¥2.5 billion
due to the consolidation of new subsidiaries, delays in shipments and non-deliveries due to ashortage of containers.

1. Inventories (Merchandise & Finished Goods)(5.6)(JPY bn)

0.9

0.3

1.9

46.4

43.8
(2.5)

FY2019/12

Inventory decrease

Increase due to
new consolidation(Conversion of IST
to subsidiary)

Shipment delays
due to container
shortages

Other(Consolidation
adjustment)

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

FY2020/12

14Interest-bearing Liabilities, Equity and Dividends
Interest-bearing
Liabilities,
Equity, andDividends

Progress being made with reducing interest-bearing liabilities, but mostly unchanged yearon-year due to increase by new consolidation
Net assets decreased due to recording a loss. Regrettably, no year-end dividend is payable.

1. Interest-bearing Liabilities, Equity

2. Dividends(JPY)(JPY bn)

Balance of Interest-bearing Liabilities
75.0

69.7

66.3

70.0

6.3

65.0

69.3

69.3
8.4

7.7

63.4

60.8

61.5

2018/122019/122020/12

6.7

Lease
obligations

60.0
55.0

59.6

Year-end
dividend

FY2019/12
ActualFY2020/12
Planned

30

0

Loans
Payable50.0
2017/12
Ｄ／Ｅレシ

0.76

0.76

自己資本比

34.3%

34.0%

Equity ratio (%)
有利子負債

34.4%
522

純資産
Interest-bearing
liabilities (JPY bn)

66.3

Net assets (JPY bn)

D/E ratio (times)

0.94

0.97

1.04

34.0%

33.0%

32.2%

34.2%
69.5

629

668 33.4%668
687
711

681

66.3 32.4%69.7
671
709

70.9

68.9

69.2

62.4

0.94

1.01

69.7

1.00

69.3

1.11

69.3

Financial Results Briefing for the Fiscal Year Ended December 31, 202015

Capital Investment, Depreciation andResearch & Development Expenses
Made investment in growth, including development of sales offices and investment in improving
productivity

CapitalInvestment

1. Capital Investment (Actual)

2. Depreciation, Research & Development Expenses(JPY bn)* Property, plant and equipment and intangible assets after delivery

FY2020/12 Actual(JPY bn)(Breakdown)

Sales offices

1.7

New models, increaseing productivity

2.2

Information technology

0.6

Other

1.2

Total

5.7

(JPY bn)

FY2019/12
ActualFY2020/12
ActualDepreciation

6.85

6.98

Research anddevelopment
expenses

1.76

1.50

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

16

Statement of Cash Flows
Cash
Flows

Cash flows from operating activities continue to be positive

FY2019/12

FY2020/12

ActualActualYoY
ChangeCash flows from operating activities

10.5

9.6

(0.9)

Cash flows from investing activities

(7.1)

(5.1)

2.0

Free cash flow

3.4

4.5

1.1

Cash flow from financing activities

(2.4)

(2.1)

(0.2)

Effect of exchange rate change on
cash and cash equivalents

0.0

0.0

0.0

Net increase (decrease) in cash andcash equivalents

0.9

2.3

1.4

(JPY bn)

Financial Results Briefing for the Fiscal Year Ended December 31, 202017

2. Performance Forecast for the
Fiscal Year Ending
December 31, 2021

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

Assumptions for Consolidated Performance Forecast

Assumptions for the business environment
 The Company assumes that although COVID-19 will continue to have an impact
in Japan and overseas, it will gradually settle down due to measures such as
the rollout of the vaccine, and socio-economic activities will also start to recovermoderately during the fiscal year ending December 31, 2021 (FY2021/12).

Financial Results Briefing for the Fiscal Year Ended December 31, 202019

Forecast of Consolidated Financial Results for the Fiscal
Year Ending December 31, 2021
(JPY bn)

FY2017/12

FY2018/12

FY2019/12

FY2020/12

FY2021/12

YoYchangeActual%Actual%Actual%Actual%Forecast%

Net Sales

158.4

100.0

156.0

100.0

149.8

100.0

149.3

100.0

153.5

100.0

4.1

(Domestic)

123.1

77.7

122.8

78.7

117.7

78.5

115.9

77.6

117.9

76.8

1.9

(Overseas)

35.3

22.3

33.2

21.3

32.1

21.5

33.3

22.4

35.6

23.2

2.2

Operating Income

4.0

2.5

3.2

2.0

2.7

1.8

2.0

1.4

3.6

2.3

1.5

Ordinary Income

4.2

2.7

2.6

1.7

1.1

0.7

1.7

1.1

3.5

2.3

1.7

Profit attributable toowners of the parent

2.8

1.8

1.1

0.7

0.7

0.5

(5.6)

-

2.4

1.6

8.0

Average
Exchange
Rate (JPY)
Foreign
Exchange
Sensitivity(Operating
Income Basis)

US$

112.1

110.2

109.3

107.0

105.0

(2.0)

Euro

126.8

130.9

121.6

121.5

123.0

1.5

US$

(5)

(JPY mn)Euro

12Financial Results Briefing for the Fiscal Year Ended December 31, 2020

20

Domestic Sales Forecast
Sales are expected to increase due to improving service and support capabilities, as well as strong
sales of spare parts and revenue from repair fees, in addition to sales of large machinery and smart
agricultural machinery in response to structural changes in agriculture.

Domestic
Sales

FY2019/12

FY2020/12

FY2021/12

YoY

ActualActualForecast

ChangeCultivating & Mowing
Machinery

25.3

22.8

23.8

0.9

Planting Machinery

9.0

8.8

9.3

0.4

Harvesting & Processing
Machinery

18.5

16.8

17.8

0.9

Subtotal

53.0

48.6

50.9

2.2

Farming Implements

20.0

20.4

20.1

(0.3)

Spare Parts
Repair Fees
Subtotal

15.0
5.7
40.8

15.6
5.8
42.0

15.7
6.1
41.9

Total

93.8

90.6

92.8

2.1

Construction of Facilities

4.5

6.1

5.5

(0.6)

Others

19.3

19.1

19.6

0.4

Total

117.7

115.9

117.9

1.9

Agricultural
Machinery

Agricultural Machinery Related(JPY bn)

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

±

0.0
0.2
(0.1)

21

Overseas Sales Forecast
Overseas
Sales

Sales are expected to increase as a result of continued demand from consumers staying at
home in North America and the impact of the conversion of an ASEAN distributor into a
consolidated subsidiary in December 2020.
FY2019/12

FY2020/12

FY2021/12

YoY

ActualActualForecast

ChangeNorth America

13.2

12.8

13.8

0.9

Europe

12.8

13.9

14.0

± 0.0

Asia

5.5

6.2

7.4

1.1

Others

0.5

0.3

0.4

± 0.0

Total Sales

32.1

33.3

35.6

2.2

(JPY bn)* China, ASEAN, East Asia
* Oceania and others

Notes: From FY2021/12, overseas sales will be aggregated in the following unit:
1. Change to regional classifications:
Asia: China, ASEAN, East Asia
Others: Oceania and others
2. Parts and Others will be aggregated by region
Financial Results Briefing for the Fiscal Year Ended December 31, 202022

Consolidated Operating Income and Dividend Forecast
Performance
Forecast

Despite an increase in SG&A expenses, operating income is expected to increase as aresult of structural reforms and improved management efficiency company-wide, in
addition to the increase in gross profit due to increased sales.

1. Operating Income
FY2019/12

FY 2020/12

FY 2021/12

YoY

ActualActualForecast

ChangeNet Sales

149.8

149.3

153.5

4.1

Gross profit

44.5

43.4

46.4

2.9

Gross Profit
Margin

29.7%

29.1%

30.2%

1.1%

SG&A Expenses

41.7

41.3

42.8

1.4

Personnel
Expenses

24.6

25.1

24.9

(0.2)

Other
Expenses

17.0

16.2

17.9

1.6

2.7

2.0

3.6

1.5

(JPY bn)

Operating Income

2. Dividend Forecast[Breakdown of YoY Change]

1.7

FY2019/12
ActualFY2020/12
Plan

FY2021/12
Forecast

Year-end dividend

30

0Undetermined

0.3
*

2.0

FY2020/12

(JPY)

(0.5)

3.6
Increased grossprofit fromincreased
revenue

Increased
distribution costs
from increased
sales

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

Impairment impact

FY2021/12

23

Domestic and Overseas
Markets

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

Domestic Agricultural Machinery Market Trends
Sales remain sluggish due to the pullback in demand after the consumption tax rateincrease and the impact of COVID-19.
Since October, the pullback in demand after the tax increase is showing signs that it hasbottomed out.

Domestic
Agricultural
Machinery
Demand■ Agricultural machinery demand (Shipments in the industry)(9 principal machinery, moving annual total)(JPY bn)

Oct. 2019
Consumption tax
rate increase

280.0
260.0
240.0
220.0
200.0
Mar.

Jun.

Sep.

2017

Dec.

Mar.

Jun.

Sep.

2018

Dec.

Mar.

Jun.

Sep.

Dec.

2019

Mar.

Jun.

Sep.

Dec.

2020

* 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 Fiscal Year Ended December 31, 202025

Domestic Agricultural Machinery Shipments and
ISEKI’s Sales Performance
ISEKI’s Sales
Performance

Against the backdrop of COVID-19, sales outperformed those of a sluggish
industry

YoY growth rate for 9 principal machinery categories (Moving annual total)*ISEKI estimates(%)

Jan.-Dec.
2018

Jan.-Dec.
2019

Jan.-Dec.
2020

Industry(Amount ofshipment)

100%

106%

81%

ISEKI

(Salesamount)

99%

95%

92%

* 9 principal machinery: Tractors, combine harvesters, rice transplanters, tillers, drying machines, rice huskers,
binders, harvesters, treatment
Financial Results Briefing for the Fiscal Year Ended December 31, 202026

Domestic Trends in Agricultural Administration■ Primary budget allowances for agricultural machinery and facilities(Ministry of Agriculture, Forestry and Fisheries)(JPY bn)

2019
supp.

2020
initial

Budget

2020
supp.

2021
initial

Budget

Total

92.9

72.6

165.5

417.2

75.2

492.4

2020 supplementarybudget is over ¥400
billion● Relevant excerpts✓Government subsidies for agriculturalbusiness continuity

-

-

-

121.2

-

121.2

✓Boost wheat and soybean profitability
and productivity

-

-

-

6.0

0.1

6.1

✓Comprehensive measures for smart
agriculture promotion

7.2

0.8

8.0

7.2

1.4

8.6

*Data extracted, classified and estimated by ISEKI. These are not the actual names of the programs concerned.
■Government subsidies for agricultural business continuity

Introduction of machinery and equipment for recovery and development ofsales channels and continuation and transformation of business, while
taking steps to protect against resurgence of COVID-19.

Second supplementary budget for 2020: ¥64.1 billion+(e.g. Automation of human planting work through vegetable transplanters)

More than 120,000 projects adopted following applications forfirst and second grant openings

Third supplementary budget for 2020: ¥57.1 billion

Financial Results Briefing for the Fiscal Year Ended December 31, 202027

Expansion of Smart Agricultural Machinery in Japan<Automation*>

From 2021

2020

Straight-travelassisted ricetransplanter

Straight-travel and turningassisted rice transplanter

Straight-travel assisted
tractorLevel 1
Level 2

Full launchof human-monitored robot tractor

Trial saleLineup expansion

Completely unmanned tractors, combine harvesters andrice transplanters under development

Level 3
Variable fertilizing ricetransplanter

Variable fertilizing
riding control machine

Lineup expansion

Sensing*Automation level
Level 1
Accelerate implementation andLevel 2
practice of smart agriculture in society Level 3

Manned riding models: steering assistance, turning assistance
Human-monitored models: unmanned driving except for round-about plowing
Remote monitored models: the target is completely unmanned operation,
including during movement between fields

Financial Results Briefing for the Fiscal Year Ended December 31, 202028

Sales Initiatives in Response to COVID-19■ Strengthen and streamline sales activities
1. Sales support system i-Magazine
Cloud-based mobile sales tools that enable rapid support and better response to customers as well as
improved business efficiency.

2. Agricultural social media platform i-Club
Digital forum for creating and sharing new innovations through exchange and demonstration of expertise of
specialty companies to provide solutions to issues encountered in large-scale agriculture.

i-Magazine

3. Remote support Anywhere i-times
A team of dedicated staff at the Dream Agricultural Research Institute (Yume-Soken) named “Itsudemo Dokodemo (anytime,
anywhere) ISEKI” provide online support on issues related to agricultural/cultivation technology, GAP and smart agriculture.

4. Virtual demonstrations
Practical videos of ISEKI products in action, including the flagship model, All Japan, from all over the country.

Improving efficiency through smart sales activities
leveraging the ISEKI Group’s technology and know-how
Financial Results Briefing for the Fiscal Year Ended December 31, 202029

Trends by Overseas Market
FY2020/12 (YoY change)

FY2021/12 (Forecast)

North
America・As demand for compact tractors increased owing to consumer
lifestyle changes due to COVID-19, AGCO sales remained strong.
The Company’s sales growth halted by delays in the delivery ofengines purchased in the first half.

・Sales expected to remain firm reflecting
recovery from previous year’s supply issues.

Europe・Lockdown in early spring affected the first half, but sales recoveredin the second half. Consumer products were strong reflecting
demand from consumers staying at home.

・Despite uncertainty over the impact of COVID-19,
demand for landscaping is expected to recovercompared to the previous year.

ASEAN

・In Thailand and neighboring countries, sales
decreased owing to a decline purchasing sentiment
due to drought and COVID-19.

・Although it is unclear when purchasing sentimentwill turn positive, the Company will strengthen
customer support with a focus on IST.

China

・Significant increase in local sales due to policies
aimed at helping people to secure food and subsidies
in response to COVID-19 and replacement demand
for machinery.

・Sales are expected to be broadly in line with theprevious year against a strong market backdrop.

・Sales in South Korea boosted by capturing demand
for large-size, high-performance machinery.
・Sales increased in Taiwan underpinned by benefits
from subsidy program.

・Continued strong demand expected in South
Korea.
・Although there will be a pullback effect in Taiwan
following the withdrawal of subsidies, soundpotential for rice transplanters and othertransplanters.

Asia

East Asia(excluding China)

Financial Results Briefing for the Fiscal Year Ended December 31, 202030

Market Trend (North America, Europe)
EuropeNorth America
1. Market Trends
Category(PTO HP)(1000 units, %)Jan. to Dec. cumulative

1. Market Trends

2019

2020

Differences

40 HP and lower(Compact tractors)

178.8

215.8

121%

・ Since March, sales activities were constrained by restrictions on
going out and travel, but these resumed gradually after June.
Professional demand declined, but consumer demand has
increased as consumers stayed at home.

40-100HP(Utility tractors)

66.0

74.6

113%

2. Local Sales

100HP and above

21.8

22.1

101%

(Source: statistics provided by AEM)

Unit sales (Jan.-Dec. 2020)
 Local distributors:
YoY 91%

2. Situation of AGCO (OEM partner)
Unit sales (Jan.-Dec. 2020)
 Compact tractors:
YoY 124%

3. Sales and Orders at ISEKI

3. Orders at ISEKI
Orders (Jan.-Mar. 2021):

Sales and orders (Jan.-Mar. 2021):
YoY 203%

YoY 248%

・ Risk of sales delays due to a shortage of containers for marinetransportation.

・ Risk of sales delays due to a shortage of containers for marinetransportation.

Financial Results Briefing for the Fiscal Year Ended December 31, 202031Market Trend (Asia)
Indonesia, Myanmar

Thailand

1. Market Trends

1. Market Trends
・ Purchasing sentiment declined due to a decrease in farmers’ income
owing to the impact of natural disasters such as droughts and floods
and COVID-19. The agricultural machinery market was weak.

2. Situation of the Local Distributor, “IST Farm Machinery”
Number of units sold (Jan.-Dec. 2020)
 ASEAN strategy tractor: YoY 75%
・ Following consolidation as the Company’s subsidiary (Dec.
2020), rebuilding profit structure (increasing sales, reducing
costs) to improve corporate structure.

3. Sales and Orders at ISEKI
Sales and orders (Jan.-Mar. 2021):
YoY 105%<Indonesia> ・ Government tendering postponed in the second half
<Myanmar> ・ Although sales activities were constrained by COVID19, demand for tractors grew・ Impact of the coup should be monitored.

2. Orders at ISEKI<Indonesia> ・ Decrease from the previous year due to a decreasein tendering volumes<Myanmar> ・ Sales expansion through IST which has become asubsidiary
Political unrest is a risk factor

3. PT ISEKI INDONESIA (Manufacturing Subsidiary)(Units, JPY bn) 2019 Results

2020 Results

2021 Plan

Production
Volume12,60010,76014,630Operating
Income

0.3

0.3

0.4

Financial Results Briefing for the Fiscal Year Ended December 31, 202032

Market Trend (Asia)
China

South Korea, Taiwan

1. Trends in the Agricultural Machinery Industry by Product Type

2021

<South Korea>
・ Acreage for rice is levelling off despite the aging of farmers anddecrease in the number of farming households. Need for large-size,
high efficiency machinery is growing as agricultural industry
restructures and moves to large-scale farming. Sales growth ofhigh-performance agricultural machinery is expected to continue.
<Taiwan>・ In 2020, as in the previous year, demand for both tractors andcombine harvesters increased due to the subsidy system forpurchase of large agricultural machinery. With demand pulledforward, a reactionary decline in demand is expected this year.

14.0

2. Sales at ISEKI

Jan.-Dec.
2018

Jan.-Dec.
2019

Jan.-Dec.
2020

Rice transplanters (riding)

80.2%

108.8%

128.4%

Combine harvesters(all-purpose, auto-threshing)

78.1%

83.1%

110.1%

Tractors(medium- to large-sized)

79.2%

125.3%

136.0%(YoY change in units, %)Source: China Association of Agricultural Machinery Manufacturers

2. National Government Subsidy(RMB bn）

2015

2016

2017

2018

2019

2020

23.8

23.7

18.6

18.6

18.0

18.0

3. Situation of Dongfeng Iseki■Number of units sold (Jan.-Dec. 2020）
 Rice transplanters (riding):
YoY 272%
 Tractors, combine harvesters: YoY 82%
 Riding control machines:
Significant increase YoY

1. Market Trends(Primary)<South Korea>
・Sales increased YoY capturing demand for large-size, highperformance machinery.
<Taiwan>・Significant YoY increase. Growth expected in sales of ricetransplanters and vegetable transplanters this year. Monitoring
pullback in demand following cessation of subsidies.

Financial Results Briefing for the Fiscal Year Ended December 31, 202033

Topics

Financial Results Briefing for the Fiscal Year Ended December 31, 2020

Conversion of Thai Distributor to Consolidated Subsidiary
IST Farm Machinery Co., Ltd. becomes a consolidated subsidiary*December 20202013 Established as a joint venture with Mitsubishi Corporation to
expand the ASEAN business
Investment ratio: Mitsubishi Corporation 80% ISEKI 20%
2020 Partial acquisition of IST shares from Mitsubishi Corporation
Investment ratio: Mitsubishi Corporation 19% ISEKI 81%
A visit to dealers under the new system••

Integration of ISEKI operations from production through to sales
Strengthened service offering through consolidation and rationalization of “ISEKI(THAILAND) Co., Ltd.,” the sales and service base of the Company’s ASEAN businessAccelerate development of ASEAN business by fully leveraging
know-how accumulated in Japanese agriculture business
Financial Results Briefing for the Fiscal Year Ended December 31, 202035

Notes on the Future Forecast•The objective of this presentation document is to provide information and never intends to induce
any action.
•The document was created by ISEKI with currently available information and it involves potential
risks and uncertainties. The forecast may not be consistent with actual results depending on
fluctuation of the economic situation and market trends.
•In using this information, investors are expected to depend on their own judgment. ISEKI is notliable for any losses incurred by investment decision made utilizing the business forecast or targets
given in this document.

ISEKI group is a promotional partner of FOOD ACTION NIPPON

Financial Results Briefing for the Fiscal Year Ended December 31, 202036