Financial Results for the Third Quarter
Fiscal Year Ending December 2016
Investor Relations Presentation Materials

ISEKI & CO., LTD.

Shirou Tomiyasu,
Director & Senior managing executive officer
November 15, 2016

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

Index

1. Outline of Financial Results for the Third Quarter
Fiscal Year Ending December, 2016
2. Recent Development in Domestic and Overseas
Markets
3. Performance Forecast for the Fiscal YearEnding December, 2016
4. Topics

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

2Remarks on year-on year comparison

As a transitory treatment, 9-month results are consolidated for fiscal 2015.
Consolidation period (Restated basis)
FY 2015

FY 2016

Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec
Companies that have adopted Mar.31
as the fiscal year-end
ISEKI & CO.,LTD and others
Companies that have adopted Dec.31 as thefiscal year-end
Domestic sales c ompanies & others

Note: The subsidiary in France only adopts the end of September as its fiscal year end.
(The results from Oct. to Jun. are consolidated in the 3rd quarter.)ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

31.Outline of Financial Results of the Third Quarter
Fiscal Year Ending December, 2016

(Billions of yen)

Net Sales【9-month】

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

Outline of Third Quarter Business Performance(JPY bn, %)Item

3Q of FY ended
Dec.2015
Restated basis

3Q of FY ending
Dec.2016
Actual％％yoychange(Restatedbasis)

117.7

100.0

118.4

100.0

0.7

Domestic

93.0

79.0

91.9

77.6

(1.1)

Overseas

24.7

21.0

26.5

22.41.8

Operating Income

1.1

0.9

2.8

2.4

1.7

Ordinary Income

0.9

0.8

1.6

1.4

0.7

0.7

0.6

Net Sales

Profit attributable toowners of parentexchange

US$rate

Euro

119.9
135.8

109.6
122.9

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials(10.3)(12.9)
5

Breakdown of Domestic Sales

Agricultural Machinery

Agricultural Machinery Related

3Q of
FY ended
Dec.2015(JPY bn,)yoychange(Restated basis)
Note

Restated basis

3Q ofFY ending
Dec.2016
ActualCultivating &Mowing Machinery

22.7

21.3

(1.4) Tractors：(1.6)

Planting Machinery

7.8

7.4(0.4)

Rice transplanters：(0.6)

Harvesting &Processing Machinery

14.2

14.3

0.1

Combine harvesters：(0.4)

Total

44.7

43.0

(1.7)

Farming Implements

13.8

14.9

1.1

Total

10.5
3.6
27.9

10.9
3.9
29.7

0.4
0.3
1.8

Total

72.6

72.7

0.1

Others

4.6
15.8

4.3
14.9

(0.3)
(0.9)

Total

93.0

91.9

(1.1)

Spare parts
Repair fees

Construction of Facilities

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

Transplanters：+0. 2Rice husker：+0. 3

6

Breakdown of Overseas Sales(JPY bn,)

3Q ofFY ended
Dec.2015
Restated basis

3Q ofFY ending
Dec.2016
Actual

9.4
7.5
2.4
2.5
1.6
23.4
3.1
26.5

(0.2) Lawn mowers：+0.1
Tractors：(0.5)(1.8) Lawn mowers：(1.3)
Tractors：+0.6
1.4 Rice transplanters：+0.9
Tractors：+1.3
1.5 Rice transplanters：+0.1
Tractors：+0.1
0.2 Rice transplanters：+0.2
1.1
0.7
1.8
(0.3)

Total

9.6
9.3
1.0
1.0
1.4
22.3
2.4
24.7

Overseas Sales incl. ChineseBusinesses

31.2

30.9

25.1%

25.2%

North AmericaEurope
China
ASEAN
Others
Product Sales Total
Parts & Others

Ratio of overseas net sales

yoyChange(Restated basis)
NoteTractors：(0.3)

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

7

Operating Income(JPY bn, %)

Item

3Q of
FY endingDec.16
Restated basis
Actual3Q ofFY ended
Dec.15【 Factors of YoY change(JPYbn,)】
＋１.８

yoy
Change(Restatedbasis)

Net Sales

117.7

118.4

0.7

Gross Profit

34.7

34.6(0.1)

Gross Profit Margin

29.5%

29.2%

(0.3%)

S.G&A.Expenses

33.6

31.8(1.8)

personnel expenses

19.4

18.6(0.8)

Other expenses

14.2

13.2(1.0)

Operating Income

1.1

2.8

1.7

Personnelexpenses＋０.８(0.1)
OperatingIncome

Decrease ingross profit

Otherexpenses＋１.０

Operating
Income２.８

Reduced
SG&A

１.１

3Q of FY
ended Dec.15
Restated basis

Operating Income＋１.７

3Q of FY
ending Dec.16
Actual【 Effects of forex move(JPYbn,)】
Net sales Cost of sales S.G&A.Expenses Operating Income(1.9)＋1.2＋0.2

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

(0.5)
8

Ordinary Income and Net Income(JPY bn,)

3Q of
FY endedDec.15
Restated basis

Operating Income
Balance of Financial Income
Other Non-operating Income

Ordinary Income
Extraordinary Income
Extraordinary Losses
Income before Income Taxes

Taxes, Deferred Taxes
Profit (Loss) attributable toowners of parent

1.1(0.5)
0.3
0.9
0.4
(0.6)
0.7

3Q of FY
endingDec.16Actual

2.8
(0.5)
(0.7)
1.6
1.2(1.3)
1.5
(0.8)
0.7

yoychange(Restatedbasis)

1.7

(1.0)

0.70.8(0.7)

0.8【 Factors of year-on year change 】

Non-operating Income
exchange losses(0.5)

Share of loss of entities accounted forusing equity method(0.5)

Extraordinary Income
Gain on sales of investment
securities+0.9

Loss on disaster(1.1)

Posting of a surcharge in the same
period last year

+0.3

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

9Balance Sheet(JPY bn)

As of
Sep.15

As of
Sep.16

As of
Sep.15

As of
Sep.16yoychange

Cash & Deposits

7.7

14.5

6.8 Accounts Payables39.6

40.2

0.6

Accounts Receivables

32.9

33.6

0.7 Interest Bearing Liabilities

72.3

78.2

5.9

Inventories

48.8

47.2

(1.6) Other Liabilities

26.0

24.1

(1.9)

（Merchandise and finished goods）

41.9

40.0

(1.9) Total Liabilities

137.9

142.5

4.6

Other Current Assets

3.5

3.8

0.3

Total Current Assets

92.9

99.1

6.2

69.2

65.8

(3.4)

Non-current Assets

96.6

97.8

1.2 (Retained earnings)

14.3

13.9

(0.4)

Investments and other assets

17.6

11.4

(6.2) available-for-sale securities)(Valuation difference on

2.4

0.5

(1.9)

Total Non-current Assets

114.2

109.2

(5.0) (Foreign currency translation adjustment)

1.80.3(1.5)

Total Assets

207.1

208.3

1.2 Total Liabilities and Net Assets 207.1

208.3

1.2

yoychange

Net Assets

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

10Interest Bearing Liabilities & Equity Ratio
Balance of Interest Bearing Liabilities (JPY bn)

Equity Ratio (%)

Sep.2012 Sep.2013 Sep.2014 Sep.2015 Dec.2015 Sep.2016

Total

43.8
6.1
49.9

46.9
6.7
53.6

46.2
8.0
54.263.1
9.2
72.3

56.7
9.1
65.8

69.7
8.5
78.2

D/E Ratio

0.83

0.81

0.79

1.05

0.97

1.19

loan payable,corporate bondLease obligations

Note: D/E Ratio= Interest bearing liabilities(incl. Lease liabilities) / Net assets
ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

112.Recent Development in Domestic
and Overseas Markets
Co-developed with female farmers for the 2nd time
Tiller “Chocopuchi” (Available since Dec.2016)

KCR605W

KM27BDW

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation MaterialsKM17W

Trend Of Domestic Market and Our Sales Result
Domestic industry shipment(9 principal machinery, moving annual total from 2008 to 2016)

400(JPY bn)

350

Market demand slightly declined
since 2015

300

250

0200

Dec./08

Dec./09

Dec./10

Dec./11

Dec./12

Dec./13

Dec./14

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

Dec./15

Sep./1613

Situation of Domestic Sales
Agriculture Related Business(JPY bn)

2Q ofFY ended
Dec.15Agricultural Machinery

Agriculture Related

Restated basis

2Q ofFY endingDec.16
Actualyoychange(Restated basis)

Cultivating &Mowing Machinery

22.7

21.3

(1.4)

Planting Machinery

7.8

7.4(0.4)

Harvesting &Processing

14.2

14.3

0.1

Total

44.7

43.0

(1.7)

Farming Implements

13.8

14.9

1.1

Parts

10.5

10.9

0.4

Repair fees

3.6

3.9

0.3

Total

27.9

29.7

1.8

Total

72.6

72.7

0.1

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

Sales from
Farming
Implements,
Parts and Repair
fees offset thedecline in sales
from AgriculturalMachinery

14Situation of vegetable production mechanization
Integrated system of vegetable production mechanization
Seeding/
Transplanting

Cultivation
Large

Fieldmanagement

Harvesting

Scale

Tractor/Specializedmachinery

Tiller/Multipurposevehicle

SmallSales trend of our vegetable machinery(Annual moving total)(Unit)

1000
800
600
400
200
0

Transplanter

１２７％

15/Oct. 16/Oct.

(Unit)

300
250
200
150
100500Multipurpose machine(Unit)

Harvester

150
100

１３９％

50

１３８％

015/Oct.

16/Oct.

15/Oct. 16/Oct.

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

15Tillers/Multipurpose Machines

Demand for tillers &multipurpose machinery

Full-time farmer

１１２ thou. units

Ordinary farmer*From Oct.2015 to Sep.2016(Vegetable production)(for self-supply)

Hobby & Home gardening

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

16Launching of new tiller products
Market needs

Users
Farmers

Women
Elderlypersons

Non-farmers

Full-time farmers

Needs
SafetyDevelopmentfrom female
viewpoints

Easy to handle

Femalefarmers

Chocopuchi(Announced on November 4)
ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

17Recent Market Trend in Overseas
FY Dec.16 FORCAST(Announced onFeb.12th )¥30.8billion(JPY bn)
35*FY Dec.16Sales(Perspective)¥28.4billiomn

30252015

FY Dec.15 Restated
Actual10¥28.6 billion

50JanFebMar

AprMayJunJul

Aug

Sep

Oct

Nov

Dec

* Shipment result (from Jan.- Sep.) + Orders received (from Oct.-Dec.)

The results of “Parts & Others” are not included.

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

18Market Trend (North America)
1. Market in North America
Category(PTO HP)(Unit: 1000)

Utility Tractors (PTO 40HP or above, 100HP or below)

USAUSA

CanadaJan.-Sep., 2015

454Jan.-Sep., 2016

434Growth rate

96%90%

Compact Tractors (PTO 40HP or below )

49
4695%

Canada94

101041058113

112%

86%

109%

2. Situation of AGCO (OEM partner)
Unit sales (16/Jan.-Sep.)
Utility tractors: Almost in line with the previous

Source: Association of Equipment Manufacturers statistics
Figures have been rounded and non-adjusted.

Net Sales in North America(Actual: 12.8)(Forecast: 10.7)

yearCompact tractors: Higher than last year

3. Our situationOrder & shipment (Jan. –Dec.): Lower than last year(Restated)• Although sales competition in the small-medium sized tractor is getting tougher, sales of AGCO outperformed the market.
• Sales in North America are expected to be less than last year reflecting the impact of the strong yen in addition to part ofsales being posted in the next fiscal year due to partial amendments to the terms of business with AGCO.

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

19Market trend (Europe)
1. Trend in European market
Market demand remains stagnant due to bad weather such as unusually long rain and dry weather

2. Situation of distributors

Net Sales in Europe

 Unit sales (from 16/Jan.- Sep.)•Distributors:•

ISEKI France:
Lower than last year
[Consolidated subsidiary](Actual: 11.0)(Forecast: 9.3)

Lower than last year

(Restated)• Sales of the distributors from Jan.- Sep. decreased due to weak demand caused by the bad weather.
Current sales, however, show a recovery trend by running the winter sales campaign ahead of schedule.

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

20Market Trend (Thailand)
1. Trend in Thai market
Although the market demand significantly decreased by drought, there has been a sign of recovery since
the rainy season started. However, it will take some more time before the demand recovers completely
considering the sluggish rice price and the uncertainty to the economy after the king of Thailand passedaway.

2. Situation of ISEKI (Sales) Thailand (Mitsubishi Corporation 80%, ISEKI 20% investment)
ASEAN strategic tractors (launched last year)• Effective sales (Jan.-Sep.): Higher than last year
All-purpose combine harvester (launched in August this year)• Launching of new product (all-purpose combine), expansion of sales network, further sales volume• New subsidiary “ISEKI(THAILAND)CO.,LTD”(Established in Nov. as a wholly owned subsidiary”)• Development/procurement/sales of spare parts,implements, etc.
• After-sales service support through spare parts
center, etc.

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

21Market Trend (Indonesia)
1. Trend in Indonesian market
Introduction of agricultural machinery nation-wide prompted by the government(tender)

2. Our situation of sales
We received orders for tractor and walk-behind rice transplanters this year as well.

•The number of orders exceeding theprevious year

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

22Market Trend (Indonesia)
3. Situation of production• PT. ISEKI INDONESIA Production volume trend and our commitments
2014Actual

Production model

Production volume

North America

2015Actual

1,100

2016(Forecast)

3,900

7,300

8,200

• Economy tractor (large)• Economy tractor (small)

Europe2017(Plan)• Economy tractor

ASEAN• ASEAN strategic tractor

Focus on the production

Strengthen procurement

Commitments
Promotion oflocal procurement

Bolster production control

Reinforcethe foundationsof production

PT. ISEKI INDONESIA reaches full production

 Establishment of “Business in Indonesia Promotion Department” on Nov.1

We will reinforce the foundations of our production in an effort to enhance
productivity through optimal procurement etc.
ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

23Market Trend (China)
1. Trend in Chinese market
Government subsidy(Yuan bn)

200820092010

2011

2012

2013

2014

2015

2016

4.0

13.0

15.5

17.5

21.5

21.8

23.8

23.8

1 period 22.8
Annual 23.74

stTrend of ISEKI’s sales in China (Yuan base)

2. Situation of Dongfeng Iseki(Yuan bn)

Sales of Dongfeng Iseki (16/ Jan.-Sep.)*Excluding export to Southeast Asia from China
２．当社の状況Rice transplanters(walk-behind & ride-on): Higher than last year

40
31.5

35

29.2

30
25
20

15.3

15

Combine harvesters: Higher than last year

103.3

5

Tractors (Full-fledged sale): Got off a good start

10.3

9.17.701Q

2Q

3Q

4Q

FY Dec.15(Restated)

1Q

2Q

3Q

FY Dec.16

We will increase production through establishment of the new plant whose construction will becompleted in Dec. and also promote further sales expansion.
ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

243.Performance Forecast For theFiscal Year Ending December, 2016

Variable fertilizing 8-row rice transplanter
NP80-FVISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

Performance Forecast for FY ending Dec.16
1. Performance forecast
Item

FY endedDec.15
Restatedbasis(JPY bn)

FY ending Dec.16
Previous
forecast*

Change fromthe same
periodlast year

Latestforecast*

Net Sales

156.8

161.5

155.5

(Domestic)

125.4

127.8(Overseas)

31.4

Operating Income

Ordinary Income

Previous
forecast

(1.3)

(6.0)

123.5

(1.9)

(4.3)

33.7

32.0

0.6

(1.7)

0.2

3.5

2.8

2.6(0.7)

0.4

3.2

2.0

1.6

(1.2)

1.9

0.7

Profit (loss) attributableto owners of parent(1.2)

The foreign exchange rate assumptions for the 4th quarter: JPY105 per U.S. dollar / JPY115 per euro
(The average foreign exchange rate assumptions for the fiscal year ending Dec.2016: JPY109 per U.S. dollar/JPY121 per euro)* Previous forecast: Announced on Aug 10. Latest forecast: Announced on Nov 11.

2. Year-End Dividend Forecast (JPY )Dec./16(plan)Dec./15
Year-End Dividend

1.5

1.5 - 3.0

＜Foreign exchange sensitivity＞(Operating Income, Total period base)

US$Euro(JPY million)

Foreign exhangesensitivity
1219

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

26

４． Topics

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

Intellectual Property Report~Outline of contents~
26th ISEKI TechnologicalResearch Presentation

Strategic Directions of R&DIntellectual Property Strategy
System for R&D and IntellectualProperty
Contribution of Intellectual Property toBusiness
Situation of Intellectual Property

October 2016
ISEKI & CO., LTD.
ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

28

Establishment of Global Training Center<Domestic business><Overseas business>“Changes in agricultural structure”“Development of global strategy”

Large-scale farming /China/ ASEAN

Crop conversion= “Growth engine”

Strengthening our capabilities toPropose / Support
Establishment of Dream Agricultural
Research Institute (October 2015)

Iseki Global Training Center (IGTC)(January 2017)

In Tsukuba-Mirai City/Ibaraki Pref.
ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

29

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 potentialrisks 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.

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”.

ISEKI 3Q of FY ending Dec. 16 Investor Relations Presentation Materials

30