#1ISEKI ISEKI & CO., LTD. Financial Results for the Second Quarter Fiscal Year Ending December 31, 2022 Investor Relations Presentation Materials ISEKI & CO., LTD. August 22, 2022#2INDEX ISEKI TRANSFORMATION IX 2025 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 珍珍珍 Solution Provider 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 for Agriculture & Landscape 2#3ISEKI TRANSFORMATION IX2025 1. Outline of Financial Results for the Second Quarter Fiscal Year Ending December 31, 2022 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 3#4Key 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 for business continuity, etc., which had stimulated demand in the same period of the previous year Decrease in purchasing power due to falling rice prices Overseas: Sales increase in all regions (North America) Compact tractors market entered an adjustment phase, but orders to recover the local inventory levels were brisk. (Europe) Delay in recording part of sales due to a system failure at an OEM partner Strong sales as we catered to lifestyle changes Earnings: Soaring raw material prices and supply chain disruption put pressure on earnings Increase in SG&A expenses, such as distribution cost <Full-year Forecast> No revision to the initial forecast 夢ある農業応援団と * ISEKI TRANSFORMATION IX2025 2Q Net Sales (JPY bn, %) 86.6 82.2 86.7 77.5 72.2 Domestic 22.3% 22.7% 20.8% 27.7% 33.6% Overseas 2Q FY2018 FY2019 FY2020 FY2021 2Q 2Q 2Q FY2022 2Q 2Q Operating Income, Ratio (JPY bn, %) 4.7 2.5 2.1 1.6 1.2 2Q [Operating Margin] 2.7% 2.1% 1.8% FY2018 FY2019 FY2020 2Q 2Q 5.4% 3.0% FY2021 FY2022 2Q 2Q Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 4#5Market & Business Environments in the Second Quarter [Legend] ✓ = Market environment ✓ Impact of COVID-19 <Overall> <Domestic> <Overseas> ➤ = Business environment Market & Business Environments ISEKI TRANSFORMATION IX2025 Supply chain disruption (shortage of containers for marine transportation, delayed procurement of parts for production) Soaring raw material prices Impact on sales activities, including exhibition cancellations Pullback effect with withdrawal of government subsidies for business continuity, which had stimulated demand in the same 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 ✓ 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 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 <Overall> ✓ 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, 2022 夢ある農業応援団と LO 5#6Outline of Consolidated Business Performance (January 1, 2022 to June 30, 2022) FY2018/12 ISEKI TRANSFORMATION IX2025 (JPY bn, %) FY2019/12 FY2020/12 FY2021/12 FY2022/12 2Q Actual 2Q Actual 2Q Actual 2Q Actual 2Q Actual YOY Change Net Sales 82.2 77.5 72.2 86.6 86.7 0.0 (Domestic) 63.9 59.9 57.2 62.6 57.5 (5.0) (Overseas) 18.3 17.5 14.9 24.0 29.1 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) Attributable 1.6 0.6 0.9 4.1 2.5 (1.5) to Owners of Parent Average US$ 108.8 110.7 108.5 106.8 119.2 12.4 Exchange Rate (JPY) Euro 133.1 125.7 119.7 129.1 131.6 2.5 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 6#7Domestic Sales YOY JPY5.0 billion decrease ISEKI TRANSFORMATION IX2025 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 (JPY bn) YoY Change 2Q Actual 2Q Actual 2Q Actual 2Q Actual 2Q Actual Cultivating & Mowing 16.3 15.1 13.3 14.7 Main factors of YoY changes 14.3 (0.3) Agricultural Machinery Related Agricultural Machinery Machinery Planting 6.4 6.1 5.5 6.4 5.5 (0.9) Machinery Harvesting & Processing 5.4 5.3 4.3 4.8 5.4 0.5 Machinery Subtotal 28.2 26.6 23.1 25.9 25.3 (0.6) 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 with withdrawal of government subsidies for business continuity, etc., which had stimulated demand. Farming 11.7 11.9 10.6 13.5 10.9 (2.5) Implements 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) Although revenues from machinery and farming implements declined, maintenance revenues, such as spare parts sales and repair fee revenues, maintained the same level year on year. 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) Total 63.9 59.9 57.2 62.6 57.5 (5.0) 夢ある農業応援団と* Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 7#8Overseas Sales YOY JPY5.1 billion ISEKI TRANSFORMATION IX2025 Sales increased in all regions due to sales promotion that meets market needs and yen depreciation FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12 (JPY bn) YoY Change 2Q Actual 2Q Actual 2Q Actual 2Q Actual 2Q Actual North America 58 6.6 5.0 7.8 8.4 0.5 North America: Europe 7.7 7.3 6.4 10.8 14.2 3.4 Main factors of YoY changes 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 part of sales due to a system failure at an OEM partner Sales increased due to strong sales, mainly to consumers, as we catered to lifestyle changes, and sales to professionals also increased as demand for landscaping recovered Sales increased due to concentration of shipments due to Stage 5 emission standards in South Korea Europe: 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 ✓ Asia: Total sales 18.3 17.5 14.9 24.0 29.1 5.1 夢ある農業応援団と Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 8#9Operating Income YOY JPY2.1 billion decrease ISEKI TRANSFORMATION IX2025 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 (JPY bn, %) YOY Change 2Q Actual 2Q Actual 2Q Actual 2Q Actual 2Q Actual Gross profit: (0.6) (1.3) 0.4 SG&A expenses: (1.5) 0.3 (0.5) (0.2) (0.4) (0.4) 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)% 4.7 2.5 SG&A Expenses 21.3 20.8 20.1 21.0 22.6 1.5 FY2021/12 2Q Impact of soaring Response to Personnel raw material prices, etc. 12.4 12.2 12.0 12.3 12.8 0.4 soaring raw material prices Impact of exchange rate (gross profit) Increased logistics expenses Impact of exchange rate (SG&A expenses) Improve- ment of labor conditions, etc. Increased SG&A expenses FY2022/12 2Q Expenses 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) Net Sales Cost of Sales [Effect of FOREX Fluctuations (JPY bn)] Operating Income SG&A Expenses Operating 2.7% 2.1% 1.8% 5.4% 3.0% (2.4)% 1.5 (1.2) (0.2) 0.1 Margin 夢ある農業応援団と* Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 9#10Ordinary Income & Profit Ordinary income YOY JPY2.1 billion decrease ISEKI TRANSFORMATION IX2025 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 FY2019/12 FY2020/12 FY2021/12 FY2022/12 Non-operating Income (YoY Change) (JPY bn) YoY Change 2Q Actual 2Q Actual 2Q Actual 2Q Actual 2Q Actual Foreign exchange gains 0.4 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 Absence of settlement received, etc. (0.4) 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 1.8 0.7 1.6 5.4 3.1 (2.2) Taxes Income Taxes - Deferred (0.2) (0.1) (0.6) (1.2) (0.6) 0.6 Profit (Loss) Attributable 1.6 0.6 0.9 4.1 2.5 (1.5) to Owners of Parent 夢ある農業応援団!* Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 10#11Balance Sheet YoY Change ISEKI TRANSFORMATION IX2025 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 As of Jun. (JPY bn) 30, 2021 As of Dec. 31, 2021 As of Jun. 30, 2022 Change from Dec. 31, YOY Change As of Jun. 30, 2021 As of Dec. As of Jun. 31, 2021 30, 2022 2021 Change from Dec. 31, 2021 YOY Change Cash & Deposits 14.3 14.8 13.2 (1.6) (1.0) Accounts Payable - Trade 41.1 39.2 44.4 5.1 3.3 Accounts Receivable - Trade 32.1 21.5 34.3 12.7 2.1 Interest-bearing Liabilities 67.2 62.1 67.1 4.9 (0.1) Inventories 47.7 49.8 53.1 3.2 5.3 (Loans Payable) 59.4 54.9 60.1 5.1 0.6 (Merchandise & Finished 40.0 41.5 42.2 0.7 2.2 Other Liabilities 19.6 19.6 20.9 1.2 1.2 Goods) (Work in Progress) 6.5 7.0 9.5 2.4 2.9 Other Current Assets 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 and 85.4 84.9 84.6 (0.3) (0.8) Equipment 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 9.5 9.3 9.9 0.6 0.4 (Retained Earnings) 18.6 17.6 19.5 1.9 0.9 Assets 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 W 夢ある農業応援団と* Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 11#12Equity Ratio / Interest-bearing Liabilities ISEKI TRANSFORMATION IX2025 Interest-bearing liabilities remained at the same level year on year liabilities, D/E ratio D/E ratio was 0.97 Interest-bearing 100 60 80 Balance of Interest-bearing Liabilities (JPY bn) 60 60 40 40 Loans payable, corporate bonds Lease obligations Total 32.3 32.5 31.5 33.5 33.3 35 Equity Ratio (%) 30 25 15 75.2 76.8 74.1 72.4 25 67.2 67.1 20 32.0 Jun. 2017 Jun. 2018 Jun. 2019 Jun. 2020 Jun. 2021 64.8 67.8 67.8 68.6 59.4 Jun. 2022 60.1 7.6 6.3 7.4 8.2 7.7 6.9 72.4 74.1 75.2 76.9 67.2 67.1 1.00 0.97 D/E ratio 1.05 1.04 1.10 1.11 Note: D/E Ratio=Interest bearing liabilities (incl. Lease obligations) / Net assets 夢ある農業応援団! *50 Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 10 5 0 12#13Statements of Cash Flows Cash flows ISEKI TRANSFORMATION IX2025 Cash flows from operating activities for the period were ¥(2.0) billion due to increases in trade receivables and inventories FY2018/12 FY2019/12 FY2020/12 FY2021/12 FY2022/12 (JPY bn) 2Q Actual 2Q Actual 2Q Actual 2Q Actual 2Q Actual YOY Change Cash flows from operating activities (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 Decrease (increase) in trade receivables (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 Cash flows from investing activities (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) 夢ある農業応援団と Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 13#142. Domestic and Overseas Markets 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 NE SF450 ISEKI TRANSFORMATION IX2025 14#15Domestic Agricultural Machinery Market Trends Domestic Agricultural Machinery Demand ISEKI TRANSFORMATION IX 2025 Moderate 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 the decreased 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) 280 260 240 220 Oct. 2019 Consumption tax increase 200 Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. 2017 2018 2019 2020 2021 2022 Jun. *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 夢ある農業応援団! *50 Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 15#16Domestic Agricultural Machinery Market Trends: Trends in Agricultural Administration Realizing Sustainable Agricultural Businesses ISEKI TRANSFORMATION IX2025 "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 the balance 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] • Automatic steering systems (adoption rate at farmers' end): • Use of chemical pesticides (risk weighted): ⚫Use of chemical fertilizers: - Organic farming: <Targets for 2050> 50% reduction 30% reduction Increase to 1M ha (equivalent to 25% of farmland) <Targets for 2030> 50% 10% reduction 20% reduction 63,000 ha * Source: Extracted from "Strategy for Sustainable Food Systems MeaDRI" of the Ministry of Agriculture, Forestry and Fisheries (May 2021) and KPIs & Targets for 2030 under "Strategy for Sustainable Food Systems MeaDRI" (June 2022) 夢ある農業応援団と * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 16#17Domestic: Initiatives of ISEKI |Promote environment-friendly smart agriculture Straight- travel assisted specs * Automatic steering (including robots) Sensing Partial fertilization 夢ある農業応援団! * ISEKI TRANSFORMATION IX2025 Reduce fuel consumption through work optimization ✓ ✓ Rice transplanters: from 2017: About 60% of the 8-row class rice transplanters have these specs 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 Variable fertilizer rice transplanters: Reduce fertilizer usage by approx. 30% (Rough estimation when variable fertilization is applied for side dressing) 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 by approx. 30-50% Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 17#18Domestic: Initiatives of ISEKI ISEKI TRANSFORMATION IX2025 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 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 18#19Domestic: Initiatives of ISEKI ISEKI TRANSFORMATION IX2025 Promote smart agriculture and environment-friendly agriculture through collaboration 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 of an environment-friendly agriculture model ✓ Niigata City (Niigata Pref.) from Jan. 2022 Promotion of sustainable agriculture utilizing advanced technology ✓ Three-way collaboration with Shimane Pref. and Hamada City from Feb. 2022 Creating organic rice production areas for sustainable development 夢ある農業応援団と 人 三堂街串 DK エナリーションズ SEKI Tsukubamirai City (Ibaraki Pref.) from Mar. 2020 Promotion of agriculture utilizing advanced technology ✔ Yukimai Design Co., Ltd. (Tokyo Pref.) from Jun. 2021 Concluded a business alliance with the aim of popularization and 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#20Market Trends (North America, Europe) North America 1. Market Trends (1,000 units, %) 1. Market Trends Jan. to Jun. cumulative • Category (PTO HP) 2020 2021 2022 Difference 40 HP and lower . 110 129 109 85% (Compact tractors) 40-100 HP 33 39 35 89% (Utility tractors) 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% 3. Shipments and Orders at ISEKI Shipments and Orders (Jan.-Sep. 2022): YoY 120% (Including order backlog from the previous fiscal year) ISEKI TRANSFORMATION IX2025 Europe Consumer demand remains strong due to lifestyle changes 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 shortages of local distribution inventory 3. Shipments and Orders at ISEKI •Shipments and Orders (Jan.-Sep. 2022): Significant increase YoY (Including order backlog from the previous fiscal year) • A shortage of containers for marine transportation led to unfulfilled shipments, etc. 夢ある農業応援団と ⚫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#21Strengthening Sales Structure in Europe Made ISEKI-MASCHINEN GMBH DEUTSCHLAND (ISEKI Germany) into a consolidated subsidiary (in July 2022) DISEKI PREMIUM TURF-CARE LTD. (Non-consolidated, 44.5% of equity) ISEKI Germany (Consolidated subsidiary) ISEKI TRANSFORMATION IX2025 Community-based sales and service network Strengthen sales structure Reorganized the sales network in Europe with 3 companies as pillars ⚫ ISEKI France ⚫ ISEKI Germany PREMIUM TURF-CARE DISEKI FRANCE ננננ ISEKI France S.A.S. (Consolidated subsidiary) 夢ある農業応援団と * 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 21#22Europe: 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 to achieve a carbon neutral society •Achieved zero emission ■Low noise and vibration .Rechargeable at Environmental performance Ease of handling household electrical outlets Basic Good at mowing performance damp wet grass ISEKI ELECTRIC Bacig ISEKI TRANSFORMATION IX2025 SXGE2 SBC 402 Sales areas: France, Germany, Belgium, Netherlands, U.K., etc. 夢ある農業応援団と * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 22 22#23Market Trends (Asia) Thailand 1. Market Trends For paddy fields: Sluggish due mainly to stagnant rice trading prices For dry fields: Purchasing prices of fruits, rubber, palm and other 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% 3. Shipments and Orders at ISEKI Shipments and Orders (Jan.-Sep. 2022): YoY 106% ISEKI TRANSFORMATION IX2025 Indonesia, Myanmar 1. Market Trends <Indonesia> Budget for government tenders is shrinking as funds are diverted to COVID-19 prevention measures <Myanmar> Sales activities of sales outlets were affected by a chaotic 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 the coup d'état became prolonged 3. PT. ISEKI Indonesia (Manufacturing Subsidiary) 2021 2022 (Units, JPY bn) Actual 2Q Actual Plan 2Q Actual Production Volume 15,680 7,790 17,170 7,460 Operating Income 0.3 0.2 0.3 0.1 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 23 23#24Thailand: Product Strategy ISEKI TRANSFORMATION IX 2025 Introduced a made-in-India small-sized tractor (27 HP) to the market ✓ The first product developed under the technical and business alliance with Tractors and Farm Equipment Ltd. (TAFE) ✓ Aim to accommodate demand for field crops such as cassava and sugar cane TAFE ✓ $ ISEKI ISEKI 227 Low price & high durability 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 24 24#25Market Trends (Asia) China 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 ISEKI TRANSFORMATION IX2025 South Korea, Taiwan 1. Market Trends <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 Demand for tractors and combine harvesters decreased significantly due to a pullback effect with withdrawal of subsidies <Taiwan> (YoY Change in Units, %) Rice Transplanters (riding) Combine Harvesters (all- purpose, auto-threshing) Jan.-Jun., 2020 Jan.-Jun., 2021 Jan.-Jun., 2022 125.9% 140.6% 90.2% 91.9% 125.2% 108.0% 2. Shipments and Orders at ISEKI (Jan.-Sep., 2022) Tractors 128.7% 122.8% 107.5% (medium to large-sized) 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> Increased shipments due to higher sales of rice transplanters and concentration of shipments of tractors and combine harvesters due to Stage 5 emission standards (in the first half of the year) Shipments were YoY 117% <Taiwan> Promoted merchandise such as rice transplanters and vegetable transplanters 夢ある農業応援団と * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 25#263. Performance Forecast for the Fiscal Year Ending December 31, 2022 ISEKI TRANSFORMATION IX2025 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 26 26#27Forecast of Consolidated Financial Results for the Fiscal Year Ending December 31, 2022 Consolidated Financial Results Forecasts •No change to overall initial forecast ISEKI TRANSFORMATION IX2025 ▪Revised the breakdown of net sales considering the 2Q results and orders received at this time [Full-year consolidated financial results forecasts] (JPY bn, %) Previous forecast Note Revised forecast 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 Owners of Parent 3.1 3.1 27 27 [Breakdown of net sales] (JPY bn) Previous forecast Note Revised forecast 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 夢ある農業応援団! *50 Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022#28Forecast of Consolidated Financial Results for the Fiscal Year Ending December 31, 2022 [Full-year consolidated financial results forecasts] ISEKI TRANSFORMATION IX2025 (JPY bn, %) FY2018/12 Actual FY2019/12 FY2020/12 FY2021/12 FY2022/12 YoY change Actual Actual Actual Revised forecast 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 1.0 0.7 (5.6) 3.1 3.1 (0.0) Parent Year-end Dividend (JPY) 30 30 0 30 30 0 Breakdown of Net Sales 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 Average US$ 110.2 109.3 107.0 109.0 128.7 19.7 Exchange Rate (JPY) 夢ある農業応援団! *50 Euro 130.9 121.6 121.5 129.8 135.8 6.0 Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 28#294. Topics ISEKI TRANSFORMATION IX2025 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 29 29#30Topics: Intellectual Property 1. Number of patents registered in Japan by sector ISEKI TRANSFORMATION IX2025 Ranked No. 2 in the Other Special Machinery Sector Year 2000-2006 2007-2014 Number of patents published by Statistics sector Agriculture and Sector Fishery Rank 2. Patent grant ratio First 2016-2017 2018 2019 2020 Number of patents registered by sector Other Special Machinery Second 2021 First Second Second Ranked No. 1 in All Industries Year 2004-2010 Patent grant rate 2011 91.8% 2012 2013 94.7% 97.0% 2014 2015 2016 2017 99.2% 97.5% 100.0% 98.1% 2018 96.4% 2019 2020 2021 97.7% 98.7% 97.2% Rank First Second First Second First * 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) 夢ある農業応援団! * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 30 30#31Topics: 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) Domestic sales ratio of eco products*2 Domestic sales ratio of 50% by 2030 Revise Mid- to Long-term targets 46% reduction by 2030 (total amount) at overseas production sites (vs. 2014 level) Step up our efforts Backcasting Reduce CO2 emissions across ISEKI Group (Formulate a Group-wide target in 2022) Formulate a reduction target in coordination with suppliers (Scope 3), which accounts for 70% of the Group's transaction amount Domestic sales ratio of 65% by 2025 ISEKI TRANSFORMATION IX2025 Environmental Vision Aim to achieve a sustainable society based on carbon neutrality by 2050 Revise TCFD TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES [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 夢ある農業応援団と * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 31 31#32Topics: Strengthening ESG Initiatives Established "ESG Committee” (on August 10, 2022) ISEKI TRANSFORMATION IX2025 Purpose: Centralize organizational management through covering the aspects of environment, human capital, governance and compliance as we address various ESG-related issues in general ⚫Role: 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 enhancement of ESG and make recommendations to the Board of Directors • Structure: Chairperson: Independent Outside Director Members: Directors and Corporate Officers Issuance of ISEKI Report 2022 Contents ✓ ISEKI Group's value creation aims ✓ Business strategies for value creation ✓ Foundation for sustainable growth, etc. ISEKI ISEKI & CO., LTD. ISEKIレポート2022 URL of the ISEKI Report: https://www.iseki.co.jp/english/csr/report/ 夢ある農業応援団と * Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 詳閱農摄描式会社 32 32#33Notes on the Future Forecast ISEKI TRANSFORMATION IX2025 . 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 not liable for any losses incurred by investment decision made utilizing the business forecast or targets given in this document. 未来の COOL ために、 CHOICE いま選ぼう。 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 deliver environmental-friendly products like "eco products". 夢ある農業応援団と * 食から日本を考える。 NIPPON FOOD SHIFT Financial Results Briefing for the Second Quarter of the Fiscal Year Ending December 31, 2022 33