Results of Operations for the Fiscal Year Ended February 28, 2015 (FY2/15)

Transcription

1 Selected by the Japanese Ministry of Economy, Trade and Industry as a Global Niche Top 100 Company Results of Operations for the Fiscal Year Ended February 28, 2015 (FY2/15) (Securities code: 6312) April 16, 2015

2 Table of Contents Iwao Fusejima, President & COO I. Company Overview P2 II. Progress in the Medium-term Management Plan P6 Ryujiro Fusejima, Director & General Manager, Corporate Administration Division III. Financial Summary for FY2/15 P17 IV. Earnings Forecasts for FY2/16 P28 < Supplementary Materials > P32 1

3 I. Company Overview 2

4 Our Pen (Machinery and Equipment) and Ink (Pharmaceutical Excipients) Business Model Machinery Business Segment Manufacturing and sales of granulation and coating equipment for the pharmaceutical, food, and fine chemical industries. For coating equipment, Freund ranks first in Japan and sales growth is accelerating in Asian market and in Freund-Vector s U.S. and European operations. No other company in the world has expertise in both drug formulation technologies and the associated machinery. Aiming to increase sales of machinery for industrial applications too by combining granulating and coating technologies with milling and sieving technologies. Chemical and Food Business Segment 37% Composition of Net Sales and Profit by Segment Chemical & Food 30% Machinery 70% 63% Manufacturing and sales of pharmaceutical excipients, food preservatives, nutritional supplements, and others. Freund uses Good Manufacturing Practice (GMP) compliant equipment to produce pharmaceutical excipients. Food preservatives made by Freund help ensure the safety of food by maintaining the quality of many types of products. By using its granulating and coating technologies, Freund has worked with customers to develop and commercialize nutritional supplements and seamless mini-capsules. Segment profit Net sales (FY2/15) Consolidated sales: Consolidated operating income: 17,420 million 1,150 million 3

5 Strengths of the Freund Group The Pharmaceutical Business Model Freund-Vector Corporation Quickly identifying market needs through the sharing of information on a global scale Active pharmaceutical ingredient Milling, sieving Blending, kneading Tablet Granulating Drying, grading press Coating Tablet Printing Packing Freund-Turbo Corporation Granulating and coating technologies and Freund-Turbo s milling and sieving technologies mutually complement each other as powder processing technologies. And by fusing these two technologies, a wide range of applications in the realm of powder processing technology can be provided. Freund Corporation Freund Corporation provides products that accurately match the needs of customers by sharing information between the two business segments of the machinery business and chemical and food business. Granulating equipment Coating equipment + + Excipients Film coating liquids Printing equipment + Ink Speeding up the development of new products 4

6 Two Bases for Global Growth Freund-Vector Corporation (North America, Latin America, Europe/Middle East) Freund Corporation Selected by the Japanese Ministry of Economy, Trade and Industry as a Global Niche Top 100 Company (Asia) Overseas sales 25% (FY2/15) : Demonstration center : Locations with service technicians 5

7 II. Progress in the Medium-term Management Plan 6

8 The Sixth Medium-term Management Plan Change & Challenge for a second founding to become a 100-year company. Medium to long-term targets Overseas sales ratio 40% Operating margin 10% ROE 8% or more 7

9 Targets for FY2/17 FY2/17 Targets Net sales (Millions of yen) 2 nd Medium-term Management Plan Gaining Superiority over Competitors 1 st Medium-term through the Management Plan Dynamism of Our Group Yusho 21 Plan Net sales: 23.0 billion Operating income: 2.3 billion (Foreign exchange rate assumptions: 1 USD= EURO= 145) 3 rd Medium-term Management Plan Taking On the Challenge of Globalization 4 th Medium-term Management Plan Business Restructuring and Establishment of Strategic Objectives 5 th Medium-term Management Plan Expansion of Scale, Improvement of Operations and Management 6 th Medium-term Management Plan Realization of Growth through Creativity and the Achievement of a Lean Business Structure (Millions of yen) Operating income FY2/00 FY2/01 FY2/02 FY2/03 FY2/04 FY2/05 FY2/06 FY2/07 FY2/08 FY2/09 FY2/10 FY2/11 FY2/12 FY2/13 FY2/14 FY2/15 FY2/16 FY2/17 Forecast Target 8

10 Basic Strategy Basic Theme of Our Business Strategy One for All, All for One Realization of growth through creativity Build a framework for growth that is not overly reliant on the growth of markets Use extensive measures for expansion outside Japan Use the group s resources effectively to develop products faster and make the product lineup even more competitive Enlarge and upgrade the product lineup Achievement of a lean business structure Establish a culture of taking on challenges and develop the skills of employees Make more improvements with development and manufacturing processes Make organizational changes aimed at maximizing corporate value Maximize earnings by implementing comprehensive cost reductions 9

11 Machinery Business Strategic Objectives Machinery Grow faster worldwide and strengthen product development activities Japan: Become more competitive Asia: Focus on growth in China and India Americas: Priorities are building ties with new customers and selling new products Europe: Strengthen marketing capabilities in European and Middle Eastern countries with many generic drug manufacturers (the Smiley Area ) Industrial machinery: Supply more food/health-sector machinery and machinery for battery manufacturers Development: Create products that match customers needs and speed up development activities Manufacturing: Enlarge the Freund-Vector factory and consider starting the production of parts outside Japan FY 2/14 Plan for FY 2/ billion 14.2 billion New businesses Overseas Pharmaceutical machinery in Japan Overseas Pharmaceutical machinery in Japan Industrial machinery Industrial machinery 10

12 Chemical and Food Business Strategic Objectives Chemical and Food Pharmaceutical excipients: Nutritional supplements: Food preservatives: Development: Manufacturing: Introduce more new products and make current products more competitive Target opportunities involving both new and generic drugs Capture more orders for current products and start new businesses Enlarge the product lineup and reinforce sales activities Move faster with the goal of at least one new product every year Cut costs by consolidating production facilities and using production lines for many products FY2/14 Plan for FY2/ billion 8.8 billion New businesses New food products Pharmaceutical excipients New food products Pharmaceutical excipients Food preservatives Food preservatives 11

13 Highlights of FY2/15 (1) Major activities in overseas markets The rapid growth of emerging countries Pharmaceutical sales ranking (Source: IMS Health) forecast 1 USA USA USA 2 Japan Japan China 3 Germany China Japan 4 France Germany Brazil 5 Italy France Germany 6 UK Brazil France 7 Spain Italy Italy 8 Canada Spain India 9 China Canada Russia 10 Brazil UK Canada Areas targeted for growth Smiley Area Expansion of Freund-Vector Corp. factory Started selling the products of Freund-Turbo Corp. Operations started at the Milan demonstration center and laboratory (Nov. 2014) Sales activities in China centered on operations of Japanese companies Looking for new sales agents in South Korea Company s president acting as a primal sales person to expand the market in Brazil Joint sales activities with the sales agent in India Received orders for manufacturing equipment from companies in India 12

14 Highlights of FY2/15 (2) Measures for new product development and a lean business structure Developed a concept model of the Granuformer continuous granulating device Started sales of a high-speed granulation model of the FLOW COATER fluid bed granulation drying and coating device Developed new products in the industrial machinery category to pursue opportunities in new business fields Freund-Turbo opened its Shinagawa Sales Office in Tokyo Started sales of Granutol F (Fine) Completed the centralization of food preservative production base at Hamamatsu 13

15 Medium-term Plan Progress Report (Orders and new product development) Performance (Millions of yen) (1) Orders (2) New products The high-speed granulation FLOW COATER, a fluid bed granulation drying and coating device Granuformer, continuous granulating device Europe and others Europe and others Americas Americas Asia Asia Japan Japan Uses a new granulation process Optimizes agitation and mixing performance Big reduction in length of spraying process V-Turbo Granulator The first continuous granulating device developed in Japan A spiral dryer makes it possible to perform continuous granulation Contributes to higher quality and productivity when manufacturing pharmaceuticals FY2/14 FY2/15 This unit pulverizes materials by using air currents generated by the high-speed granulation disk and the impact of the materials on the surfaces between the liners. The speed of the internal sieving rotor can be adjusted to produce particles of the desired size. Circulating and pulverizing while mixing with air lowers heat generated by granulation, enabling this unit to be used to granulize heat-sensitive materials used in food and other products. 14

16 Medium-term Plan Progress Report (Effective use of group resources) Collaboration for products Development Sales HICOATER FZ Cuts production time by 30% GRANUREX F F / F-V SPHEREX F F / F-V Compu 4 (control system) F-V F / F-V FLOW COATER 12bar F-V F / F-V Turbo screener F.T F.T / F-V F: Freund Corporation F-V: Freund-Vector Corporation F.T: Freund-Turbo Corporation FLOW COATER 12 Bar Fluid bed granulation dryer with no explosion release outlet This unit is capable of containing very high pressures even in the unlikely event of an explosion. Prior models required an explosion release outlet in accordance with labor health and safety regulations. Freund has delivered to a major pharmaceutical company Japan s first granulation and drying unit approved by the Ministry of Health, Labour and Welfare to have no explosion release outlet. Turbo Screener This unit sorts particulate materials with high efficiency. GRANUREX Capable of precisely coating particles and powders, this unit is ideal for the production of DDS pharmaceuticals. 15

17 Priorities of the fiscal year ending in February 2016 Expand activities to capture more orders outside Japan Increase measures to combine technologies of the Freund Group Launch new products and enlarge the product lineup Seek more synergies with the industrial machinery business Start full-scale operation of a maintenance business Strengthen activities for selling pharmaceutical excipients to generic drug makers Optimize production lines for food preservatives 16

18 III. Financial Summary for FY2/15 17

19 Financial Highlights Sales down 1% due to lower sales in some industrial machinery categories Cost reductions raised gross profit but operating income was down because of higher SG&A expenses FY 2/14 FY 2/15 YoY change Results Results Amount % Net sales 17,616 17,424 (192) (1.1) Operating income 1,286 1,150 (136) (10.6) Ordinary income 1,341 1,249 (92) (6.9) Net income (91) (11.7) Earnings per share (yen) (10.65) Capital expenditure Depreciation R&D expenses (Millions of yen) 18

20 Trends in Machinery Business Segment Pharmaceutical machinery orders were higher in Japan and Asia Operating income down as pharmaceutical machinery sector strength did not offset weakness in the industrial machinery sector FY 2/14 FY 2/15 (Millions of yen) Amount YoY change (%) Amount YoY change (%) Orders received 10, % 12, % Order backlog 4,991 (5.2)% 6, % Net sales 11, % 10,941 (0.6)% Pharmaceutical machinery 9, % 9, % Industrial machinery 1,267 (23.9)% 996 (21.3)% Segment profit 1, % 1,108 (10.8)% Yen/dollar rate (+ is yen depreciation)

21 Machinery Business: Orders Received and Order Backlog (Millions of yen) A consistently high order backlog 8,000 7,000 6,000 Order backlog 5,000 4,000 3,000 2,000 1,000 Orders received 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 2/12 FY 2/13 FY 2/14 FY 2/15 20

22 Machinery Business: Group Company Performance Freund-Vector performance did not meet the targets because of weak U.S. market conditions There was a delay in the recovery of the industrial machinery market FY2/14 FY2/15 Amount YoY change Amount YoY change Net sales 11, % 10,941 (0.6)% Freund Corporation 7, % 6,887 (2.7)% Freund-Vector Corporation 3, % 3, % Freund-Turbo Corporation 782 (23.5)% % Operating income 1, % 1,108 (10.8)% Major subsidiaries Freund-Vector Corporation % % Freund-Turbo Corporation (8) - (12) - Sales by geographic region (Millions of yen) Japan 6, % 6,638 (0.2)% North/Latin America 2, % 2,664 (7.6)% Europe/Africa 702 (8.7)% 440 (37.3)% Middle East/Asia/Oceania 766 (23.6)% 1, % 21

23 Trends in Chemical and Food Business Production cuts for some excipients but higher excipient sales for generic drugs New food product sales down due to production cuts by some users FY2/14 FY2/15 (Millions of yen) Amount YoY change Amount YoY change Net sales 6, % 6,482 (2.0)% Pharmaceutical excipients 1,971 (3.4)% 2, % Food preservatives 1, % 1, % Supplements and other new products 2, % 2,394 (12.1)% Segment profit 379 (32.9)% % Yen/euro rate (+ is yen depreciation)

24 Chemical and Food Business: Group Company Performance Absorbed Freund Kasei in association with centralization of production lines in Hamamatsu Loss at Freund Pharmatec because of the weaker yen and R&D expenses FY2/14 FY2/15 Amount YoY change Amount YoY change Net sales 6, % 6,482 (2.0)% Freund Corporation 6, % 6,476 (2.1)% Freund Kasei 1, % - - Freund Pharmatec (Export sales) 31 (52.3)% % Operating income 379 (32.9)% % Major subsidiaries (Millions of yen) Freund Kasei Freund Pharmatec (188) (40.3)% (190) (1.1)% Note: Freund Kasei merged with Freund on March 1,

25 Summary of Statement of Income (Millions of yen) FY2/14 FY2/15 YoY change Amount Share(%) Amount Share(%) Amount % Net sales 17, , (192) (1.1) Cost of sales 12, , (399) (3.2) Gross profit 5, , SG&A expenses 3, , Operating income 1, , (136) (10.6) Non-operating income (expenses) Ordinary income 1, , (92) (6.9) Extraordinary income (losses) Income before income taxes and minority interests (18) (0.1) , , (70) (5.3) Net income (91) (11.7) Non-operating income (expenses) Non-operating income Non-operating expenses 5 7 Extraordinary income (losses) Extraordinary losses

26 Changes in Operating Income Operating income benefited from higher sales of pharmaceutical machinery in Japan, but this was offset by growth in R&D expenses, depreciation and other SG&A expenses. Positive factors 1,286 Higher gross profit +207 Depreciation under SG&A expenses +12 R&D expenses (128) Costs for the 50 th anniversary (107) Other expenses, etc. (120) 1,150 ~ FY2/14 (Millions of yen) ~ FY2/15 25

27 Summary of Balance Sheet (Millions of yen) Feb. 28, 2014 Feb. 28, 2015 Change Current assets 11,331 12,782 +1,451 Cash and deposits 4,600 4, Accounts receivable*1 4,409 5, Inventories 1,675 1, Non-current assets 4,219 4, Property, plant and equipment 3,052 3, Intangible assets (32) Investments and other assets (44) Total assets 15,550 17,277 +1,727 Merchandise and finished goods +94 Work in process (5) Raw materials and supplies +7 Construction in progress +284 Current liabilities 4,402 5,427 +1,025 Accounts payable*1 2,386 2, Advances received 926 1, Non-current liabilities (85) Net defined benefit liability* Negative goodwill (7) Total liabilities 5,157 6, Total net assets 10,392 11, Net income 695 Equity ratio 65.8% 63.6% *1: Includes electronically recorded monetary claims and obligations - operating *2: Provision for retirement benefits as of February 28,

28 Summary of Statement of Cash Flows (Millions of yen) FY2/14 FY2/15 Cash flows from operating activities 1, Income before income taxes and minority interests 1,323 1,253 Depreciation Foreign exchange losses (gains) (23) (44) Decrease (increase) in notes and accounts receivable-trade 453 (781) Decrease (increase) in inventories Increase (decrease) in advances received (447) 252 Increase (decrease) in notes and accounts payable-trade (113) 345 Income taxes paid and others (748) (358) Cash flows from investing activities (423) (240) Purchase of property, plant and equipment (264) (453) Cash flows from financing activities (226) (284) Net increase (decrease) in interest-bearing debt (59) (63) Cash dividends paid (172) (215) Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at end of period 4,107 4,548 27

29 IV. Earnings Forecasts for FY2/16 28

30 Forecast for FY2/16 Forecast recoveries in sales and earnings as growth in the machinery business outweighs a decline in the chemical and food business FY2/15 FY2/16 (Forecast) YoY change (Millions of yen) (Millions of yen) (Millions of yen) % Net sales 17,424 18,500 +1, Operating income 1,150 1, Ordinary income 1,249 1, Net income Earnings per share (yen) Capital expenditure Depreciation R&D expenses

31 Segment Forecasts In the machinery business, planning on double-digit sales growth in Japan and Asia In the chemical & food business, expect a continuation of production cuts at some users to affect new food products (Millions of yen) FY2/15 FY2/16 (Forecast) YoY change (Millions of Amount Share(%) Amount Share(%) % yen) Consolidated sales 17, , , Machinery 10, , , Chemical & Food 6, , (982) (15.1) Segment profit 1, , Machinery 1, NA Chemical & Food NA Elimination or corporate (432) (37.6) NA Yen/dollar rate (+ is yen appreciation)

32 Shareholder Returns Maximizing shareholder value is the highest priority of the Freund. The policy is to use the benefits of higher shareholder value for earnings distributions to shareholders while retaining earnings for making the company stronger in order to adapt swiftly and properly to changes in the operating environment. The basic policy for the distribution of earnings is to make distributions based on results of operations. The target for the annual consolidated dividend payout ratio is 30%. We seek to maintain a stable distribution while taking into account the need for retained earnings in order to build a stronger base of operations and take actions aimed at growth. Plan to pay a dividend of 25 yen per share for the fiscal year ending on February 29,

33 (Supplementary Materials ) 1. Company Overview 2. Segment Information 3. Quarterly Performance 4. Financial Summary 32

34 Company Overview Company name Established Representative Location Paid-in capital Sales : Freund Corporation : April 1964 : Iwao Fusejima, President & COO : Okubo, Shinjuku-ku, Tokyo, Japan : 1,035,600,000 yen (As of February 28, 2015) : 17,420 million yen (Fiscal year ended February 2015, consolidated) Number of employees : 370 (As of February 28, 2015, consolidated) Business Subsidiaries : Machinery business- Manufacturing and sales of granulation and coating equipment and others Chemical & food business- Manufacturing and sales of pharmaceutical excipients, food preservatives, and others : Freund-Vector Corporation, Freund Pharmatec Ltd., Freund-Turbo Corporation 33

35 The Freund Group Research and Development Laboratories Using innovative technologies for rapid growth outside Japan Development of pharmaceutical formulation technologies Freund Pharmatec Ltd. Freund-Turbo Corporation Freund Pharmatec Ltd. Overseas users Sales of machinery 機械装置の販売 Sales of chemical and food products Freund-Turbo Corporation Manufacture and sales of powder processing equipment Domestic users Freund Corporation Technological Import alliance Freund-Vector Corporation Freund-Vector Corporation Sales of machinery Sales of chemical and food products Overseas manufacturers 34

36 Market Outlook for the Sixth Medium-term Management Plan Pharmaceutical markets are growing rapidly in emerging countries (Forecast for regional pharmaceutical market share) 2012 $965 billion 2017 Outlook $1,170-1,200 billion Composition of growth in sales $ billion USA EU5 Japan 16% 3% 6% China 34% 31% 34% 33% 31% Others 41% 8% 12% 15% 15% 9% 13% 米国 USA EU5 EU5 日本 Japan 中国 China その他 Others Source: IMS Market Prognosis, September

37 Machinery Main Products are Granulating and Coating Equipment for Pharmaceutical Companies In the machinery business, pharmaceutical machinery is 91% of sales and industrial machinery is 9%. Granulating and coating equipment for pharmaceutical companies are the core products. Industrial machinery is another important part of this business. Sales Composition (FY2/15) Seamless mini-capsule device (SPHEREX ) Industrial machinery 9% FY2/15 Sales 10,941 million Automated tablet coating device (HICOATER FZ) Resistant fluid bed granulation device (FLOW COATER) Pharmaceutical 91% 36

38 Machinery Freund Corporation Pharmaceutical machinery is the main source of growth. Orders for pharmaceutical machinery are strong in Japan and Asia. Net Sales by Region Export 9% FY2/15 6,887 million (Millions of yen) (Millions of yen) (Millions of yen) Japan 91% Orders Orders Order backlog Sales FY2/11 FY2/12 FY2/13 FY2/14 FY2/15 FY2/11 FY2/12 FY2/13 FY2/14 FY2/15 37

39 Machinery Freund-Vector Corporation Expanded the factory Operations started as planned at the Milan Demonstration Center Laboratory in November 2014 High-profile promotional activities at the ACHEMA process industries world forum in Germany in June 2014 Net Sales by Region Europe, etc. 30% FY12/15 $37 million USA 39% (M$) (M$) (M$) Latin America/Canada 32% Orders Order backlog Sales Orders FY2/10 FY2/11 FY2/12 FY2/13 FY2/14 FY2/10 FY2/11 FY2/12 FY2/13 FY2/14 38

40 Chemical & Food A Growing Product Lineup for the Healthcare Sector About one-third of sales is pharmaceutical excipients, food preservatives, nutritional supplements and other products made for other companies Sales of pharmaceutical excipients for generic drugs continue to increase Strong orders for the manufacture of nutritional supplements for other companies Pharmaceutical excipients Directly compressible mannitol/lactose Spherical granules Adsorbent/solidified agents/fluidized agents White coloring agents Lubricant agents Luster agents Excipients Food preservatives Food excipients Food quality preserving agents Nutritional supplements/others Seamless mini capsule AQ shelax (aqueous liquid) Supplements Coenzyme Q10 (40% water-dispersible powder) 39

41 Chemical & Food Chemical & Food Business Performance Strong sales of pharmaceutical excipients to manufacturers of generic drugs Launched new food preservative products Sales Composition Sales (Millions of yen) Supplements and other new products 37% Pharmaceutical excipients 33% FY2/15 Sales 6,482 million Food preservatives 30% FY2/11 FY2/12 FY2/13 FY2/14 FY2/15 40

42 R&D Leveraging the Group s Strengths to Develop New Products Faster Aiming for quick practical applications for fine particle-dds drug formulation technologies Benefiting from the greatest possible amount of synergies with Freund-Vector Utilize the mutually complementary technologies of Freund and Freund-Turbo & Freund Pharmatec Freund-Vector Freund-Turbo & Currently developing in Europe DDS drug formulation technologies by using spherical particles, which have a relatively small surface area and allow easy control of membrane thickness, and the seamless mini-capsule technology, an exclusive technique created by Freund Pharmatec. Approved for Good Manufacturing Practice (GMP) in July Sharing information on a global scale to be the first to identify market needs. Speeding up the development of new products by combining Freund s development skills with the design and manufacturing skills of Freund- Vector. Granulating and coating technologies and Freund-Turbo s milling and sieving technologies mutually complement each other as powder processing technologies. And by fusing these two technologies, a wide range of applications in the realm of powder processing technology can be provided. Note: DDS (Drug Delivery System) 41

43 R&D Creating Innovative Products for 50 Years Machinery Chemical & Food 1964 Automatic film coating device Film coating liquid 1965 HPC, HPS 1966 Perfiller -101, Lubriwax CMEC 1969 Fluid bed granulation coating device FLOW COATER 1970 Dry process granulation device ROLLER COMPACTOR 1971 Automatic sugar/film coating device HICOATER 1972 Food preservative for strawberries Antimold Centrifugal fluid coating granulation device CF-Granulator Pharmaceutical excipient Dilactose 1978 Food preservative Antimold Hybrid fluid bed granulation coating device SPIR-A-FLOW Pharmaceutical excipient NONPAREIL Pharmaceutical excipient NONPAREIL Water activity measurement device 1987 Multi-functional food preservative Negamold 1988 Aqueous coating device AQUA COATER Nutritional supplement Active Gingko Leaf Extract 1990 Pharmaceutical production process automatic control system Phamatronics 1991 Seamless mini-capsule device SPHEREX Pharmaceutical excipient NONPAREIL Particle form measurement device Granutronics 2000 Centrifugal rolling granulation coating device GRANUREX 2001 Rotary-type fluid bed granulation dryer TECTRANSOR 2002 Sustained ethanol evaporation food preservative Antimold Tender 2003 Food coating base AQ shelax, food additive Perfiller Twin screw drying granulator ROLLER COMPACTOR Automatic anti-mold detector Antimold Detector 2006 Fully automatic coating system for food and nutritional supplements HICOATER FPC 2008 Development of chitosan coating technology Automatic tablet coating device HICOATER FZ 2009 Fluid bed granulation coating device FLOW COATER Universal Powder and granular material transportation container washing device Container Washing Device 2010 High-speed agitation granulation device GRANUMEIST Pharmaceutical excipient Granutol Pharmaceutical excipient NONPAREIL -108, pharmaceutical excipient Polishing Wax-105 Food additive Polishing Wax-104 Wet/dry process granulator Millmeist Food additive FOODSGURD 2012 Food preservatives Negamold Natural, Light 2013 Food additives Maltitol Granule, Isomalt Granule Direct compressible lactose Dilactose F (Fine) 2014 Tablet printer TABREX 42

44 Quarterly Performance (Millions of yen) FY2/13 FY2/14 FY2/15 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Machinery orders 2,699 1,998 2,002 2,572 3,026 2,491 2,696 1,853 3,648 2,549 3,016 3,192 Machinery order backlog 5,260 4,938 4,883 5,263 5,440 5,328 6,144 4,991 6,945 7,235 7,225 6,678 Consolidated sales 4,728 3,950 3,886 3,830 4,656 4,224 3,545 5,189 3,506 3,864 4,641 5,413 Machinery 3,240 2,376 2,078 2,219 3,048 2,684 1,933 3,337 1,794 2,249 3,106 3,792 Chemical & Food 1,487 1,574 1,808 1,611 1,608 1,540 1,611 1,851 1,711 1,617 1, Consolidated segment profit (20) Machinery Chemical & Food Elimination or corporate (68) (66) (69) (65) (97) (74) (78) (85) (149) (68) (132) (83) Yen/dollar rate Note: Yen/dollar rates are the averages for calendar year quarters. 43

45 Inquiries: Freund Corporation Public Relations / Investor Relations Office, Corporate Administration Division Tel: Fax: ir@freund.co.jp IR website: http: // This presentation contains forward-looking statements involving plans, outlooks, strategies and policies. These statements reflect the judgments of management and assumptions based on information available at the time of this presentation. Actual results of operations may differ from these statements for a number of reasons. Consequently, forecasts and other forward-looking statements are not guarantees about future performance. Although Freund has checked this presentation carefully, there is still a possibility of errors in this information. 44