Freund : Results of Operations for the First Half of the Fiscal Year Ending February 29, 2024

FREUND CORPORATION

(Securities code: 6312)

Results of Operations for the First Half of the Fiscal Year Ending February 29, 2024

Copyright(C) 2023 Freund Corp. All rights reserved.

Contents

 Consolidated Financial Summary for 1H of FY2/24

・・・ P.02

• Consolidated Earnings and Dividend Forecasts for FY2/24

	・・・ P.16
 Topics	・・・ P.19

Supplementary Materials	・・・ P.21
Fact Sheet	・・・ Appendix

Copyright (C) 2022 Freund Corp. All rights reserved.

1

Consolidated Financial Summary for 1H of FY2/24

Copyright(C) 2023 Freund Corp. All rights reserved.

Consolidated Financial Summary

Net sales

• In the machinery business, sales in U.S. subsidiary Freund‐Vector, which had been sluggish in the previous fiscal year, recovered.
• The chemicals business maintained a strong performance both in pharmaceutical excipients and food preservatives.

Profit

• There was an operating profit in the first half, returning to profitability from the loss recorded one year earlier.
• The return to profitability was attributable mainly to the strong performance of the chemicals business and the earnings recovery of Freund‐Vector.

(Millions of yen)

FY2/23 1H

FY2/24 1H

YoY change

％

Net sales	8,534	9,583	1,049	12.3%
Operating profit	(67)	177	245	－
Ordinary profit	32	195	163	499.9%
Profit	(17)	115	132	－
Earnings per share (yen)	(1.02)	6.91	7.93	－
Depreciation	275	262	(13)	(4.8)%
R&D expenses	301	325	24	8.2%

Copyright (C) 2023 Freund Corp. All rights reserved.

3

Machinery Business: Overview

Net sales

• In Japan, first half sales decreased because most FY2/24 major orders will generate sales during the second half.
• ln other countries, Freund‐Vector has consistently ramped up shipments, including those carried over from the previous fiscal year. Higher sales has compensated for the decline in domestic sales.

Operating profit

• The machinery business returned to profitability as a result of the Freund‐Vector's recovery after being in the red in the previous fiscal year.

Orders received and order backlog

• Orders received remained strong, driven by the substantial investments in large‐scale equipment by generic drug manufacturers in Japan.
• The order backlog increased significantly to a record‐high.

(Millions of yen)	FY2/23	FY2/24	YoY change
	1H	1H
			％
Net sales	5,420	6,246	825		15.2%
Operating profit	(268)	45	313		－
Orders received	8,409	9,246	837		10.0%
Order backlog	14,275	16,179	1,903		13.3%

Copyright (C) 2023 Freund Corp. All rights reserved.

4

Machinery Business: Group Company Performance (Sales/Operating Profit)

Freund Corporation

Freund‐Turbo

Freund‐Vector

Cos.Mec

• Sales decreased primarily due to the prolonged procurement of some parts in Japan.
• Profit improved partly because of strong sales of parts and maintenance services.
• Became profitable after a loss one year earlier due to the receipt of large orders.
• In the previous fiscal year, the company faced challenges, including delivery delays of components and materials, shipping delays, and declining profitability due to soaring raw material prices. However, in the current fiscal year, the company achieved profitability once again, thanks to improved profitability and steady completion of projects carried over from the previous fiscal year.
• With major projects concentrated in the second half, the first half was challenging but showed signs of improvement.

(Millions of yen)	FY2/23	FY2/24	YoY change
Before elimination for consolidation	1H	1H			％
Net sales	5,420	6,246	825		15.2%
Freund Corporation	2,468	2,116	(351)		(14.2)%
Freund‐Turbo	739	878	139		18.8%
Freund‐Vector	2,165	3,033	868		40.1%
Cos.Mec	439	412	(27)		(6.2)%
Operating profit	(268)	45	313		―
Freund Corporation	62	64	1		3.0%
Freund‐Turbo	(17)	38	55		―
Freund‐Vector	(252)	26	278		―
Cos.Mec	(27)	(95)	(67)		―
		Copyright (C) 2023 Freund Corp. All rights reserved.	5

Machinery Business: Group Company Performance (Orders Received/Order Backlog)

Freund	Many investments in large‐scale facilities by generic drug manufacturers in Japan
Corporation	accounted for a large share of orders. The order backlog increased to a record high.
Freund‐Turbo	First half orders were lower than one year earlier when there were several large orders.
	The order backlog decreased as products were delivered to customers.
Freund‐Vector	A significant downturn in orders because large orders expected in the first half were
	delayed.
Cos.Mec	Orders increased significantly from one year earlier and the order backlog remained at
	the level higher than one year earlier.

(Millions of yen)	FY2/23	FY2/24	YoY change
Before elimination for consolidation	1H	1H		％
Orders received	8,409	9,246	837	10.0%
Freund Corporation	5,294	6,264	970	18.3%
Freund‐Turbo	908	647	(261)	(28.7)%
Freund‐Vector	1,993	1,684	(309)	(15.5)%
Cos.Mec	349	689	340	97.5%
Order backlog	14,275	16,179	1,903	13.3%
Freund Corporation	8,005	12,157	4,152	51.9%
Freund‐Turbo	969	699	(270)	(27.9)%
Freund‐Vector	4,248	2,022	(2,226)	(52.4)%
Cos.Mec	1,176	1,414	237	20.2%
		Copyright (C) 2023 Freund Corp. All rights reserved.	6

Machinery Business: Sales by Region

Japan  Sales decreased because there are still delays in procuring certain parts and many major orders will generate sales in the second half.

• Sales ratio of in Japan decreased to 40% because of the sales recovery at the U.S. subsidiary.

Overseas  U.S. and Latin American sales growth at Freund‐Vector made a big contribution to overseas sales growth.

• The overseas sales ratio of the machinery business surged to 60%, driven by the depreciation of the yen.

						Others
			Others			181
	Asia		56		Europe	Asia 3%
		1%		427
	1,119			390	7%
	21%			6%		Japan
Europe			Japan		FY2/24 1H	2,476
	FY2/23 1H		40%
275			2,574	Latin
5%		¥5,420 million	48%	¥6,246 million
Latin	America
				1,641
America				26%
	717
Overseas	13%		USA		Overseas	USA
2,846			677		3,770	1,129
		12%		18%
53％				60％

Copyright (C) 2023 Freund Corp. All rights reserved.

7

Machinery Business: Quarterly Results

Net sales		Operating
(Millions of yen)
				profit margin
6,000			20%
		Net sales（left axis）		Operating profit margin（right axis）

5,000						15%
						10%
4,000						5%
3,000						0%
2,000						‐5%
						‐10%
1,000						‐15%
0						‐20%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY2/19	FY2/20	FY2/21	FY2/22	FY2/23	FY2/24
			Copyright (C) 2023 Freund Corp. All rights reserved.	8

Machinery Business: Quarterly Results (Net Sales/Orders Received/Order Backlog)

(Millions of yen)

(Millions of yen)

18,000	Order backlog (left axis)					6,000
16,000	Net sales (right axis)
	Orders received (right axis)					5,000
14,000
12,000							4,000
10,000
							3,000
8,000
6,000							2,000
4,000
							1,000
2,000
0							0
	1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
	FY2/19	FY2/20	FY2/21	FY2/22	FY2/23	FY2/24
				Copyright (C) 2023 Freund Corp. All rights reserved.	9