i. financial summary for 1h fy2/16 - · pdf file1 i. financial summary for 1h fy2/16 p2 ii....

Selected by the Japanese Ministry of Economy, Trade and Industry as a Global Niche Top 100 Company

Results of Operations for the First Half of the Fiscal Year Ending February 29, 2016 (FY2/16)

(Securities code: 6312)

October 15, 2015

1

I. Financial Summary for 1H FY2/16 P2

II. Major Initiatives P15

III. Earnings and Dividend Forecasts for FY2/16 P25

< Supplementary Materials > P29

Table of Contents

2

I. Financial Summary for 1H FY2/16

3

Sales and earnings increased due to strong sales of machinery to generic drug manufacturers

1H FY2/15 1H FY2/16 YoY change

Results Results Initial plan Amount %

Net sales 7,371 7,697 7,000 +325 +4.4

Operating income 101 198 250 +97 +96.8

Ordinary income 141 252 260 +111 +78.8

Net income 36 123 135 +87 +242.4

Earnings per share (yen) 4.19 14.34 15.66 +10.15

Capital expenditure 143 83 -

Depreciation 153 163 -

R&D expenses 299 275 -

Financial Highlights

(Millions of yen)

4

0

1,000

2,000

3,000

4,000

5,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

Machinery sales

Total orders received

Chemical and food sales

Quarterly Orders and Sales O

rders received

Co

nso

lidated

sales

(Millions of yen) (Millions of yen) Total orders received were strong mainly because of growth in machinery orders

FY2/13 FY2/14 FY2/15 FY2/16

5

Machinery Business: Overview

Orders remain high because of the large volume of capital expenditures in the generic drug industry.

Double-digit operating income growth backed by strong sales of pharmaceutical and industrial machinery

1H FY2/15 1H FY2/16

Amount YoY change (%) Amount YoY change (%)

Orders received 6,198 +12.3 6,733 +8.6

Order backlog 7,235 +35.8 8,676 +19.9

Net sales 4,043 (29.5) 4,992 +23.5

Pharmaceutical machinery 3,635 (27.6) 4,535 +24.7

Industrial machinery 408 (42.7) 457 +12.0

Operating income 125 (83.5) 152 +21.6

Yen/dollar rate (+ is yen depreciation)

102.4 +6.7 yen/dollar 120.3 +17.9 yen/dollar

(Millions of yen)

6

0

1,000

2,000

3,000

4,000

5,000

6,000

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

Machinery sales

Machinery orders received

FY2/12 FY2/13 FY2/14 FY2/15

(Millions of yen) Large volume of machinery orders

FY2/16

Machinery Business: Quarterly Orders

7

0

2,000

4,000

6,000

8,000

10,000

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

Order backlog

FY2/12 FY2/13 FY2/14 FY2/15 FY2/16

60%

33%

7%

Note: Before consolidation adjustments

74%

22%

4%

(As of August 31, 2015)

¥8.67 billion Freund Corporation

Freund-Vector

Freund-Turbo

Machinery Business: Order Backlog (As of February 28, 2015)

¥6.68 billion

(Millions of yen)

8

1H FY2/15 1H FY2/16


Net sales 4,043 (29.5) 4,992 +23.5

Freund Corporation 2,777 (38.0) 3,529 +27.1

Freund-Vector Corporation 1,309 +3.7 1,241 (5.2)

Freund-Turbo Corporation 417 (7.5) 398 (4.6)


Major subsidiaries

Freund-Vector Corporation 5 (77.2) (100) -

Freund-Turbo Corporation (22) - (28) -

Sales by geographic region

Japan 2,583 (37.7) 3,391 +31.3

North/South America 1,036 +20.4 807 (22.1)

Europe/Africa 99 (82.1) 328 +228.9

Middle East/Asia/Oceania 323 +86.7 465 +43.7

(Millions of yen)

Higher sales to pharmaceutical companies in Japan

A strong performance in Europe but an operating loss at Freund-Vector because the majority of North and South American sales are in the second half of the fiscal year

Machinery Business: Group Company Performance

9

Chemical and Food Business: Overview

(Millions of yen)

New food product sales were down sharply due to production cuts by some customers

An improvement in the product mix and cost cutting were responsible for the increase in

operating income

1H FY2/15 1H FY2/16


Net sales 3,328 +5.7 2,704 (18.7)

Pharmaceutical excipients 1,071 +9.5 994 (7.2)

Food preservatives 935 +3.8 956 +2.2

New food products 1,320 +4.2 753 (42.9)

(Export sales) 40 +263.6 52 +29.1


Freund Pharmatec (92) - (80) -

Yen/euro rate (+ is yen depreciation)

140.4 +14.8 yen/euro 134.1 (6.3) yen/euro

Note: The health food and others segment renamed new food products.

10

0

50

100

150

200

250

300

0

500

1,000

1,500

2,000

2,500

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

Operating income

Net sales

Chemical and Food Business: Quarterly Trends

Sales were down from one year earlier because of lower new food product sales but

operating income was higher.

(Millions of yen) (Millions of yen)

11

Summary of Statement of Income

(Millions of yen)

1H FY2/15 1H FY2/16 YoY change

Amount Share (%) Amount Share (%) Amount %

Net sales 7,371 100.0 7,697 100.0 +325 +4.4

Cost of sales 5,201 70.6 5,266 68.4 +65 +1.3

Gross profit 2,170 29.4 2,431 31.6 +260 +12.0

SG&A expenses 2,069 28.1 2,232 29.0 +162 +7.9

Operating income 101 1.4 198 2.6 +97 +96.8

Non-operating income (expenses)

40 0.5 53 0.7 +13 +33.3

Ordinary income 141 1.9 252 3.3 +111 +78.8

Extraordinary income (losses)

(0) 0.0 (2) 0.0 (2) -

Income before income taxes and minority interests

140 1.9 249 3.2 +109 +77.4

Net income 36 0.5 123 1.6 +87 +242.4

Non-operating income (expenses) • Non-operating income

44→55 • Non-operating expenses

4 → 2

12

Change in Operating Income

(Millions of yen)

1H FY2/15

Advertising expenses

1H FY2/16

+260

Higher gross profit

Growth in sales offset the increase in fixed expenses and other negative factors

Po

sitive factors

Other SG&A expenses

Personnel expenses

+31

R&D expenses

+24

(129)

(89)

101

198

13

Summary of Balance Sheet (Millions of yen)

Feb. 28, 2015 Aug. 31, 2015 Change

Current assets 12,782 12,910 +128

Cash and deposits 4,870 4,640 (229)

Accounts receivable*1 5,272 4,533 (738)

Inventories 1,771 2,880 +1,108

Non-current assets 4,495 4,452 (43)

Property, plant and equipment 3,403 3,300 (103)

Intangible assets 146 216 +69

Investments and other assets 944 935 (9)

Total assets 17,277 17,362 +85

Current liabilities 5,427 5,881 +454

Accounts payable*1 2,786 2,922 +135

Advances received 1,242 1,978 +736

Non-current liabilities 669 630 (39)

Net defined benefit liability 187 179 (8)

Negative goodwill 18 14 (3)

Total liabilities 6,097 6,512 +414

Total net assets 11,180 10,850 (329)

*1: Includes electronically recorded monetary claims-operating and obligations-operating

Inventories +¥1,108 million

• Merchandise and finished goods +120

• Work in process +1,034

• Raw materials and supplies (46)

Total net assets ¥10,850 million

• Net income +123 Equity ratio 63.6%→62.5%

14

Summary of Statement of Cash Flows

1H FY2/15 1H FY2/16

Cash flows from operating activities (645) 472

Income before income taxes and minority interests 140 249

Depreciation 153 163

Decrease (increase) in notes and accounts receivable-trade (112) 743

Decrease (increase) in inventories (657) (1,045)

Increase (decrease) in advances received 344 716

Increase (decrease) in notes and accounts payable-trade (56) 165

Income taxes paid (164) (313)

Cash flows from investing activities (108) (278)

Purchase of property, plant and equipment (111) (160)

Cash flows from financing activities (253) (299)

Net increase (decrease) in interest-bearing debt - -

Cash dividends paid (215) (257)

Net increase (decrease) in cash and cash equivalents (1,027) (99)

Cash and cash equivalents at end of period 3,079 4,448

(Millions of yen)

15

II. Major Initiatives

16

The Sixth Medium-term Management Plan

Medium to long-term targets

Operating margin 10%

ROE 8% or more

Change & Challenge for a second founding to become

a 100-year company.

Overseas sales ratio 40%

17

Targets for FY2/17


Op

erating in

com

e

Net sales

Net sales: ¥23.0 billion Operating income: ¥2.3 billion (Foreign exchange rate assumptions: 1 USD=¥100 1 EURO=¥145)

FY2/17 Targets

1st Medium-term Management Plan

2nd Medium-term Management Plan

3rd Medium-term Management Plan

4th Medium-term Management Plan


Taking on the Challenge of Globalization

Business Restructuring

and Establishment of Strategic Objectives

Expansion of Scale, Improvement of Operations and Management

Yusho 21 Plan

Gaining Superiority over Competitors

through the Dynamism

of Our Group


Realization of Growth through Creativity and the Achievement of a

Lean Business Structure

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

18

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 make full-scale enter into the

battery-sector machinery 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

Machinery

FY2/14

Pharmaceutical machinery in Japan

Overseas Pharmaceutical machinery in Japan

Industrial machinery

Overseas

New businesses

Plan for FY2/17

¥11.0 billion ¥14.2 billion

Machinery Business Strategic Objectives

・・・ Grow faster worldwide and strengthen product development activities


19

Pharmaceutical excipients

Food preservatives

New food products


Food preservatives

New food products

New businesses

FY2/14 Plan for FY2/17

¥6.6 billion ¥8.8 billion

Pharmaceutical excipients: Target opportunities involving both new and generic drugs

Nutritional supplements: Capture more orders for current products and start new businesses

Food preservatives: Enlarge the product lineup and reinforce sales activities

Development: Move faster with the goal of at least one new product every year

Manufacturing: Cut costs by consolidating production facilities and using production lines for many products

Chemical and Food

Chemical and Food Business Strategic Objectives

・・・ Introduce more new products and make current products more competitive

20

Priorities of the Fiscal Year Ending in February 2016

Strengthen sales activities for generic drug manufacturers

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

Optimize production lines for food preservatives

21

Progress Report (Generic Drugs)

Japanese government has unexpectedly raised the generic drug utilization rate target from 60% to 80%

Machinery Orders Received

1H FY2/15 1H FY2/16

Orders in Japan

4,361 3,946

Orders from overseas

1,836 2,786

Orders received

6,198 6,733

Sales of pharmaceutical excipients to generic drug manufacturers

(Total of the top 10 companies)

0

50

100

150

200

250

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

FY2/14 1Q=100

FY2/14 FY2/15 FY2/16

22

FLOW COATER 12 Bar Fluid bed granulation dryer with no

explosion release outlet

Development Sales

HICOATER FZ F F / F-V

GRANUREX® F F / F-V

SPHEREX® F F / F-V

Compu 4 (control system) F-V F / F-V

FLOW COATER 12 Bar 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

Turbo Screener

HICOATER FZ

• Cuts production time by 30%

GRANUREX®

Progress Report (Machinery Business)

Effective use of group resources

• 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.

• This unit sorts particulate materials with high efficiency.

• Capable of precisely coating particles and powders, this unit is ideal for the production of DDS pharmaceuticals.

23

Progress Report

V-Turbo® Granulator

• 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.

Granuformer®, continuous granulating device

The high-speed granulation FLOW COATER, a fluid bed granulation drying and coating device

New Products under Development

All-inclusive Containment Laboratory Unit

◎

◎

〇

△

◎: Order received, 〇: In use by customer for evaluations, △: Inquiries received, ×: No inquiries

• Places an agitation and granulation unit, granule size control unit, fluid bed granulation unit, coating unit, pill coating unit and blending unit within a single isolator.

• Performing all processes within a single isolator eliminates the risk of exposure to contaminants during the input and output of materials and cleaning.

• 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.

• Uses a new granulation process • Optimizes agitation and mixing

performance. • Big reduction in length of spraying process.

24

Progress Report (Chemical & Food Business)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

Operating margin is improving steadily

FY2/15 FY2/14 FY2/16

Vertical startup of a new production line at once

0%

20%

40%

60%

80%

100%

May Jun. Jul. Aug. Sep.

Started operations in June

Antimold-Mild® Capacity Utilization

Operating Margin of Chemical & Food Business

25

III. Earnings and Dividend Forecasts for FY2/16

26

Forecast for FY2/16

FY2/15 FY2/16 (Forecast) YoY change

Amount Amount Amount %

Net sales 17,424 18,500 +1,075 +6.2

Operating income 1,150 1,350 +199 +17.4

Ordinary income 1,249 1,370 +120 +9.6

Net income 695 800 +104 +14.9

Earnings per share (yen) 80.72 92.78 +12.06

Capital expenditure 545 600 +55

Depreciation 308 325 +17

R&D expenses 592 600 +8

Forecast recoveries in sales and earnings as growth in the machinery business outweighs a decline in the chemical & food business

No change in the initial plan

(Millions of yen)

27

Segment Forecasts

(Millions of yen)

FY2/15 FY2/16 (Forecast) YoY change

Amount Share (%) Amount Share (%) Amount %

Consolidated sales 17,424 100.0 18,500 100.0 +1,076 +6.2

Machinery 10,941 62.8 13,000 70.3 +2,059 +18.8

Chemical & Food 6,482 37.2 5,500 29.7 (982) (15.1)

Segment profit 1,150 100.0 1,350 100.0 +200 +17.4

Machinery 1,108 96.3 NA - - -

Chemical & Food 474 41.2 NA - - -

Elimination or corporate (432) (37.6) NA - - -

Yen/dollar rate (+ is yen appreciation)

105.8 - 120.0 - +14.2 -

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

28

0.0%

20.0%

40.0%

60.0%

80.0%

0.0

10.0

20.0

30.0

40.0

FY2/07 FY2/08 FY2/09 FY2/10 FY2/11 FY2/12 FY2/13 FY2/14 FY2/15 FY2/16 (fct.)

Dividends and Dividend Payout Ratio

Dividends Dividend payout ratio

Target for the consolidated dividend payout ratio

30%

20%

¥15 ¥15 ¥15 ¥15 ¥15

¥20

¥25

¥25 + Commemorative dividends ¥5

¥10

¥25

Dividend Forecasts

• The basic policy for the distribution of earnings is to make distributions based on results of operations. Based on the progress in enhancing retained earnings in order to build a stronger base of operations and take actions aimed at growth, target for the annual consolidated dividend payout ratio was raised from 20% to 30% in the previous fiscal year.

• Plan to pay a dividend of 25 yen per share for the fiscal year ending on February 29, 2016.

(Yen)

29

(Supplementary Materials )

1. Company Overview 2. Segment Information 3. Quarterly Performance 4. Financial Summary

30

Company Overview

Company name

Established

Representative

Location

Paid-in capital

Sales

Number of employees

Business

Subsidiaries

: Freund Corporation

: April 1964

: Iwao Fusejima, President & CEO

: 1-3-21 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)

: 370 (As of February 28, 2015, consolidated)

: 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

31

The Freund Group

機械装置の販売機械装置の販売化成品の販売

Freund-Turbo Corporation

Freund Pharmatec Ltd.

Freund-Vector Corporation

Research and Development Laboratories Using innovative technologies for rapid

growth outside Japan

Development of pharmaceutical formulation technologies

Manufacture and sales of powder processing

equipment

Import

Technological alliance

Domestic users

Sales of machinery

Sales of chemical and food products


Overseas manufacturers


Freund Pharmatec

Ltd. Overseas users

Sales of machinery Sales of chemical

and food products

Freund Corporation

32

Our “Pen” (Machinery and Equipment) and “Ink” (Pharmaceutical Excipients) Business Model

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.

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.

70%

30%

63% 37%

Machinery Business Segment

Chemical and Food Business Segment

Machinery Chemical & Food

Net sales

Segment profit

Composition of Net Sales

and Profit by Segment

(FY2/15)

Consolidated sales: ¥17,420 million Consolidated operating income: ¥1,150 million

33

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

Granulating Drying, grading Coating Tablet press

Blending, kneading

Milling, sieving Printing

Active pharmaceutical

ingredient

Packing Tablet


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.

Speeding up the development of new products

Granulating equipment Coating equipment

Excipients Film coating liquids

Printing equipment

Ink

+

34

Two Bases for Global Growth

: Locations with service technicians

(North America, South America, Europe/Middle East) (Asia)

25%

Selected by the Japanese Ministry of Economy, Trade and Industry as a Global Niche Top 100 Company

Overseas sales (FY2/15)

Freund Corporation Freund-Vector Corporation

: Demonstration center

35

Market Outlook for the Sixth Medium-term Management Plan

34%

15% 12% 8%

31%

31%

13% 9% 15%

33%

米国ＥＵ5 日本中国その他

2012

$965 billion

2017 Outlook

$230-260 billion

$1,170-1,200 billion

2012 2017 Composition of growth in sales

Source: IMS Market Prognosis, September 2013

Pharmaceutical markets are growing rapidly in emerging countries

Others

China

USA

EU5

Japan

41%

34%

6% 3%

16% (Forecast for regional pharmaceutical market share)

USA EU5 Others China Japan

36

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)

Automated tablet coating device

(HICOATER FZ)

Resistant fluid bed granulation device

(FLOW COATER)

FY2/15 Sales ¥10,941 million

Pharmaceutical 91%


9%

Machinery

Seamless mini-capsule device

(SPHEREX®)

37


Freund Corporation

(Millions of yen)

Orders

Order backlog

Japan 91%

Export 9%

FY2/15 ¥6,887 million

Orders Sales

Pharmaceutical machinery is the main source of growth.

Orders for pharmaceutical machinery are strong in Japan and Asia.

Sales by Region

Machinery

FY2/11 FY2/12 FY2/13 FY2/14 FY2/15 FY2/11 FY2/12 FY2/13 FY2/14 FY2/15

38


Orders

(M$)

Orders

Order backlog

Sales

Expanded the factory

Operations started as planned at the Milan Demonstration Center Laboratory

High-profile promotional activities at the ACHEMA process industries world forum in Germany in June 2014

(M$) (M$)

Latin America/Canada 32%

FY12/15 $37 million

USA 39%

Europe, etc. 30%

Sales by Region

Machinery

FY12/11 FY12/12 FY12/13 FY12/14 FY12/10 FY12/11 FY12/12 FY12/13 FY12/14 FY12/10

39

A Growing Product Lineup for the Healthcare Sector

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)

Chemical & Food

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

40

Chemical & Food Business Performance


33%

Food preservatives 30%

Supplements and

other new products

37%

FY2/15 Sales ¥6,482 million

Sales Composition Sales

(Millions of yen)

Strong sales of pharmaceutical excipients to manufacturers of generic drugs Launched new food preservative products

Chemical & Food

FY2/11 FY2/12 FY2/13 FY2/14 FY2/15

41

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

Leveraging the Group’s Strengths to Develop New Products Faster

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 2011.

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)

R&D

42

Creating Innovative Products for 50 Years

R&D

Machinery Chemical & Food 1964 Automatic film coating device Film coating liquid 1965 HPC, HPS 1966 Perfiller®-101, Lubriwax®-101 1967 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®-101 1975 Centrifugal fluid coating granulation device CF-Granulator Pharmaceutical excipient Dilactose® 1978 Food preservative Antimold®-102 1981 Hybrid fluid bed granulation coating device SPIR-A-FLOW® Pharmaceutical excipient NONPAREIL®-101 1982 Pharmaceutical excipient NONPAREIL®-103 1983 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®-105 1994 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®102 2005 Twin screw drying granulator ROLLER COMPACTOR

Automatic anti-mold detector Antimold® Detector

2006 Fully automatic coating system for food and nutritional supplements HICOATER FPC

Pharmaceutical excipient NONPAREIL®-108, pharmaceutical excipient Polishing Wax-105

Food additive Polishing Wax-104 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® 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®

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FY2/14 FY2/15 FY2/16

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Machinery orders 3,026 2,491 2,696 1,853 3,648 2,549 3,016 3,192 3,833 2,900

Machinery order backlog

5,440 5,328 6,144 4,991 6,945 7,235 7,225 6,682 8,900 8,676

Consolidated sales 4,656 4,224 3,545 5,189 3,506 3,864 4,641 5,413 3,002 4,694

Machinery 3,048 2,684 1,933 3,337 1,794 2,249 3,106 3,792 1,826 3,166

Chemical & Food 1,608 1,540 1,611 1,851 1,711 1,617 1,534 1,620 1,176 1,528

Consolidated segment profit

562 281 156 286 (20) 121 484 565 (24) 223

Machinery 496 262 166 316 47 78 487 496 (9) 161

Chemical & Food 162 94 67 54 80 113 129 151 81 137

Elimination or corporate

(97) (74) (78) (85) (149) (68) (132) (83) (97) (75)

Yen/dollar rate 92.4 95.7 96.8 97.7 102.8 102.4 102.9 105.8 119.2 120.3

(Millions of yen)

Quarterly Performance

Note: Yen/dollar rates are the averages for calendar year quarters.

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Inquiries:

Freund Corporation

Public Relations / Investor Relations Office

Tel: +81-3-5292-0215

Fax: +81-3-5292-0290

Email: [email protected]

IR website: http: //www.freund.co.jp

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.

i. financial summary for 1h fy2/16 - · pdf file1 i. financial summary for 1h fy2/16 p2 ii....

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