FACTBOOKDevelops fluid-bed granulation coating system “Flo-Coater” 1978 Develops food...

FACTBOOK

Corporate Profile [ 1-4 ]

Consolidated Balance Sheet [ 5-6 ]

Consolidated Statement of Income [ 7 ]

Consolidated Statement of Changes in Equity [ 8 ]

Consolidated Statement of Cash Flows [ 9-10 ]

Information by Business Segment/Region [ 11 ]

and Others

Consolidated Profitability Indicators [ 12 ]

Consolidated Efficiency Indicators [ 13 ]

Consolidated Stability Indicators [ 14 ]

Stock Information [ 15-16 ]

For the fiscal year ended February 28, 2014

JASDAQ : 6312

Corporate Profile:

Mission Statement, Mid-Term Management Plan,

Corporate Information

Corporate Name Freund Corporation

Head Office 3F Shinjuku TX Bldg., 1-3-21 Okubo, Shinjuku-ku, Tokyo 169-0072, Japan

Established April 22, 1964

Capital Stock ￥1,035 million (as of February 28, 2014)

Chairman & CEO

President & COO

Yasutoyo Fusejima

Iwao Fusejima

Primary Business

Developing, manufacturing and selling granulation and coating equipment for

pharmaceutical, foods and chemical industries, pharmaceutical excipients, food

preservatives and dietary supplement products; manufacturing experimental

drugs on a contract basis and its agency

Employees Consolidated: 370 (as of February 28, 2014)

Our Mission Statement

Pioneering the Future through the Power of Creativity

Creation of highly unique products

Creation of new markets through vision

Creation of a management regime to maximize corporate organization

Creation of a corporate spirit to proactively challenge difficulties

Creation of enriching human relationships

Mid-Term Management Plan: Change & Challenge 2014-2016

1 Copyright (c) 2014 Freund Corporation. All Rights Reserved.

Consolidated Net Sales: ¥23 billion

Operating Income Margin: 10%+

¥17.6 billion

7.3％

FY2/14

Actual

FY2/17

Plan

¥18.0 billion

7.4％

FY2/15

Forecast

ＯｎｅｆｏｒＡｌｌ, ＡｌｌｆｏｒＯｎｅ

• Create a corporate growth structure less susceptible

to shifts in market demand

• Full-scale move into overseas markets

• Accelerate new product development and reinforce

product competitiveness by maximizing Group resources

• Expand and enhance product lineup

• Create a corporate culture encouraging innovative

solutions and facilitate human resource development

• Institute new improvements to product development

and production processes

• Execute organizational reform aimed at maximizing

enterprise value

• Maximize profitability through reduction in overall

operating costs

Achieving Innovative Growth

Reinforcing Corporate Structure Resilience

~ Relaunch toward Centennial Anniversary ~

Corporate Profile:

Group Network, Business Performance


FREUND PHARMATEC LTD. FREUND-VECTOR CORPORATION

R&D LABORATORIES （Hamamatsu City, Japan）

Ireland

U.S.

Group Companies

Freund Kasei Co., Ltd. ●

Manufacturing food preservatives

FREUND-TURBO CORPORATION ●

R&D, designing, manufacturing and selling

machinery for powder and granular materials

FREUND INTERNATIONAL, LTD. (U.S.) ●

An intermediary holding company

FREUND-VECTOR CORPORATION (U.S.) ●

Manufacturing and selling machinery for powder and

granular materials

FREUND PHARMATEC LTD. (Ireland) ●

Developing new drug formulations

FREUND-TURBO CORPORATION

10,355

9,085 9,399

11,013 11,368 11,539

13,104 13,478 12,943 13,257

15,236

16,396

17,616

4.9%

2.0%

3.5%

4.7%5.1% 5.3%

7.1% 7.1%7.5%

5.1%

7.0%

9.0%

7.3%

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

Business Performance

Net Sales (\ million)

Operating Income Margin (%)

Net Sales (¥ million)

1971

Develops automatic sugar, film coating

system “Hi-Coater”

1986

Licenses “Flo-Coater” technology to

VECTOR Corporation in the U.S.

1964

Freund Corporation launched

Develops automatic film coating system

Develops film coating liquid

1967

Develops pharmaceutical excipient

“CMEC” 1970

Develops dry granulation

system “Roller Compactor”

1975

Develops pharmaceutical excipient Dilactose

Develops centrifugal fluid coating granulation

system “CF Granulator”

1965

Develops pharmaceutical

excipients “HPC” and “HPS”

1969

Develops fluid-bed granulation

coating system “Flo-Coater”

1978

Develops food preservative “Antimold-102”

1979

Licenses “Hi-Coater” technology to VECTOR

Corporation in the U.S.

1980

Launches Freund Kasei Co., Ltd.

1982

Develops pharmaceutical excipient “Nonpareil-103”

1981

Develops composite-type fluid-bed

granulation coating system “Spair-A-Flow”

Develops pharmaceutical excipient

“Nonpareil-101”

1987

Develops multifunctional food

preservative “Negamold”


2008

Develops automatic table coating system

“Hi-Coater FZ”

2010

Launches FREUND PHARMATEC LTD.

in Ireland

Acquires Turbo Kogyo Co., Ltd.

Moves the head office to Okubo, Shinjuku-ku,

Tokyo

Develops high-speed agitation

granulation system “Granumist”

Develops pharmaceutical

excipient “Granutol”

Develops food additive

“Foodsguard”

1997

Acquires U.S.-based VECTOR

Corporation

1992

Opens a branch and R&D Laboratories

in Hamamatsu

1996

Develops food coating base material

“Hemiroce”

2000

Machinery Division acquires international

QA certification ISO9001

2003

Develops food additive “Perfiller-102”

Develops food coating base material “AQ shelax”

2005

Develops twin-screw “Roller Compactor”

2002

Develops food preservative “Antimold Tender,”

a persistent form of ethanol evaporation

2004

Lists on the JASDAQ Securities Exchange

2006

Develops “Hi-Coater EPC,” a fully automatic coating system

for food and nutritional supplement products

Develops food additive “Polishingwax-104”

Develops pharmaceutical excipient “Nonpareil-108,” “Polishingwax-105”

2009

Develops fluid-bed granulation coating system

“Flo-Coater Universal”

1993

Licenses Roller Compactor

technology to VECTOR

Corporation in the U.S.

：Freund Group (Corporate) Pen ：Machinery Business Ink ：Chemicals & Foods Business

2012

U.S.-based VECTOR Corporation renamed

FREUND-VECTOR CORPORATION

Corporate Profile:

Corporate Group Time Line

2013

Develops food additive “Maltitol Granule®,” “Isomalt Granule®”

Develops direct compressible lactose “Dilactose® F (Fine)”

Corporate Profile:

Business Models & Business Outline


Chemicals, Foods Business Segment Machinery Business Segment

CF Granulator

(Sphericity Granule

Pelletization System)

Hi-Coater FZ

(Automated Coating

Pill System)

Dilactose

(Direct Tableting

Excipient)

This segment manufactures and markets granulating

and coating systems for use in the pharmaceutical,

food and fine chemical industries.

Freund currently commands some 70% of the

Japanese market for coating systems. In addition to

markets in Asia, sales are growing in Europe and the

U.S. through an American subsidiary. We are the only

manufacturer in the world that produces machine

equipment based on pharmaceutical formulation

technologies (software).

By integrating grinding and sorting technologies to

its granulating and coating technologies, Freund is

focusing its energies and resources on expanding

sales of industrial machines.

This segment produces and distributes

pharmaceutical excipients, food preservatives and

diet supplement.

Pharmaceutical excipients are produced at GMP

controlled facilities. Food preservatives, meanwhile,

are utilized to protect the quality of preserved food

products, contributing to the overall safety of the

public diet.

In co-development with its client-companies, Freund

commercializes diet supplement and seamless mini-

capsule products by utilizing its granulating and

coating engineering expertise.

Antimold Mild

(Food Preservative)

Granutol

(D-mannitol Direct

Tableting Excipient)

From “pen and ink” to “hardware and software”

A unique business model that allows for research and

development to be performed for both equipment and

excipients simultaneously

Consolidated Balance Sheet


(￥ thousand) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

Assets

Total assets 12,049,749 12,196,709 14,342,112 14,971,100 15,550,529

Current assets 8,482,946 8,261,686 10,554,713 11,084,903 11,331,109

Cash and deposits 3,073,366 2,132,562 3,035,083 3,617,368 4,600,568

Notes and accounts receivable - trade 3,598,768 4,150,425 4,954,594 4,764,656 4,409,286

Merchandise and finished goods 394,994 446,489 251,508 210,802 202,036

Work in process 631,277 837,741 1,219,363 1,497,497 937,572

Raw materials and supplies 354,879 131,988 403,611 394,182 535,596

Prepaid expenses 81,966 116,942 108,630 114,663 123,403

Deferred tax assets 179,828 121,112 219,149 285,351 210,076

Other 194,904 347,994 381,906 227,221 345,239

Allowance for doubtful accounts (27,039) (23,570) (19,134) (26,839) (32,670)

Non-current assets 3,566,803 3,935,023 3,787,398 3,886,197 4,219,419

Property, plant and equipment 2,531,359 2,947,004 2,861,869 2,910,188 3,052,125

Buildings and structures 2,081,914 2,354,349 2,371,504 2,460,598 2,606,158

Accumulated depreciation (1,117,516) (1,319,060) (1,396,254) (1,491,002) (1,614,554)

Buildings and structures, net 964,398 1,035,289 975,250 969,595 991,603

Machinery, equipment and vehicles 342,213 1,044,261 1,027,260 1,091,261 1,294,157

Accumulated depreciation (197,216) (668,613) (725,714) (791,017) (883,920)

Machinery, equipment and vehicles, net 144,997 375,647 301,545 300,243 410,237

Land 1,173,924 1,323,482 1,322,788 1,324,424 1,327,906

Construction in progress 44,167 16,769 22,143 60,786 20,662

Other 611,858 650,359 722,391 821,507 986,001

Accumulated depreciation (407,986) (454,544) (482,249) (566,369) (684,285)

Other, net 203,871 195,815 240,141 255,137 301,715

Intangible assets 66,372 35,204 26,573 29,749 178,301

Software 54,223 31,945 10,211 13,387 175,042

Other 12,148 3,258 16,362 16,362 3,258

Investments and other assets 969,070 952,813 898,955 946,258 988,992

Investment securities 292,038 291,904 288,707 309,056 315,502

Business insurance funds 257,020 304,417 320,231 348,480 340,161

Deferred tax assets 228,603 182,868 129,592 140,053 157,619

Other 205,386 187,267 173,533 160,988 187,005

Allowance for doubtful accounts (13,977) (13,644) (13,109) (12,319) (11,296)

Consolidated Balance Sheet



Liabilities

Total liabilities 4,110,055 4,124,716 5,852,553 5,655,838 5,157,637

Current liabilities 3,527,529 3,501,475 5,204,813 5,015,774 4,402,725

Notes and accounts payable - trade 1,894,016 2,070,954 2,810,177 2,478,182 2,068,855

Electronically recorded obligations - operating - - - - 317,482

Lease obligations - - 16,347 20,393 65,017

Income taxes payable 181,600 10,046 462,635 464,890 170,561

Accrued consumption taxes 52,295 302 9,188 57,056 64,701

Accrued expenses 266,344 257,109 272,795 275,625 376,966

Advances received 719,151 576,213 1,223,324 1,279,621 926,851

Provision for bonuses 199,633 139,248 181,242 234,156 197,204

Provision for directors' bonuses 59,000 37,000 63,000 86,000 65,000

Asset retirement obligations - - - - 22,000

Other 155,486 410,601 166,102 119,848 128,084

Non-current liabilities 582,526 623,240 647,740 640,063 754,912

Long-term accounts payable - other 339,983 374,281 322,747 326,950 330,859

Lease obligations - - 59,275 59,809 179,849

Provision for retirement benefits 138,510 164,821 165,117 168,860 176,520

Negative goodwill 57,834 50,040 42,245 34,451 26,656

Asset retirement obligations - - 26,971 27,396 15,253

Other 46,197 34,097 31,382 22,596 25,773

Net assets

Total net assets 7,939,693 8,071,993 8,489,558 9,315,262 10,392,891

Shareholders' equity 8,334,602 8,722,213 9,201,521 9,837,542 10,450,446

Capital stock 1,035,600 1,035,600 1,035,600 1,035,600 1,035,600

Capital surplus 1,282,890 1,282,890 1,282,890 1,282,890 1,280,522

Retained earnings 6,217,198 6,604,853 7,084,177 7,720,198 8,335,593

Treasury shares (201,085) (201,130) (201,146) (201,146) (201,269)

Accumulated other comprehensive income (520,130) (769,581) (845,427) (639,786) (211,346)

Valuation difference on available-for-sale securities 5,045 3,786 3,627 14,365 14,934

Foreign currency translation adjustment (525,175) (773,368) (849,055) (654,152) (226,280)

Minority interests 125,221 119,361 133,465 117,506 153,791

Total liabilities and net assets 12,049,749 12,196,709 14,342,112 14,971,100 15,550,529

Consolidated Statement of Income



Net sales 12,943,176 13,257,904 15,236,434 16,396,939 17,616,284

Cost of sales 8,675,661 9,318,050 10,624,305 11,313,798 12,377,597

Gross profit 4,267,515 3,939,853 4,612,128 5,083,141 5,238,686

Selling, general and administrative expenses 3,297,134 3,259,576 3,546,888 3,612,985 3,952,140

Operating income 970,381 680,276 1,065,239 1,470,155 1,286,546

Non-operating income 53,958 58,414 61,344 151,692 60,847

Interest income 6,324 1,270 4,846 2,558 1,695

Dividend income 5,140 4,574 4,294 4,753 4,716

Technical support fee 23,349 20,946 20,956 12,411 15,068

Rent income 5,874 5,976 5,478 4,589 3,824

Insurance premiums refunded cancellation - - - 77,565 -

Foreign exchange gains - - 2,465 27,541 12,679

Amortization of negative goodwill 7,794 7,794 7,794 7,794 7,794

Subsidy income - 8,371 - - -

Other 5,474 9,478 15,508 14,478 15,069

Non-operating expenses 72,380 40,332 3,205 3,558 5,464

Interest expenses 767 1,726 1,286 2,147 4,860

Foreign exchange losses 50,683 18,511 - - -

Commission fee 2,490 - - - -

Guarantee commission 5,358 6,374 - - -

Loss on investments in partnership 974 - - - -

Compensation expenses - - 513 - -

Other 12,104 13,720 1,405 1,410 604

Ordinary income 951,959 698,358 1,123,378 1,618,290 1,341,929

Extraordinary income 5,953 312,342 1,010 21,773 4,665

Reversal of allowance for doubtful accounts 2,387 3,431 810 - -

Gain on sales of non-current assets 3,565 5,900 199 21,773 4,665

Gain on bargain purchase - 303,010 - - -

Extraordinary losses 2,131 340,609 22,137 302,297 23,149

Loss on retirement of non-current assets 631 4,612 4,409 937 616

Loss on valuation of investment securities 1,499 - 4,750 - -

Loss on abolishment of retirement benefit plan - 661 - - -

Contribution for withdrawal from employees' pension fund - 273,970 - - -

Loss on valuation of golf club membership - 1,450 - - -

Office transfer expenses - 59,915 - - -

Litigation expenses - - - 301,360 -

Loss on adjustment for changes of accounting standard

for asset retirement obligations- - 12,978 - -

Impairment loss - - - - 22,533

Income before income taxes and minority interests 955,781 670,091 1,102,250 1,337,765 1,323,445

Income taxes - current 368,198 38,417 503,321 658,655 441,615

Income taxes - deferred 10,567 97,520 (33,732) (74,219) 78,792

Total income taxes 378,766 135,938 469,588 584,435 520,408

Income before minority interests - - 632,662 753,330 803,036

Minority interests in income (loss) 13,031 17,159 24,001 (12,026) 15,194

Net income 563,983 516,992 608,660 765,356 787,841

Consolidated Statement of Changes in Equity


FY2/13 (March 1, 2012 - February 28, 2013)

Capital

stock

Capital

surplus

Retained

earnings

Treasury

shares

Total

shareholders'

equity

Valuation

difference on

available-for-

sale

securities

Foreign

currency

translation

adjustment

Total

accumulated

other

comprehensive

income

Balance at beginning of current period 1,035,600 1,282,890 7,084,177 (201,146) 9,201,521 3,627 (849,055) (845,427) 133,465 8,489,558

Changes of items during period

Dividends of surplus (129,335) (129,335) (129,335)

Net income 765,356 765,356 765,356

Net changes of items other than

shareholders' equity10,738 194,903 205,641 (15,959) 189,682

Total changes of items during period －－ 636,021 － 636,021 10,738 194,903 205,641 (15,959) 825,703

Balance at end of current period 1,035,600 1,282,890 7,720,198 (201,146) 9,837,542 14,365 (654,152) (639,786) 117,506 9,315,262

FY2/14 (March 1, 2013 - February 28, 2014)

Capital

stock

Capital

surplus

Retained

earnings

Treasury

shares

Total

shareholders'

equity

Valuation

difference on

available-for-

sale

securities

Foreign

currency

translation

adjustment

Total

accumulated

other

comprehensive

income

Balance at beginning of current period 1,035,600 1,282,890 7,720,198 (201,146) 9,837,542 14,365 (654,152) (639,786) 117,506 9,315,262

Changes of items during period

Dividends of surplus (172,447) (172,447) (172,447)

Net income 787,841 787,841 787,841

Purchase of treasury shares (122) (122) (122)

Changes in foreign subsidiaries interest

in their subsidiaries(2,367) (2,367) (2,367)

Net changes of items other than

shareholders' equity568 427,871 428,439 36,285 464,725

Total changes of items during period － (2,367) 615,394 (122) 612,904 568 427,871 428,439 36,285 1,077,629

Balance at end of current period 1,035,600 1,280,522 8,335,593 (201,269) 10,450,446 14,934 (226,280) (211,346) 153,791 10,392,891

Shareholders' equity Accumulated other comprehensive income

Minority

interests

Total

net assets(￥ thousand)

Shareholders' equity Accumulated other comprehensive income

Minority

interests

Total

net assets(￥ thousand)

Consolidated Statement of Cash Flows



Cash flows from operating activities

Net cash provided by (used in) operating activities 457,959 65,392 1,219,303 740,505 1,227,300

Income before income taxes and minority interests 955,781 670,091 1,102,250 1,337,765 1,323,445

Depreciation 212,810 257,169 264,080 232,685 303,794

Gain on bargain purchase - (303,010) - - -

Litigation expenses - - - 301,360 -

Impairment loss - - - - 22,533

Increase (decrease) in provision for bonuses 12,063 (83,481) 41,994 52,914 (39,709)

Increase (decrease) in provision for directors' bonuses - (22,000) 26,000 23,000 (21,000)

Increase (decrease) in allowance for doubtful accounts (8,584) (3,231) (4,002) 4,318 (1,022)

Interest and dividend income (11,465) (5,845) (9,140) (7,311) (6,411)

Interest expenses 767 1,726 1,286 2,147 4,860

Contribution for withdrawal from employees' pension fund - 273,970 - - -

Loss on adjustment for changes of accounting standard

for asset retirement obligations- - 12,978 - -

Foreign exchange losses (gains) 48,113 16,075 (10,190) (28,093) (23,248)

Loss (gain) on sales of property, plant and equipment (3,565) (5,900) (199) (21,773) (4,665)

Loss (gain) on cancellation of insurance contract - - - (77,565) 220

Office transfer expenses - 59,915 - - -

Decrease (increase) in notes and accounts receivable - trade (309,633) (212,587) (813,327) 217,007 453,171

Decrease (increase) in inventories 887,009 (22,649) (494,546) (158,042) 552,870

Decrease (increase) in other assets (41,745) (20,580) (141,153) 203,933 (125,574)

Increase (decrease) in notes and accounts payable - trade (772,165) 101,967 745,276 (350,041) (113,810)

Increase (decrease) in advances received (190,790) (155,027) 673,003 2,393 (447,750)

Increase (decrease) in other liabilities 53,368 (45,038) 21,339 (25,277) 103,404

Other, net (4,024) (3,181) 1,781 (6,432) (6,715)

Subtotal 827,940 498,382 1,417,431 1,702,989 1,974,390

Interest and dividend income received 13,934 5,850 9,140 7,311 6,411

Interest expenses paid (767) (1,726) (1,286) (2,147) (4,860)

Payments for office transfer expenses - (49,358) - - -

Payments of contribution for withdrawal from employees'

pension fund- - (273,970) - -

Litigation expenses paid - - - (301,360) -

Income taxes refund 15,756 12,867 179,527 25,201 56,846

Income taxes paid (398,902) (400,623) (111,539) (691,488) (805,487)

Consolidated Statement of Cash Flows

Copyright (c) 2014 Freund Corporation. All Rights Reserved. 10


Cash flows from investing activities

Net cash provided by (used in) investing activities (198,034) (623,597) (154,886) (332,266) (423,797)

Payments into time deposits (25,000) - - (276,885) (441,252)

Proceeds from withdrawal of time deposits - 25,000 - 71,785 259,560

Purchase of property, plant and equipment (168,586) (466,320) (120,869) (172,775) (264,478)

Payments for retirement of non-current assets - - (1,956) (210) (457)

Proceeds from sales of property, plant and equipment 17,367 90 199 4,891 22,212

Purchase of intangible assets (7,826) (3,352) (13,304) (6,728) (5,704)

Purchase of investment securities (1,934) (1,978) (3,009) (2,016) (2,037)

Proceeds from share of profits on investments in capital 2,770 - - - -

Purchase of insurance funds (16,473) (16,473) (19,269) (256,514) (4,557)

Proceeds from cancellation of insurance funds 12,358 5,842 3,455 305,831 12,655

Payments for guarantee deposits (11,169) (59,186) (992) (67) (396)

Proceeds from collection of guarantee deposits 460 105,024 859 678 656

Purchase of shares of subsidiaries resulting in change

in scope of consolidation- (212,243) - - -

Repayments of guarantee deposits received - - - (255) (255)

Proceeds from guarantee deposits received - - - - 255

Cash flows from financing activities

Net cash provided by (used in) financing activities (154,086) (196,584) (134,998) (164,975) (226,608)

Repayment of long-term loans payable (18,027) (61,543) - - -

Purchase of treasury shares - (44) (16) - (122)

Proceeds from sales and leasebacks - - - - 13,104

Repayments of lease obligations (376) (1,533) (2,042) (18,912) (59,494)

Cash dividends paid (129,569) (129,186) (129,066) (129,190) (172,238)

Cash dividends paid to minority shareholders (6,112) (4,277) (3,873) (16,872) -

Purchase of treasury shares of subsidiaries - - - - (7,857)

Effect of exchange rate change on cash and cash equivalents (43,070) (161,014) (26,896) 109,601 142,555

Net increase (decrease) in cash and cash equivalents 62,767 (915,803) 902,521 352,864 719,450

Cash and cash equivalents at beginning of period 2,985,598 3,048,366 2,132,562 3,035,083 3,387,948

Cash and cash equivalents at end of period 3,048,366 2,132,562 3,035,083 3,387,948 4,107,398

Information by Business Segment/Region and Others



By business segment

Net sales 12,943,176 13,257,904 15,236,434 16,396,939 17,616,284

Machinery 7,950,873 8,094,540 9,582,833 9,914,824 11,004,633

Chemicals, Foods 4,992,303 5,163,363 5,653,601 6,482,115 6,611,650

Operating income 970,381 680,276 1,065,239 1,470,155 1,286,546

Machinery 837,798 619,905 907,148 1,172,082 1,242,320

Chemicals, Foods 490,632 388,925 470,376 565,227 379,495

Elimination (358,049) (328,554) (312,285) (267,154) (335,268)

Composition ratio

Net sales 100.0% 100.0% 100.0% 100.0% 100.0%

Machinery 61.4% 61.1% 62.9% 60.5% 62.5%

Chemicals, Foods 38.6% 38.9% 37.1% 39.5% 37.5%

Operating income 100.0% 100.0% 100.0% 100.0% 100.0%

Machinery 63.1% 61.4% 65.9% 67.5% 76.6%

Chemicals, Foods 36.9% 38.6% 34.1% 32.5% 23.4%

Note: Operating income composition ratio calculated excluding elimination


By region

Net sales 12,943,176 13,257,904 15,236,434 16,396,939 17,616,284

Japan 9,068,256 10,021,017 11,794,037 12,800,760 13,233,955

Overseas 3,874,920 3,236,886 3,442,396 3,596,179 4,382,328

North/South America 1,370,866 1,270,081 1,512,605 948,092 1,503,632

Europe, Africa 1,183,983 491,552 841,899 772,797 701,481

Middle East, Asia 1,320,070 1,475,252 1,087,891 1,875,289 2,177,214

Composition ratio

Net sales 100.0% 100.0% 100.0% 100.0% 100.0%

Japan 70.1% 75.6% 77.4% 78.1% 75.1%

Overseas 29.9% 24.4% 22.6% 21.9% 24.9%

North/South America 10.6% 9.6% 9.9% 5.8% 8.5%

Europe, Africa 9.1% 3.7% 5.5% 4.7% 4.0%

Middle East, Asia 10.2% 11.1% 7.1% 11.4% 12.4%


Others

Orders received 8,049,888 11,005,679 12,200,165 12,125,648 12,804,553

Machinery 7,189,763 9,924,289 10,135,038 9,280,923 10,067,314

Chemicals, Foods 860,125 1,081,389 2,065,127 2,844,725 2,737,238

Order backlog 3,238,261 5,282,870 6,148,469 5,817,577 5,551,931

Machinery 3,098,361 5,197,981 5,810,696 5,271,055 4,991,812

Chemicals, Foods 139,899 84,889 337,772 546,522 560,118

Capital investment 175,016 469,672 218,062 221,962 477,440

Depreciation 212,810 257,169 264,080 232,685 303,794

R&D expenses 312,562 355,163 390,668 435,154 464,097

R&D expenses ratio 2.4% 2.7% 2.6% 2.7% 2.6%

Overseas sales ratio 8.1% 11.0% 11.3% 12.1% 10.6%

*Note: Holds some 300 patents and registered brands

Consolidated Profitability Indicators


(￥ thousand ) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

12,943,176 13,257,904 15,236,434 16,396,939 17,616,284

4,267,515 3,939,853 4,612,128 5,083,141 5,238,686

3,297,134 3,259,576 3,546,888 3,612,985 3,952,140

970,381 680,276 1,065,239 1,470,155 1,286,546

Ordinary Income 951,959 698,358 1,123,378 1,618,290 1,341,929

563,983 516,992 608,660 765,356 787,841

(%) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

Gross Profit on Net Sales 33.0 29.7 30.3 31.0 29.7

SG&A Expenses Ratio 25.5 24.6 23.3 22.0 22.4

Operating Income Margin 7.5 5.1 7.0 9.0 7.3

Ordinary Income Margin 7.4 5.3 7.4 9.9 7.6

Net Income Margin 4.4 3.9 4.0 4.7 4.5

Gross Profit on Net Sales=Gross Profit/Net Sales

SG&A Expenses Ratio=SG&A Expenses/Net Sales

Operating Income Margin=Operating Income/Net Sales

Ordinary Income Margin=Ordinary Income/Net Sales

Net Income Margin=Net Income/Net Sales

Operating Income

Net Income

SG&A Expenses

Net Sales

Gross Profit

0.0

10.0

20.0

30.0

40.0

50.0

0

4,000

8,000

12,000

16,000

20,000

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)(￥million)

Gross Profit on Net Sales

Net Sales Gross ProfitGross Profit on Net Sales

0.0

2.0

4.0

6.0

8.0

10.0

0

4,000

8,000

12,000

16,000

20,000

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)(￥million)

Operating Income Margin

Net Sales Operating IncomeOperating Income Margin

0.0

2.0

4.0

6.0

8.0

10.0

0

4,000

8,000

12,000

16,000

20,000

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)(￥million)

Ordinary Income Margin

Net Sales Ordinary IncomeOrdinary Income Margin

0.0

2.0

4.0

6.0

8.0

10.0

0

4,000

8,000

12,000

16,000

20,000

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)(￥million)

Net Income Margin

Net Sales Net IncomeNet Income Margin

Consolidated Efficiency Indicators


(times) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

1.05 1.09 1.15 1.12 1.15

3.61 3.53 3.95 4.27 4.35

1.49 1.58 1.62 1.52 1.57

(days) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

51.3 38.5 39.4 44.3 39.1

101.5 114.3 118.7 106.1 91.4

53.4 57.0 67.3 55.2 49.4

Total Assets Turnover=Net Sales/Average Total Assets

Non-current Assets Turnover=Net Sales/Average Non-current Assets

Current Assets Turnover=Net Sales/Average Current Assets

Inventories Turnover=Average Inventories/Net Sales×365

Accounts Receivable Turnover=Accounts Receivable/Net Sales×365

Accounts Payable Turnover=Accounts Payable/Net Sales×365

Total Assets Turnover

Non-current Assets Turnover

Current Assets Turnover

Accounts Payable Turnover

Inventories Turnover

Accounts Receivable Turnover

0.00

1.00

2.00

3.00

4.00

5.00

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(times)

Non-current Assets Turnover

0.00

1.00

2.00

3.00

4.00

5.00

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(times)Current Assets Turnover

25.0

35.0

45.0

55.0

65.0

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(days)

Inventories Turnover

80.0

90.0

100.0

110.0

120.0

130.0

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(days)Accounts Receivable Turnover

Consolidated Stability Indicators


(￥ thousand ) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

7,814,472 7,952,632 8,356,093 9,197,756 10,239,100

12,049,749 12,196,709 14,342,112 14,971,100 15,550,529

3,566,803 3,935,023 3,787,398 3,886,197 4,219,419

8,482,946 8,261,686 10,554,713 11,084,903 11,331,109

3,527,529 3,501,475 5,204,813 5,015,774 4,402,725

0 0 0 0 0

(%) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

64.9 65.2 58.3 61.4 65.8

0.0 0.0 0.0 0.0 0.0

45.6 49.5 45.3 42.3 41.2

240.5 235.9 202.8 221.0 257.4

4.7 4.2 4.2 5.1 5.1

7.4 6.6 7.5 8.7 8.1

Equity Ratio=Equity/Total Assets ROA=Net Income/Total Assets

D/E Ratio=Interest-Bearing Debt/Equity ROE=Net Income/Average Equity

Fixed Ratio=Non-current Assets/Equity

Current Ratio=Current Assets/Current Liabilities

Equity Ratio

Total Assets

Non-current Assets

Current Assets

Current Liabilities

Equity

Interest-Bearing Debt

D/E Ratio

Fixed Ratio

Return on Equity (ROE)

Return on Assets (ROA)

Current Ratio

0.0

20.0

40.0

60.0

80.0

0

4,000

8,000

12,000

16,000

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)(￥million)

Equity Ratio

Equity Total Assets Equity Ratio

0.0

50.0

100.0

150.0

200.0

250.0

300.0

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)

Fixed Ratio・Current Ratio

Fixed Ratio Current Ratio

0.0

2.0

4.0

6.0

8.0

0

4,000

8,000

12,000

16,000

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)(￥million)

Return on Assets (ROA)

Total Assets Return on Assets (ROA)

0.0

3.0

6.0

9.0

12.0

0

4,000

8,000

12,000

16,000

FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

(%)(￥million)

Return on Equity (ROE)

Equity Return on Equity (ROE)

54.89%

49.03%

48.92%

3.46%

7.35%

5.58%

21.61%

19.09%

18.62%

19.70%

21.61%

25.60%

0.33%

2.93%

1.28%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

FY2/12

FY2/13

FY2/14

Individuals and others Foreign institutions and others

Other Japanese companies Financial institutions

Financial instruments business operators

Stock Information

Per Share Indicators

Status of Major Shareholders

Breakdown of Types of Shareholders


Note: Treasury shares are included in “Individuals and others.”

(\) FY2/10 FY2/11 FY2/12 FY2/13 FY2/14

Stock price at term end 485 441 501 1,480 1,183

Closing stock price range for the last 12 months 281-618 357-598 340-529 505-1,521 1,183-2,256

Earnings per share (EPS) 65.41 59.96 70.59 88.76 91.37

Book value per share (BPS) 906.29 922.32 969.12 1,066.73 1,187.51

Dividend per share (DPS) 15.00 15.00 15.00 20.00 25.00

As of February 28, 2014

Top 10 Shareholders Number of Shares Shareholding Ratio (%)

Yasutoyo Fusejima 944,600 10.27

K.K. FIL 824,000 8.96

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 430,600 4.68

The Master Trust Bank of Japan, Ltd. (Trust Account) 381,500 4.15

Sumitomo Mitsui Banking Corporation 372,000 4.04

BBH Matthews Japan Fund 366,500 3.98

OKAWARA MFG. CO., LTD. 336,800 3.66

Employee Stock Ownership 250,240 2.72

Japan Trustee Services Bank, Ltd. (Trust Account) 193,700 2.11

THE SHIZUOKA BANK, LTD. 184,000 2.00

Note: In addition to the above, Freund Corporation holds 577,685 shares (6.28%) of treasury shares.

　　 Shareholding ratio was calculated based on the total number of the issued shares including the number of treasury shares.

Stock Information


0

50,000

100,000

150,000

200,000

250,000

300,000

0

400

800

1,200

1,600

2,000

(shares)Changes in TOPIX and Stock Price/Trading Volume of Freund

Freund Trading Volume (RHS) Freund Stock Price (LHS) TOPIX

Source: BLOOMBERG L.P.； compiled by Freund Corporation

(yen)

0.00

10.00

20.00

30.00

40.00

50.00

60.00

(%)

Changes in Dividend Yield and Stock Yield

Dividend Yield Stock Yield (1/PER)

Source: BLOOMBERG L.P.; compiled by Freund Corporation

Contact

Freund Corporation

Corporate Administration Division

Planning & Investor Relations Office

Phone： +81-3-5292-0215

E-mail： [email protected]

URL： http://www.freund.co.jp/english/

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