ISEKI&CO., LTD.

Business Details

The ISEKI Group is a comprehensive agricultural machinery specialist manufacturer that develops, manufactures, and sells agricultural machinery such as tractors, rice transplanters, and combine harvesters both domestically and internationally. Domestically, the group operates through its sales subsidiary ISEKI Japan, while internationally it operates through affiliated companies and local agents in France, Germany, the UK, Thailand, and other countries. In Q1 FY2026 (ending December 2026), domestic sales were ¥28,612 million and overseas sales were ¥22,859 million. The long-term vision is to become a "Solutions Company for Food, Agriculture, and the Earth."

Recent Overview

In Q1 FY2026 (fiscal year ending December 2026), both sales and operating profit increased significantly, with ordinary profit up 160% year-on-year

In Q1 FY2026 (January to March), sales were ¥51,471 million (up 11.5% year-on-year) and operating profit was ¥2,603 million (up 88.5% year-on-year). A combination of increased sales, price revision effects, and Project Z effects drove substantial profit growth. Ordinary profit was ¥2,552 million (up 160.4% year-on-year), further boosted by an improvement in foreign exchange gains and losses. Meanwhile, quarterly net income attributable to owners of the parent was limited to ¥1,486 million (down 1.9% year-on-year) due to a decrease in gains on sale of fixed assets and an increase in corporate taxes. Domestically, robust demand for agricultural machinery products and implements as well as continued growth in maintenance revenue supported results, while overseas sales expanded steadily, primarily in Europe. The full-year earnings forecast remains unchanged from the previous announcement (February 13, 2026).

Key Products

Growth Drivers

• Capturing robust demand for domestic agricultural machinery products and implements, with sales increases across all categories except harvesting & processing machinery
• Steady continued growth in maintenance revenue (implements, repair parts & repair revenue) (domestic up 16.9% year-on-year, overseas up 28.5% year-on-year)
• Improved profitability due to price revision effects
• Manifestation of structural reform effects through Project Z initiatives (production optimization, development optimization, deepening domestic sales)
• Expansion of overseas sales centered on Europe (overseas sales up 15.9% year-on-year)
• Boost to ordinary profit from improvement in foreign exchange gains and losses
• Inventory reduction and improved sales efficiency through domestic sales company ISEKI Japan (integration of 7 companies)

Risks

• Adverse impact on overseas business due to US tariff policy effects and heightened geopolitical risks such as the situation in the Middle East
• For full-year FY2026 (fiscal year ending December 2026), a temporary sales decline is expected due to domestic production capacity constraints, with a sales forecast of ¥180,000 million (down 3.1% year-on-year)
• Negative operating cash flow in Q1 (¥-8,933 million) due to seasonal increases in working capital, and an increase in interest-bearing debt
• Temporary cost increases and production transfer risks associated with Project Z production optimization investments (Q1 investing cash flow of ¥-2,667 million)
• Foreign exchange fluctuation risk (assumed rates: 1 US dollar = ¥150, 1 euro = ¥175)
• Demand fluctuation risk in specific categories, such as the 21.8% year-on-year decline in domestic harvesting & processing machinery (combine harvesters, etc.)
• The ongoing need for continuous profitability improvement to achieve Project Z targets (by 2027: operating margin of 5% or higher, ROE of 8% or higher, DOE of 2% or higher)
• Decline in equity ratio (from 35.2% at end of FY2025 to 33.8% at end of Q1 FY2026) and increased financial leverage