SEMI-ANNUAL REPORTFor the six months ended September 30, 2023

QUALITATIVE INFORMATION(1) Qualitative Information Relating to Consolidated Quarterly Operating Results
During the six-month period under review, the Company posted net sales of ¥108,515 million (up 5.3% year on year),
operating income of ¥7,776 million (up 43.9% year on year), and net income attributable to owners of the parent of¥7,675 million on a consolidated basis (up 43.7% year on year).
Orders received on a consolidated basis in the first half of the fiscal year amounted to ¥108,409 million (down
27.8% year on year). In most regions, orders decreased compared with the previous corresponding period when orders
were received in the high level. Customers continued to refrain from capital expenditure.
The details of orders received by geographic region for the second quarter (July-September 2023) are as follows:

Makino Milling Machine Co., Ltd. and Its Consolidated Subsidiaries in Japan
Domestic orders received by Makino Milling Machine Co., Ltd. were below the level of the previous corresponding
period. Orders decreased primarily for die and mold for automobiles, general machinery including semiconductor
production equipment, as well as parts machining for automobiles.

MAKINO ASIA PTE LTD
Orders received in Asia were below the level of the previous corresponding period.
Orders received in China decreased for die and mold for electrical and electronic components and parts machining
for automobiles, for which orders had been brisk in the previous corresponding period. Even in such conditions, orders
from industries related to new energy vehicles remained steady.
Orders received in India for automobiles and aircrafts were below the level of the previous corresponding period
when orders had been concentrated.

MAKINO INC.
Orders received in America were at the same level as the previous corresponding period. Due to concerns over economic
slowdown, customers remained cautious regarding capital expenditure primarily for automobiles. Even in suchconditions, orders related to automation necessary to address labor shortage at production sites increased. Orders fromindustries related to aircrafts and medical devices remained firm.

MAKINO Europe GmbH
Orders received in Europe for parts machining for automobiles and general machinery as well as aircrafts were below thelevel of the previous corresponding period.
At the EMO, a European international machine tool trade show, held in Germany in September 2023, the Company
presented products that suit the particular needs of individual industries and proposed the use of automation in an effort
to seize an opportunity for business negotiations.

1

Although the business climate is expected to remain severe in the second half of the fiscal year, we will actively
conduct business activities through both face-to-face and online, including exhibiting our products at the Mechatronics
Technology Japan, a machine tools trade fair in Japan, and other exhibitions in different regions and holding online
seminars, to help address customers’ problems in a wide range of industries and win orders.

The Company will tackle four challenges, “Improved profitability,” “Increased asset efficiency,” “Greater
shareholder returns,” and “Enhanced sustainability” to manage operations with an eye on its capital costs and stock
price more than ever and achieve an improvement in corporate value. We will actively make rationalization investments
and work to enhance productivity by accelerating the development of high-value-added products that meet market
needs. We will improve the inventory turnover ratio especially by shortening production lead times. We will return profits
to our shareholders basically through the continuous distribution of stable dividends and flexibly through theimplementation of additional returns.
The Company has set targets, consolidated net sales of ¥270,000 million, an operating margin ratio of 12.0%, a
ROE of 11.0%, and a five-year average total payout ratio between 35% and 45%, which we aim to achieve for the fiscal
year ending March 31, 2028 through the initiatives described above.
Information about the initiatives will be posted on the Company’s website.

(2) Qualitative Information on Consolidated Financial Position
Total assets on a consolidated basis at the end of second quarter under review increased by ¥1,287 million from the endof the previous fiscal year to ¥349,748 million. This was primarily attributable to an increase of ¥7,567 million ininventories, a decrease of ¥4,153 million in notes and accounts receivable, trade, a decrease of ¥1,591 million in
investment securities, an increase of ¥1,323 million in machinery, equipment and vehicles, net, and an increase of ¥1,212
million in buildings and structures, net.
Total liabilities decreased by ¥11,134 million from the end of the previous fiscal year to ¥139,539 million. This wasprimarily attributable to a decrease of ¥4,354 million in notes and accounts payable, trade, a decrease of ¥815 million inborrowings, and a decrease of ¥669 million in deferred income taxes.
Net assets increased by ¥12,421 million from the end of the previous fiscal year to ¥210,209 million. The principal
items were an increase of ¥8,061 million in foreign currency translation adjustments, an increase of ¥5,765 million inretained earnings, and a decrease of ¥1,141 million in unrealized gains on available-for-sale securities.

(3) Qualitative Information on Consolidated Performance Forecasts
We have not revised our consolidated performance forecasts for the full fiscal year that had been announced previously(announced on July 31, 2023).

2

CONSOLIDATED BALANCE SHEETS
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
March 31, 2023 and September 30, 2023
US$1=¥149.58
Thousands ofdollars

Millions of yen

March 31, 2023

September 30, 2023

September 30, 2023

¥68,312¥68,240$456,210

Notes and accounts receivable

50,63446,480310,736

Marketable securities

4,234

4,235

28,312Finished products

28,27634,153228,325

Work in process

21,14020,317

135,826

Raw materials and supplies

45,69948,213322,322

Other current assets

12,961

8,294

55,448

Allowance for doubtful accounts(1,544)(1,657)(11,077)

229,713228,277

1,526,119

Buildings and structures, net

37,56538,778259,245

Machinery, equipment and vehicles, net

9,570

10,89372,823Tools, furniture and fixtures, net

5,034

5,430

36,301Land

19,08019,761132,109

Leased assets, net

6,012

5,996

40,085Construction in progress

1,950

1,831

12,240Total property, plant and equipment

79,21582,691

552,821

Other

2,952

3,017

20,169Total intangible assets

2,952

3,017

20,16927,10025,508

170,530

620

580

3,877

4,867

5,243

35,051

Net defined benefit assets

970

1,027

6,865

Other long-term assets

3,163

3,517

23,512

Allowance for doubtful accounts

(141)

(115)

(768)

Total investments and other assets

36,58035,762

239,082

118,747

121,471812,080¥348,461¥349,748$2,338,200

ASSETS
Current assets:
Cash and time deposits

Total current assets

Long-term assets:
Property, plant and equipment:

Intangible assets:

Investments and other assets:
Investment securities
Long-term loans receivable
Deferred income taxes

Total long-term assets
Total assets
The accompanying notes are an integral part of these statements.

3

US$1=¥149.58
Thousands ofdollars

Millions of yen

March 31, 2023

September 30, 2023

September 30, 2023

¥20,068¥16,682$111,525

Electronically recorded obligations-operating

19,01918,051

120,677

Current portion of long-term debt

6,707

1,830

12,234

932

946

6,324

Income taxes payable

2,080

2,068

13,825

Other current liabilities

41,89036,841

246,296

Total current liabilities

90,69876,419510,890

Bonds

20,00020,000133,707

Long-term debt

26,22830,290202,500

Long-term lease obligations

3,210

3,073

20,544

Deferred income taxes

6,973

6,303

42,137

LIABILITIES AND NET ASSETS
Current liabilities:
Notes and accounts payable - trade

Short-term lease obligations

Long-term liabilities:

0

Allowance for directors’ andcorporate auditors’ retirement benefits
Net defined benefit liabilities

122

133

889

1,357

1,446

9,667

Other long-term liabilities

2,083

1,872

12,515

Total long-term liabilities

59,975

63,120421,981¥150,674¥139,539$932,872

21,142

21,142

141,342

Capital surplus

37,05637,092247,974Retained earnings

114,714

120,480

805,455(4,233)(4,198)(28,065)

168,681

174,516

1,166,706

Unrealized gains on available-for-sale securities

15,16014,01993,722Foreign currency translation adjustments

12,88020,941

139,998

Total liabilities
Net assets:
Shareholders’ equity
Common stock, no par value
Authorized : 60,000,000 shares
Issued :24,893,841 shares

as of March 31 and September 30, 2023

Treasury stock
1,012,276 and 1,003,971 shares
as of March 31 and September 30, 2023 respectively
Total shareholders’ equity
Accumulated other comprehensive income

Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these statements.

4

565

354

2,366

28,60635,315

236,094

499

377

2,520

197,787

210,209

1,405,328¥348,461¥349,748$2,338,200

CONSOLIDATED STATEMENTS OF INCOME
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the Six months ended September 30, 2022 and 2023
US$1=¥149.58
Thousands ofdollars

Millions of yen

Six months ended
September 30, 2022

Six months ended
September 30, 2023

Six months ended
September 30, 2023

¥103,039¥108,515$725,464

73,73675,775506,585

29,30332,740218,879

23,89924,963

166,887

5,403

7,776

51,985Interest and dividend income

450

660

4,412

Exchange income

811

966

6,458

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income:Subsidy income

63

83

554

Other

451

447

2,988

1,775

2,158

14,427

Interest expense

146

161

1,076

Other

79

42

280

Total non-operating income
Non-operating expenses:

226

203

1,357

6,953

9,730

65,048Gain on sales of property, plant and equipment

12

160

1,069

Total extraordinary income

12

160

1,069

Loss on disposal of property, plant and equipment

430

6

40

Total extraordinary losses

430

6

40

Income (loss) before income taxes

6,535

9,884

66,078

Income taxes (Note 2)

1,190

2,200

14,707

Net income (loss)

5,344

7,683

51,3633

7

46¥5,340¥7,675$51,310

Total non-operating expenses
Ordinary income (loss)
Extraordinary income:Extraordinary losses:

Net income (loss) attributable to non-controlling interests
Net income (loss) attributable to owners of the parent

Yen

Dollars

Per share of common stock:
Net income (loss) attributable to owners of the parent - Basic		- Diluted¥

223.13¥321.38$2.15———The accompanying notes are an integral part of these statements.

5

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the Six months ended September 30, 2022 and 2023
US$1=¥149.58
Thousands ofdollars

Millions of yen

Six months ended
September 30, 2022

Six months ended
September 30, 2023

Six months ended
September 30, 2023

¥5,344¥7,683$51,363

Unrealized gains on available-for-sale securities(1,715)(1,140)(7,621)

Foreign currency translation adjustments

9,043

8,061

53,890Remeasurements of defined benefit plans

(262)

(210)

(1,403)

Net income (loss)
Other comprehensive income (loss):

Other comprehensive income (loss)

7,064

6,709

44,852

Total comprehensive income (loss)¥12,408¥14,393$96,222

12,406

14,384

96,162

Total comprehensive income (loss) attributable to:
Owners of the parent
Non-controlling interests
The accompanying notes are an integral part of these statements.

6

1

8

53

¥12,408¥14,393$96,222CONSOLIDATED STATEMENTS OF CASH FLOWS
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the six months years ended September 30, 2022 and 2023
US$1=¥149.58
Thousands ofdollars

Millions of yen

Cash flows from operating activities:
Income (loss) before income taxes
Adjustments for:
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in allowance fordirectors' and corporate auditors’ retirement benefits
Increase (decrease) in net defined benefit liabilities
Interest and dividend income
Interest expense
Exchange loss (gain)(Gain) loss on sales of property, plant and equipment
Loss on disposal of property, plant and equipment(Increase) decrease in notes and accounts receivable, trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable, trade
Other
SubtotalInterest and dividends received
Interest paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Net decrease (Increase) in time deposits
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Repayment of lease obligations
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchases of treasury stock
Purchases of treasury stock of subsidiaries in consolidation
Dividends paid
Dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period (Note 4)Six months ended
September 30, 2022

Six months ended
September 30, 2023

Six months ended
September 30, 2023

¥6,535¥9,884$66,078

3,787
(85)

3,934
(72)

26,300
(481)

(13)
5
(450)
146
(189)
(12)
430
10,896(11,899)(9,020)
8,643
8,775
444
(146)
(2,507)
6,565

10
(46)
(660)
161
(24)
(160)
6
8,055
(1,721)(8,430)(2,958)
7,979
657
(158)
(2,173)
6,304

66
(307)
(4,412)
1,076(160)(1,069)40
53,850(11,505)(56,357)(19,775)
53,342
4,392(1,056)(14,527)
42,144(1,387)(2,779)
31
(4)
(277)
(4,417)766(4,506)
364
(4)
(552)
(3,932)

5,121(30,124)2,433(26)(3,690)(26,286)

(502)
9,000
(1,500)(21)(50)(1,288)
(13)

(515)
4,000
(5,000)(2)(100)(1,907)(6)(3,442)
26,741(33,426)(13)(668)(12,749)
(40)

(358)
5,264

—
(3,531)—(23,606)

3,064
10,47775,712¥86,190

1,754
595
69,467¥70,062

11,726
3,977
464,413$468,391

The accompanying notes are an integral part of these statements.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries

1. Basis of Presenting Financial Statements
The accompanying consolidated financial statements of Makino Milling Machine Co., Ltd. (the “Company”) have been
prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its
related accounting regulations, and in conformity with accounting principles and practices generally accepted andapplied in Japan, which are different in certain respects as to application and disclosure requirements of International
Financial Reporting Standards.
In addition, the notes to the consolidated financial statements include information which is not required undergenerally accepted accounting principles and practices in Japan but is presented herein as additional information.
Amounts of less than one million yen have been omitted as permitted under generally accepted accounting
principles and practices in Japan. As a result, the totals shown in the accompanying consolidated financial statements(both in yen and dollars) do not necessarily agree with the sum of individual amounts.
The United States dollar amounts presented in the accompanying consolidated financial statements are included
solely for convenience and are stated, as a matter of arithmetical computation only, at the rate of ¥149.58 = US$1,
which was the prevailing exchange rate on September 30, 2023.
2. Income Taxes
The Company estimates an annual effective tax rate derived from projected annual income before taxes and calculatesinterim income taxes by applying the effective tax rate to the income before taxes at the end of each interim period.
3. Dividends
A summary of information regarding dividends is as follows:(1) Dividends paid in the six months ended September 30, 2022
Resolution

Class of shares

Amount of dividends

Dividend per
share

Funds fordividends

General shareholders’meeting(June 23, 2022)

Common stock¥1,196 million¥50.00Retainedearnings

Record date

Effective date

March 31, 2022 June 24, 2022(2) Dividends in respect of the six months ended September 30, 2022 which become payable after the balance sheet
date
Resolution

Class of shares

Amount of dividends

Dividend per
share

Funds fordividends

Record date

Effective date

Board of Directors(October 31, 2022)

Common stock¥1,675 million¥70.00Retainedearnings

September 30,
2022

December 2,
2022

Amount of dividends

Dividend per
share

Funds fordividends

Record date

Effective date

¥1,910 million¥80.00$12,769 thousand$0.53(3) Dividends paid in the six months ended September 30, 2023
Resolution

Class of shares

General shareholders’meeting(June 22, 2023)

Common stock

Retainedearnings

March 31, 2023 June 23, 2023

(4) Dividends in respect of the six months ended September 30, 2023 which become payable after the balance sheet
date

8

Resolution

Class of shares

Board of Directors(October 31, 2023)

Common stock

Amount of dividends

Dividend per
share¥1,672 million¥70.00$11,178 thousand$0.47

Funds fordividends

Record date

Effective date

Retainedearnings

September 30,
2023

December 4,2023

4. Cash Flows
Reconciliation of cash and time deposits on the consolidated balance sheets to cash and cash equivalents on the
consolidated statements of cash flows is as follows:
As of September 30,
Thousands ofdollars

Millions of yen

2022

2023

2023

Cash and time deposits¥85,000¥68,240$456,210

Marketable securities

3,335

4,235

28,312Time deposits with maturities over three months
Cash and cash equivalents(2,145)(2,412)(16,125)¥86,190¥70,062$468,391

5. Segment Information
Reportable segment information
The Group’s reportable segments are defined as individual units where independent financial information is available andwhich are subject to regular review by the Board of Directors to evaluate their results and decide the allocation ofmanagement resources. The reportable segments are summarized as follows:
Reportable segment I is a segment for which Makino Milling Machine Co., Ltd. is responsible. Its main areas are
Japan, the Republic of Korea, China, Oceania, Russia, Norway, the United Kingdom, and all other areas not included inreportable segments II, III or IV.
Reportable segment II is a segment for which MAKINO ASIA PTE LTD (Singapore) is responsible. Its main areas are
China, ASEAN and India.
Reportable segment III is a segment for which MAKINO INC. (the United States of America) is responsible. It covers
all countries in North and South America.
Reportable segment IV is a segment for which MAKINO Europe GmbH (Germany) is responsible. It covers all
countries in the European continent except Norway.
Six months ended September 30, 2022

(Millions of yen)

Total

I

II

III

IV

External customers¥21,927¥46,465¥28,727¥5,919¥103,039

Intersegment

40,016

6,952

288

10

47,267

Net sales:

Total
Segment income (loss)

61,94353,41729,015

5,929

150,307¥213¥4,517¥1,578¥(402)¥5,907

Six months ended September 30, 2023

(Millions of yen)

Total

I

II

III

IV

External customers¥25,726¥42,902¥30,726¥9,160¥108,515

Intersegment

40,598

5,766

349

0

46,714

Net sales:

Total
Segment income (loss)

66,324

48,66831,0759,160

155,229¥4,041¥2,346¥1,482¥(354)¥7,5159

Six months ended September 30, 2023

(Thousands of dollars)

Total

I

II

III

IV

External customers$171,988$286,816$205,415$61,238$725,464

Intersegment271,413

38,5472,333

0312,301

Net sales:

Total
Segment income (loss)

443,401

325,364

207,748

61,2381,037,765$27,015$15,683$9,907$(2,366)$50,240

Six months ended September 30,
Thousands ofdollars

Millions of yen

2023¥7,515261¥7,7762022¥5,907(503)¥5,403

Segment income
Elimination
Consolidated operating income

2023$50,240
1,744$51,985

6. Revenue recognition
Disaggregation of revenue from contracts with customers
Year ended September 30, 2022

(Millions of yen)

I

II

III

Total

IV

¥21,927¥45,789¥24,401¥5,919¥98,037

Goods or services transferred over time

—

675

4,326

—

5,002

Revenue from contracts with customers¥21,927¥46,465¥28,727¥5,919¥103,039

Goods or services transferred at a point in time

Year ended September 30, 2023
Goods or services transferred at a point in time

(Millions of yen)

I

II

III

¥25,726¥42,059¥25,430

IV

Total

¥9,160¥102,376

Goods or services transferred over time

—

842

5,295

—

6,138

Revenue from contracts with customers¥25,726¥42,902¥30,726¥9,160¥108,515

Year ended September 30, 2023

(Thousands of dollars)

I

III

IV

Total

$171,988$281,180$170,009$61,238$684,423

Goods or services transferred over time

—

5,629

35,399—41,034

Revenue from contracts with customers$171,988$286,816$205,415$61,238$725,464

Goods or services transferred at a point in time10II

3-19, Nakane 2-chome, Meguro-ku, Tokyo 152-8578, Japan
Phone : +81-3-3717-1151
Fax: +81-3-3725-2105
URL : http://www.makino.co.jp/