INTERIM REPORT
2022
December 1, 2021 to May 31, 2022

Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our sincere gratitude to our shareholders foryour continued support and patronage.
We hereby report the results for the NACHI-FUJIKOSHI Group for theperiod from December 1, 2021 to May 31, 2022.

Business Environment

The operating environment for the group during the interim period
generally continued to see a gradual recovery, as economic activity
continued to normalize, and the economies of developed nations such as
Japan and Western countries continued to recover. Nevertheless, theJapanese economic outlook remains uncertain due to factors such as theimpact of automotive production cutbacks due to semiconductor
shortages, COVID-19 lockdowns of cities in China, prolongation of theUkraine crisis, and sharp price rises for raw materials and energy
accompanying the rapid depreciation of the yen.

Business Progress and Results

Under these circumstances, the NACHI-FUJIKOSHI Group has been
making full use of its streng th as a comprehensive machiner ymanufacturer while taking into account major industrial structuralchange s in the me dium to long term such as the shif t toward
decarbonization and increased adoption of EVs. The group is leveraging
its strengths in the robotics business, as well as the cutting tools,
machine tools, bearings, hydraulic equipment, and special steelbusinesses to realize the expansion of orders and sales by developing
new products and offering technical proposals that contribute to users’
manufacturing. We have also been proceeding with structural reform
across our overall business, including reorganization and streamlining ofour plants around the world, and the expansion of in-sourcing ofmanufacturing so as to respond to changes in demand, aiming toimprove profitability.
Despite factors such as production adjustments in the automotive
sector, consolidated net sales in the interim period reached 122.0 billion
yen (increase 9.0% YoY), due to the recovery and expansion of demandin the construction machinery, industrial machinery, and retail sectors.
This includes domestic sales of 60.5 billion yen (increase 5.6% YoY) andoverseas sales of 61.5 billion yen (increase 12.5% YoY). In terms ofprofitability, profits increased as a result of the passing on of raw
materials price increases to sales prices, improved productivity fromautomation and streamlined operations of production lines, efforts toreduce procurement costs, and the weakening yen exchange rate,
alongside improved capacity utilization through increased sales andmanufacturing. As a result, this term’s operating income, ordinary
income, and quarterly net income attributable to the parent company
shareholders were 8.1 billion yen (increase 25.9% YoY), 8.7 billion yen(increase 34.8% YoY), and 5.8 billion yen (increase 30.3% YoY)
respectively.

We wish to defer the payment of interim dividends for this interimperiod.

Future Initiatives

Regarding the outlook for the business environment, demand in theindustrial machinery, construction machinery, and commercial sectors
are all expected to grow, and a moderate recovery is also expected in theautomotive sector. On the other hand, our group’s business environment
is changing drastically, including the acceleration of initiatives for theadoption of EVs toward carbon neutrality in the automotive field, which is
our company’s main area of business, and business reorganization, as
well as the continued digital transformation of manufacturing, and theneed to respond tosocial and environmental challenges such as theSDGs
The NACHI-FUJIKOSHI Group will leverage its unique strengths
possessing diverse business, technological, and manufacturingknowhow, including those related to robotics, and will create new
business opportunities. We will strengthen all aspects of sales ands er vice s, manufacturing and pro curement, and re s e arch anddevelopment, with a focus on overseas markets with significant growthpotential. We will catch market movements and needs to promote salesof products and services that cooperate and integrate technologies of all
our departments, and strive to further enhance our performance byimproving productivity from automation and streamlining. Furthermore,with the goal of achieving sustainable business growth, we will commit tochallenges such as the environment, society, and governance.
We would like to express our sincerest appreciation to all of ourshareholders and other stakeholders for their continued support.
August 2022

Chairman andRepresentative Director

President andRepresentative Director

RESULTS OF OPERATIONS (Consolidated Operating Result for Six Months Ended May 31, 2022)
Composition of Sales
Business Segment

MarketSpecial Steels/
Industrial Furnaces
Cutting Tools
and Others
14%
Automotive
6%
Hydraulics
Machine Tools
4%9%
HydraulicEquipment
21%

ASEAN, etc.
14%

Retail15%
Construction
Machinery
15%

Robots13%¥122.0BillionRegion¥122.0BillionChina
18%

Automotive
44%

Japan
50%

Europe6%
Americas12%

Machinery
26%

Bearings
33%¥122.0Billion

Trend in Business Results■Interim■Full-year

Net Sales (billion yen)
249.0

229.1

■Interim■Full-year

Operating Income (billion yen)(250.0)201.0(17.0)
14.7
127.1
103.7

112.013.3

122.0

8.1

7.4

6.8

6.4

2.6

FY

2019

2020

2021

2022

FY2019

2020

2021

2022

TOPICS
1. Develop the potential demand of the industrial machinery sector
We will cultivate new demand in the electrical, electronic and general industrial machinery fields, where demand is expected
to expand, and bring new products to market.
Expansion and enhancement of lineup of compact
rob ot s to me et demand fo r gre ater sp e ed andprecision, and launch of one of the world’s smallest
controllers“MZ F Series” of high-speed, high-precision small robots/“CFDq” ultra-compact controllers

M a r ke t laun ch of n e w e n e r g y - s a vin g hyd r aulicequipment for industrial machinery such as machine
tools and forging machinery, for which demand is robust

Energy saving solenoid valve

High pressure variable
volume piston pump

2. Expanding adoption to EVs
We have expanded adoption of our products to EV motors, reduction gears, electric compressors, and parts used in lockmechanisms. We will also expand sales of robots, robot systems, machine tools, and other products used in EV productionfacilities.

Ball screw support bearings

Actuator(Used in parking lock mechanisms)

Spot welding robots(Used in the machining of EV bodies, etc.)

ESG Initiatives

Precision roll forming machines(Used in the machining ofEV components, etc.)

Initiatives toward carbon neutrality
We offer products that meet the energy-saving and environmental conservation-related
needs of our customers, with a focus on hydraulic and other equipment.
As part of our efforts to convert to renewable energy, we have installed a solar power
generation system on the roof of the No. 3 Robot Factory at the Toyama Plant, and aredeveloping such systems at other plants.
We are also pursuing the consolidation and more efficient operation of production
facilities, the conversion of liquid fuel into gas and electricity, and a transition to LED
lighting fixtures.

The solar power generation systemon the roof of the No. 3 Robot Factory3. Strengthening sales in overseas markets
Towards achieving an overseas sales ratio 60%, we will work to expand sales of high performance HSS drills, precision
bearings for industrial machinery, hydraulic equipment for construction machinery, robots, and other products for which
local needs are increasing, especially in China and Western countries, where there is significant potential for expansion.

High performance HSS drills(Used widely in the industrial machinery andelectrical and electronic sectors)

Hydraulic equipment for
construction machinery

Bearings for ball screw supports
for industrial machinery

4. Strengthening our manufacturing system domestically and overseas
We have boosted local production capacity in China and other countries where demand is growing. Additionally, a new plant
producing standard radial bearings in Thailand is in full operation.
Based on the concept of local production for local consumption, we will build a highly competitive production systemthrough the promotion of intensive production at the optimal locations worldwide, automation, and streamlining.

NACHI (JIANGSU) INDUSTRIES CO., LTD. (China)(Increased production of hydraulic equipment,precision bearings, robots, and other products in China)

Standard radial bearing

New factory in Thailand

Social contribution
We are working to promote diversity and contribute to society through such efforts as
training technical personnel at Fujikoshi Technical High School, accepting local children at
the Fujikoshi Ajisai Preschool, and providing COVID-19 vaccinations at Fujikoshi Hospital.

Strengthening our corporate governance system
We were listed on the Tokyo Stock Exchange’s new Prime Market following its market
restructuring in April 2022. We will continue to strengthen our governance framework andstrive to enhance our corporate value.

Fujikoshi Hospital

4

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(million yen)(million yen)

November 30, 2021
(for your reference)

May 31, 2022ASSETS:

Item

November 30, 2021
(for your reference)

May 31, 2022

LIABILITIES:
159,258

165,151

Cash and cash equivalents

41,771

33,401

Notes and accounts receivable

55,100—Notes and accounts receivable, and contract assets—

59,703Current assets

Inventories

57,381

Current liabilities

103,344

106,439

Notes and accounts payable

47,82649,359

Short-term loans

29,20832,402Other

26,30924,677Long-term liabilities

77,75577,391Long-term debt

56,26654,577

66,892

Allowance for retirement benefits

9,754

9,702

Other

11,734

13,111

Total liabilities

181,100

183,830

Other

5,005

5,153

Fixed assets

160,053

167,193

Property, plant and equipment

114,260

120,733

Shareholders’ equity

119,427

123,223

Buildings and structures

29,254

31,492

Common stock

16,074

16,074

Additional paid-in capital

11,401

11,401

NET ASSETS:

Machinery and equipment

63,811

69,093Retained earnings

96,875

100,351

Other

21,194

20,146

Treasury stock‒ 4,924‒ 4,604

Revaluations and translation adjustments

10,676

17,942

Non-controlling interests

8,107

7,349

Total net assets

138,211

148,514

Total liabilities and net assets

319,312332,345

Intangible fixed assets

2,861

3,154

Investments and advances

42,93143,305

Total assets

319,312332,345

Consolidated Statements of Income
Item

Net sales
Operating income
Ordinary income
Extraordinary income
Extraordinary losses
Quarterly income before income
taxes and minority interests
Quarterly net income attributableto owners of the parent(million yen)

Consolidated Statements of Cash Flows(million yen)

Six Months Ended
May 31, 2021

Six Months Ended
May 31, 2022

112,047

122,092

Cash flows from operating activities

20,698

3,980

6,435

8,100

Cash flows from investing activities‒ 5,564‒ 10,775

6,505

8,769

Cash flows from financing activities
Net decrease in cash
and cash equivalents
Cash and cash equivalents
at beginning of period
Cash and cash equivalents
at end of period‒ 16,500‒ 3,421‒ 368‒ 8,688

38,93640,37438,56831,685

347

282

111

153

6,741

8,897

4,474

5,830

Item

Six Months Ended
May 31, 2021

Six Months Ended
May 31, 2022

SHAREHOLDER INFORMATION (As of May 31, 2022)
24,919,343
Number of Shares Issued:
18,139Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratios are calculated after
subtracting treasury stock (836 thousand shares).

Breakdown of Shareholders
ForeignCorporations
3,238 thousand(13.5%)
Individuals
3.569 thousand(14.8%)

Number of shares Shareholding ratio
held (thousand)(%)

Shareholders

NACHI WANEI Stockholding
The Master Trust Bank of Japan, Ltd. (trust accounts)
Employees’ Stock Ownership PlanMUFG Bank, Ltd.
Nachi Distributor Stock Ownership Association

2,450
2,220
1,459
1,188
890

10.18
9.22
6.06
4.94
3.70

FinancialInstitutions
8,557 thousand(35.5%)

Other JapaneseCorporations
3,029 thousand(12.6%)

Securities Companies
123 thousand(0.5%)DIRECTORS AND AUDITORS (As of August 2022)
Chairman and
Representative Director

Director

Hiroo Honma

Managing Director

Hideaki Hara

Kyo Kitayama

President andRepresentative Director

Director

Tetsuo Koshihama

Jun Sakamoto
Executive
Vice President

Hidenori Hayashi

Director

Tetsu Furusawa
Director

Director

Shuichi Hirose

Akira Kunisaki

Director

Kazuyoshi Ichikawa

StockOwnership
Associations
5,563 thousand(23.1%)

Director

Director

Director

Director

Yuichi Sawasaki
Tsutomu Kurosawa

Junichi Kodama*Standing Corporate Auditor

Masayuki Kobayashi

Standing Corporate Auditor

Yo Okabe*

Director

Masashi Hori

Standing Corporate Auditor

Hiroyuki Ushimaru

Masakazu Yamazaki*

Director

Corporate Auditor

Noboru Miura

Tokuhiro Matsunaga**Outside director or outside corporate auditor.

CORPORATE INFORMATION (As of May 31, 2022)
Foundation:
Capital:Number of Employees:
Major Products:
Machinery and tools business
Components business
Other business
Major Domestic Offices and Plants:
Head OfficeToyama Plant
Eastern Japan Main BranchCentral Japan Main BranchWestern Japan Main Branch
Higashi-Toyama Plant
Namerikawa Plant
Major Overseas Offices and Plants:December 21, 1928
¥16 billion
3,337 (Group employees 7,297)
Cutting Tools, Forming Tools, Cutting Saws, Machine Tools, Machining Systems, Robots, Robotics Systems
Bearings, Hydraulic Equipment, Automotive Hydraulics
Special Steels, Coating, Industrial Furnaces
Shiodome Sumitomo Bldg. 17F, 1-9-2, Higashi-Shinbashi, Minato-ku, Tokyo 105-0021, Japan
1-1-1, Fujikoshi-Honmachi, Toyama 930-8511, Japan(Cutting Tools / Machine Tools / Bearings / Robots)

Tel:+81-3-5568-5111+81-76-423-5111

Shiodome Sumitomo Bldg. 17F, 1-9-2, Higashi-Shinbashi, Minato-ku, Tokyo 105-0021, Japan
Nachi Nagoya Bldg. 2-120-3, Takayashiro, Meitou-ku, Nagoya 465-0095, Japan
Sumitomo Nakanoshima Bldg. 5F, 3-2-18, Nakanoshima, Kita-ku, Osaka 530-0005, Japan
3-1-1, Yoneda-machi, Toyama 931-8511, Japan (Special Steels) / 3-2-1, Nakada, Toyama 931-8453, Japan (Hydraulic Equipment)
176, Ogake, Namerikawa 936-0802, Japan (Hydraulic Equipment / Automotive Hydraulics / Coating / Industrial Furnaces)
NACHI AMERICA INC. (U.S.A.) NACHI EUROPE GmbH (Germany) NACHI-FUJIKOSHI (CHINA) CO., LTD.
NACHI (JIANGSU) INDUSTRIES CO., LTD. (China) NACHI TECHNOLOGY（THAILAND）
CO., LTD. (Thailand)
NACHI SINGAPORE PTE. LTD. (Singapore)

INVESTOR INFORMATION
Securities Code:Fiscal Year:

6474
From Dec. 1 of each year to Nov. 30 of
the following year

Timing of Ordinary General
February
Meeting of Shareholders:Annual General Meeting of Shareholders on November 30
Record Date:
Year-end dividend on November 30
Interim dividend on May 31
100 shares
Unit:
Shareholder registry administrator/ 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, 100-8233, Japan
Administrator for Special Accounts: Sumitomo Mitsui Trust Bank, Limited
2-8-4, Izumi, Suginami-ku, Tokyo 168-0063, Japan
Administrative Office/Sumitomo Mitsui Trust Bank, Limited
Mailing Address:
Stock Transfer Agency Department
Toll-free: 0120-782-031 (Toll-free in Japan)
Inquiry contact:
http://www.nachi-fujikoshi.co.jp/eng/
URL:

Notice regarding the Transfer of Dividends to the Shareholder’s AccountWe recommend transfer to the shareholder’s account as a safe, secure, andconvenient way to receive dividends.
Please choose from the following three methods for receiving dividends throughtransfer to the shareholder’s account.
Allocation by Proportion of Shares: Receiving dividends through accounts that theshareholder has with securities firms. (A shareholder who does not have an
account at a securities firm may not use this method.)
Registration of a Single Account for Receiving Dividends: Receiving dividends for
all categories of stock that the shareholder owns through a single account thatthe shareholder has with banks, etc. (An account with the Japan Post Bank may
not be designated for this purpose.)
Designation by Specific Stock: Assigning an account that the shareholder has withbanks, etc. for each category of stock and receiving dividends through suchaccounts.

Procedures regarding Shares
1. Notification regarding Designation of the Method for Receiving Dividends; thePurchase of Additional Shares or Buyback of Holdings Less Than the Minimum
Trading Unit; Change of Address, Name, etc.; and Request for Stock Transfers
between Accounts
Please notify the securities company with which you have your account. For thoseshareholders who do not have an account with a securities company and who have
set up a special account instead, please notify Sumitomo Mitsui Trust Bank,
Limited which is the account administrator for special accounts.

The Cover Photograph

2. Questions regarding Payments of Accrued Dividends and Other General Administrative Matters regarding Sharesprovide overwhelmingly longer life performance

Please contact Sumitomo Mitsui Trust Bank, Limited which administers theshareholders registry.

This is the ZT Forming Tap, used for machining
internal threads.
Newly developed materials, shapes, and coatingsand higher precision, contributing to customer
productivity enhancement.