INTERIM BUSINESS REPORT
2014
December 1, 2013 to May 31, 2014

NACHI-FUJIKOSHI CORP.
Securities Code: 6474

TO OUR SHAREHOLDERS
I hope you are in the best of spirits andrange, and to find new customers, mainly

emerging market s where the mid- andhealth as our valued shareholders.

local clients in other countries, in addition to

long-term growth of demand is expected. By

We repor t the interim results for thethe change to the fiscal term of our overseas

doing this, we will work on the expansion of

NACHI-FUJIKOSHI Group for the period

subsidiaries, sales for the interim period

merchandise and product range, the creationfrom December 1, 2013 to May 31, 2014.

under review totaled 110.9 billion yen, up

of new business opportunities, the improve-

I would like to inform you that the end

33.9% over the same interim period of thement of processes, and fundamental cost

date of the fiscal period for our overseas

previous fiscal year. Of this, sales in the Jap-

reform.

subsidiaries has been changed from Sep-

anese market reached 58.4 billion yen, up

The company will work to improve busi-

tember 30 to November 30 as of the current

15.9% from the same interim period of theness results and secure a stable profit

consolidated fiscal year. For this reason, theprevious fiscal year, while overseas sales

structure with the purpose of fulfilling ourconsolidated cumulative period of the 2014

totaled 52.4 billion yen, up 62.0%.

Long-Term Vision 2020 and the Mid-Terminterim period is only eight months, from
October 2013 to May 2014.

In terms of profitability, with the effect of
the total cost reduction efforts, such as

Business Plan 2016 that was formulated in
January 2014.

improvement of productivity, operating

I would like to express my sincerest

Business Environment

income totaled 10 billion yen, up 91.7%

appreciation to all of our shareholders for

As for the business environment surround-

over the same interim period of the previous

their continued support and understanding.

ing the NACHI-FUJIKOSHI Group during

fiscal year, ordinary income 9.4 billion yen,

the interim period under review, production

up 77.1%, and interim net income 4.7

and capital investment in the automotive

billion yen, up 109.0%.

sector has increased in Japan and overseas. In addition, some improvement has

We wish to forego the payment of interim
dividends for this interim period.

been seen in the industrial machinery andcommercial sectors, which is a sign of the

Future Initiatives

steady economic recovery.

As for the future outlook, although there is aconcern that the economy is slowing down

Business Progress and Resultsin some emerging markets, it is expected

Given this environment, the NACHI-FUJIKOSHI

that the demand in the automotive, con-Group worked to expand its business by

struction machinery and aircraft sectors will

playing to the strengths of the Group as aincrease, mainly in the North American andcomprehensive machinery manufacturer

Asian markets, which is believed to contrib-

encompassing the machining, robotics, com-ute to steady growth in general.

ponents, and materials businesses, and byPresident andRepresentative Director

The Group will continue to enhance ourproviding a wide range of solutions for ourframework and workforce in each section

customers.

such as sales and services, production andAs a result of our efforts to deploy new

procurement, and research and development,

products, to expand the existing productwhile having our base in the North American /August 2014

RESULTS OF OPERATIONS (Consolidated Operating Result for Second Quarter of Fiscal 2014)
Breakdown of Net Sales
By Market

By Operation
Special Steels/
Industrial Furnaces
and Others Cutting Tools
8%15%
HydraulicEquipment
Machine Tools
20%10%¥110.9BillionRobots8%

Energy/Infrastructure
19%

Machinery/
Retail28%

Bearings
39%

Overseas¥110.9BillionAutomotive
53%

Asia, Oceania,
andthe Middle East
56%

America29%¥52.4
BillionEurope15%

Trend in Business Results
Net Sales (¥ billions)Operating Income (¥ billions)■Interim■Interim■Full-year

175.6

172.2

166.0

■Full-year

14.6
12.3

110.9
78.9

FY

2011

85.1

10.6
7.1

2012

10.0

82.8

2013

2014

FY

2011

5.9

2012

5.2

2013

2014

TOPICS
Expanding Business in the Growing Market
We will focus our investment of management resources for production, sales and services on the growing
market, including in North America and Asia, where the mid- and long-term growth of demand can be
expected, in order to further strengthen our business base.

Further Cultivation of the North American Market
As manufacturing is returning to North America, we will expand our production in North America in order to capture the robust local demand.

Local Production of Bearings
Will Start in Mexico

Started the Local Productionof Broaches

The automotive industry has been
integrated in Mexico, and the country
is expected to continue its economic
growth. We will start preparation forthe local production of bearings in
Mexico.
Roller bearings forconstant velocity joints

NACHI TOOL AMERICA INC.
Due to the increase of the number ofgears in automatic transmission (AT),the demand for broaches is increasingin North America. We will start the local
production of broaches in North America, aiming to expand our market share.

Bearings for transmissions

Sales Offices
Manufacturing / Service Plants

Large-diameter helical broach formachining the gears for automotive transmissions

Enhancing the Production Capacity in the Emerging Market
We will enhance our production capacity of bearings for automobiles, hydraulic equipment for construction / industrial machines, automotive
hydraulics, and robots to meet the increasing local demand, in accordance with the “local production for local consumption” concept.

The China market

NACHI (JIANGSU) INDUSTRIESCO., LTD.

The ASEAN market

NACHI TECHNOLOGY (THAILAND)
CO., LTD.

The India market

NACHI KG TECHNOLOGY INDIA
PTE. LTD.

Expansion of Products
Development of the Market for the Robots
for Industrial Machinery
For the purpose of expanding the market
for the robots for industrial machinery, inwhich the needs for automation ofassembly and transportation tasks isincreasing, we have launched the world’s
fastest lightweight, compact robot,
MZ07, simultaneously
worldwide. We will strengthen “The World’s Fastest”
Lightweight,
our sales and service structure
Compact Robot
inside and outside Japan.
“MZ07”

Establishment of a New Robot Technical Center

Our first robot technical center opened in Shanghai. We will
promote ef for ts to improve customer satisfaction andincrease sales orders.

Expansion of Carbide Drill Lineup
A new lineup of the small-diameter drills has been added to the highly acclaimed AQUA Drill EX series. It willmeet the need for more accurate drilling of small-diameter, deep holes, and for longer service life of drills.

Improvement of the Performance ofEnergy-saving Hydraulic Unit

AQUA Drill EX Oil-Hole Long

“Power Meister”

A new type of Power Meister, which is ideal as the driving
source of all kinds of machine tools and press machines,
has been deployed to the market. In addition to improving
the accuracy and quality, we have succeeded in reducing
the weight and size, as well as increasing the energy
efficiency.

Contributing to the Fast and Safe Operation of Hokuriku Shinkansen Line
Bearings for railway cars

In spring 2015, the Hokuriku Shinkansen Line will
start operation, linking Tokyo and Toyama / Ishikawa
Prefecture.
In addition to the improvement of design and comfort of the railway cars, the convenience of transportation will be significantly improved, reducing the travel
time between Tokyo and Toyama to a minimum of twohours and seven minutes.
With the integrated manufacturing, from raw material
to finishing, we provide reliable quality that contributes
to the safe operation of Hokuriku Shinkansen Line.

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(¥ millions)Interim 2014

Previous(as of May 31, 2014)(as of November 30, 2013)ASSETS:

Item

Interim 2014

Previous(as of May 31, 2014)(as of November 30, 2013)

LIABILITIES:Current assets
Cash and cash equivalents

111,485
20,040101,135
18,591

Notes and accounts receivable

45,65739,896Inventories

39,32335,448

Other

6,464

7,199

Fixed assets

109,916

106,780

Property, plant and equipment

85,67082,354

Buildings and structures

28,56128,803

Machinery and equipment

39,91638,472

17,192

Other

811

Intangible fixed assets

15,078716

Investments and advances

23,43423,709Total assets

221,402207,916

Consolidated Statements of Income
Item(¥ millions)Interim 2014

Interim 2013

Current liabilities

89,72079,292

Notes and accounts payable

43,12038,918

Bonds and short-term bank loans

28,421

23,795

Other

18,178

16,579Long-term liabilities

46,66047,263

Bonds and long-term debt

30,141

31,328

Allowance for retirement benefits

6,849

6,626

Other

9,669

9,308

136,381

126,556

Shareholders’ equity

79,19975,964

Common stock

16,074

16,074

Additional paid-in capital

11,561

11,561Retained earnings

51,772

48,527

Total liabilities

NET ASSETS:

Treasury stock

△ 208

△ 199

Revaluations and translation adjustments

1,207

1,157

Minority interests

4,612

4,238

Total net assets

85,02081,360Total liabilities and net assets

221,402207,916

Consolidated Statements of Cash Flows
Item

Interim 2014(¥ millions)Interim 2013

December 1, 2013
to May 31,2014

December 1, 2012
to May 31,2013

Net sales

110,90782,834

Cash flows from operating activities

8,071

12,455

Operating income

10,076

5,257

Cash flows from investing activities△ 8,105△ 6,188

Ordinary income

9,468

5,346

Cash flows from financing activities
Net decrease in cash
and cash equivalents
Cash and cash equivalents
at beginning of the year
Cash and cash equivalents
at end of the year

1,103
1,396

8,457
16,04918,22915,761

19,62531,811

Extraordinary income
Extraordinary losses
Income before income taxes
and minority interests
Net income

1

396

1,244

1,149

8,225

4,592

4,736

2,266

December 1, 2013
to May 31,2014

December 1, 2012
to May 31,2013

SHAREHOLDER INFORMATION (As of May 31, 2014)
Number of Shares Issued: 249,193,436
23,933
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratio is calculated after
subtracting treasury stock (610 thousand shares).

Breakdown of Shareholders

Individuals
40,353 thousand(16.3%)

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

Shareholders

NACHI WANEI Stockholding
Employees’ Stock Ownership Plan
Toyota Motor Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Master Trust Bank of Japan, Ltd. (holder of trust units)

18,93913,292
13,182
11,888
9,527

7.62
5.35
5.30
4.78
3.83

Securities
Companies
1,685 thousand(0.7%)DIRECTORS AND AUDITORS (As of August, 2014)
President andRepresentative Director

Financial
Institutions
87,775 thousand(35.3%)
Other JapaneseCorporations
46,343 thousand(18.6%)CORPORATE OFFICERS(As of August, 2014)

Managing Director

Director

Hiroo Honma

Kenji Susukida

Hideo Oba*Managing Director

Yukihiko Tanaka

Managing Director

Kazuhito Yoshida

Masayuki Kobayashi

Managing Director

Managing Director

Katsumi Nishijima

Noriyasu Shiba

Isao HoriManaging Director

Managing Director

Naoshi Katayama

Stock
Ownership
Associations
39,014 thousand(15.7%)

ForeignInvestors
33,411 thousand(13.4%)

DirectorStanding Corporate Auditor

Corporate Officer

Shinichi Urata

DirectorStanding Corporate Auditor

Hiroshi Yamada

Fumio Honda

Director

Corporate Auditor

Atsushi Umezawa

Director

Tetsu Furusawa

Eiichi Fukushima**Outside director or outside corporate auditor.

CORPORATE INFORMATION (As of May 31, 2014)
Foundation:
Capital:Number of Employees:
Major Products:
Machining business
RobotsComponents
Materials & Heat Treatment
Major Domestic Offices and Plants:
Toyama Head Office
Tokyo Head Office

Corporate Officer

Kiyoshi Meguro

Atsushi Saguchi*

Toru Inoue

Hidenori Hayashi

Standing Corporate Auditor

Nobuo Okada

Corporate Officer
Corporate Officer

Corporate Officer

Tadataka Hori
Corporate Officer

Shigeru Togashi
Corporate Officer

Hiroshi Goto

Corporate Officer

Masatoshi Akagawa

Corporate Officer

Hideaki Hara

December 21, 1928
¥16 billion
2,822 (Group employees 6,270)
Cutting Tools, Forming Tools, Cutting Saws, Machine Tools, Machining Systems
Robots, Robot Systems, Electronic Equipment
Bearings, Hydraulic Equipment, Automotive Hydraulics, Seismic Isolation Systems, Filtration Systems
Special Steels, Coating, Industrial Furnaces
1-1-1, Fujikoshi-Honmachi, Toyama 930-8511, Japan
Shiodome Sumitomo Bldg. 17F, 1-9-2, Higashi-Shinbashi, Minato-ku, Tokyo 105-0021, Japan

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

Eastern Japan Main BranchCentral Japan Main BranchWestern Japan Main Branch

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

Toyama Plant

1-1-1, Fujikoshi-Honmachi, Toyama 930-8511, Japan[Cutting Tools / Machine Tools / Bearings / Robots]
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. NACHI EUROPE GmbH NACHI SINGAPORE PTE. LTD.
NACHI TECHNOLOGY（THAILAND）
CO., LTD. NACHI (SHANGHAI) CO., LTD. NACHI (JIANGSU) INDUSTRIES CO., LTD.

Higashi-Toyama Plant
Namerikawa Plant
Major Overseas Offices and Plants:

INVESTOR INFORMATION
Securities Code:Fiscal Year:
Ordinary General Meetingof Shareholders:Record Date:

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

Voting rights at General
Meeting of Shareholders November 30
Year-end dividend
November 30
Interim dividend
May 311,000 shares
Unit:
Shareholders’ Register Custodian/ 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)
Inquiries:
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, foolproof, andconvenient way to receive dividends.
Please choose from the following three methods for receiving dividends throughtransfer to the shareholder’s account.
Designation by Specific Stock: Assigning an account that the shareholder has withbanks, etc. for each category of stock and receiving dividends through suchaccounts.
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.)
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.)

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.

2. Questions regarding Payments of Accrued Dividends and Other General Administrative Matters regarding Shares

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

The Cover Photograph
The cover photograph captures an image of a bearing
for railway cars used for the Hokuriku Shinkansen Linethat will start operation in spring 2015.
Ever since it was used for the first 0 series trainsof the Tokaido Shinkansen Line in 1964,
it has been supporting the safe operation of Shinkansens.