INTERIM BUSINESS REPORT
2015
December 1, 2014 to May 31, 2015

NACHI-FUJIKOSHI CORP.
Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our sincere gratitude
to our shareholders for your continued support
and patronage.
We repor t the interim results for the
NACHI-FUJIKOSHI Group for the period from
December 1, 2014 to May 31, 2015.

Business Environment
As for the business environment surrounding
the NACHI-FUJIKOSHI Group during theinterim period under review, signs of a weakeconomy were observed in some regions,
including sluggish consumption in Japan andthe slowdown in economic growth in emerging
economies such as China. Nonetheless, economic recovery proceeded at a moderatepace, supported by the continued upswing
in the economies of developed countries
led by the United States, coupled with thesteady increase in automotive production
overseas.

Business Progress and Results
Given this environment, the NACHI-FUJIKOSHI
Group worked to expand its business byplaying to the strengths of the Group as acomprehensive machinery manufacturer
that encompasses the machining, robotics,
functional parts, and materials businesses
and can provide a wide range of solutions
for our customers.
As of the previous consolidated fiscal
year, the end date of the fiscal period forour overseas subsidiaries changed from
September 30 to November 30. The following
compares the results for the interim periodwith those for the same period of the previous

year (December 2013 to May 2014), adjusted
to exclude the impacts of the aforementioned
change.
With regard to sales, as a result of ourefforts to deploy new products, to expand
the existing product range, and to find newcustomers, mainly clients in other countries,
sales for the interim period under review
totaled 107.3 billion yen, up 7.2% over thesame interim period of the previous fiscal
year. Of this, sales in the Japanese market
reached 58.2 billion yen, down 0.4% fromthe same interim period of the previous
fiscal year, while overseas sales totaled 49.1
billion yen, up 17.8%.
In terms of profitability, with the effect of
the total cost reduction efforts, such as
improvement of productivity, operating
income totaled 9.6 billion yen, up 1.2% overthe same interim period of the previous
fiscal year, ordinary income 9 billion yen, up
0.9%, and interim net income 5.7 billion
yen, up 32.3%.
We wish to forego the payment of interim
dividends for this interim period.

while having our base in the North American/ emerging markets where the mid- andlong-term growth of demand is expected.
By doing this, we will work on the expansionof merchandise and product range, thecreation of new business opportunities, andfundamental cost reform.
The company will work to improve businessresults and secure a stable profit structurewith the purpose of fulfilling our Long-Term
Vision and the Mid-Term Business Plan 2016.
I would like to express my sincerest
appreciation to all of our shareholders foryour continued support and understanding.

Future Initiatives
As for the future outlook, it is expected thatthe demand in the automotive, construction
machinery and aircraft sectors will increase,mainly in North America and emerging
markets, including China, which is believed
to contribute to steady growth in general.
The Group will continue to make improvements to our practices in each section
such as sales and services, production andprocurement, and research and development,

President andRepresentative Director

August 2015

RESULTS OF OPERATIONS (Consolidated Operating Result for Second Quarter of Fiscal 2015)
Breakdown of Net Sales
MarketBusiness Segment
Special Steels/
Industrial Furnaces
and Others Cutting Tools
8%16%
HydraulicEquipment
22%

Machine Tools
8%¥107.3
BillionRobots
10%

Energy/Infrastructure
21%

Machinery/
Retail28%

Bearings
36%

Overseas

America30%¥107.3
BillionAutomotive
51%

¥49.1
Billion

Asia, Oceania,
and Others
59%

Europe11%

Trend in Business Results
Net Sales (¥ billions)Operating Income (¥ billions)218.2■Interim■Full-year■Interim■Full-year(207.4)
18.5

175.6

172.2

(18.0)

110.9
85.1

82.8

12.3

107.3

10.6

2012

2013

2014

9.6

(9.5)
5.9

FY

10.0

(100.1)

2015

FY

2012

5.2

2013

2014

2015

*The amounts inside parentheses for FY2014 represent results excluding the impacts from the change to the end dateof the fiscal period for our overseas subsidiaries (during the two-month period of October-November 2013).

TOPICS
Expanding Overseas Markets○

We will expand our capacities for sales, services and production inoverseas markets where growth in demand is anticipated in the mid- tolong-term, including the North American and Asian markets, in order tofurther strengthen our business base.

Net Sales■ Overseas ■Domestic(¥ billions)

Forecast

200.0
Domestic
53%

Enhancement of Sales and Service Capacities■

To expand our businesses in overseas markets, we will significantly increase
the number of sales and technical personnel, promote the recruitment of local
people for executive and staff positions at our overseas subsidiaries, andexpand our showroom and presentation facilities.

100.0

0

Major distributors in overseas areas

NACHI (SHANGHAI) CO., LTD.
(China hub)○Trends in overseas sales

50.6
(38%)

69.9
(40%)

2010

2013

89.0
(43%)

105.0
(47%)

Overseas
47%

2014

2015

(Year)

Note: The sales figure for fiscal 2014 excludes the impacts
from the change in the end date of the fiscal period.

NACHI AMERICA INC.
(America hub)

NACHI EUROPE GmbH(Europe hub)

NACHI SINGAPORE PTE. LTD.
(ASEAN hub)Expansion of Production Capacities

NACHI (JIANGSU) INDUSTRIES CO., LTD.

NACHI TECHNOLOGY MEXICO S.A. DE C.V.

■

The China market■

We will expand our overseas production capacities for cutting tools, bearings, hydraulic equipment, and robots in order toswiftly meet the diverse needs of our customers.

Hydraulic equipment
for construction machinery

Automotive hydraulics

The North American market(To be completed in December 2015)

Bearings for automobiles

NACHI TOOL AMERICA INC.
(Indiana, U.S.A)

Carbide drills

Large-diameter helical broaches

3

Expansion of Merchandise and Product Range

Full-scale Entry into the Tap BusinessWe have launched on the market a new series oftaps, which are cutting tools for screw hole processing. We have achieved both stable processing
performance and significantly longer life by taking
full advantage of our seed technologies ranging
from our in-house materials development to heat
treatment, coating and shape design.
Combined with our “AQUA Drill EX Series”
carbide drills that are utilized before screw hole
processing, we offer highly accurate and highly
efficient processing to customers.

○○

We will harness our strength as a comprehensive machinery manufacturer in actively deploying new and improved products into
the market, and thereby, generate new demand and expand our businesses.

“SG and N Tap Series.” They meetthe needs of various screw hole processing.
The highly acclaimed “AQUA Drill EX Series”

Further Cultivation of the Small Robot Market
Our small robots that boast world-leading speeds andoptimal maneuverability will meet the expanding demand
for robots in the manufacturing, non-manufacturing,
service and other markets across the world.

“The world’s fastest” lightweight,
compact robots“MZ07” and “MZ04”

Complete Renovation of the Toyama Plant Exhibition SpaceWe will appeal our products to our customers through a more hands-on approach featuring demonstrations of ourdiverse automated lines for processing, assembly, and other processes, especially for robots.
The exhibition space is scheduled to be completed in October 2015.

Diagram of the new exhibition space

Double arm robot

4

FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(¥ millions)Interim 2015

Previous(as of May 31, 2015)(as of November 30, 2014)ASSETS:

Item

Interim 2015

Previous(as of May 31, 2015)(as of November 30, 2014)

LIABILITIES:Current assets
Cash and cash equivalents

129,196
25,674

127,328
23,932

Notes and accounts receivable

48,567

49,906Inventories

45,99544,345

Other

8,959

9,144

Fixed assets

139,220

128,351

Property, plant and equipment

99,31994,566

Buildings and structures

29,61929,422

Machinery and equipment

52,28946,190Other

17,41018,954950932

Intangible fixed assets
Investments and advances

38,95032,852

Total assets

268,416

255,680

Consolidated Statements of Income
Item(¥ millions)Interim 2015

Previous

Current liabilities

102,666

103,331

Notes and accounts payable

45,01547,483

Bonds and short-term bank loans

36,94932,765

Other

20,702

23,082Long-term liabilities

59,78454,779Long-term debt

34,55731,392

Net defined benefit liability

11,24011,062

Other

13,986

12,324

Total liabilities

162,451

158,111

Shareholders’ equity

87,70883,188

Common stock

16,074

16,074

Additional paid-in capital

11,561

11,561

NET ASSETS:

Retained earnings

61,22456,970△ 1,152△ 1,418

Revaluations and translation adjustments

11,945

8,357

Minority interests

6,311

6,023

Total net assets

105,965

97,569Total liabilities and net assets

268,416

255,680

Treasury stock

Consolidated Statements of Cash Flows
Item

Interim 2015(¥ millions)

Previous

December 1, 2014
to May 31, 2015

December 1, 2013
to May 31, 2014

107,357

110,907

Cash flows from operating activities

7,233

8,071

Operating income

9,683

10,076

Cash flows from investing activities△ 10,112△ 8,105

Ordinary income

9,010

9,468

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

4,452

1,103

1,540

1,396

23,46918,22925,01019,625Net sales

Extraordinary income

121

Extraordinary losses
Income before income taxes
and minority interests
Net income

20

1,244

9,002

8,225

5,700

4,736

December 1, 2014
to May 31, 2015

December 1, 2013
to May 31, 2014

SHAREHOLDER INFORMATION (As of May 31, 2015)
Number of Shares Issued: 249,193,436
23,882
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratio is calculated after
subtracting treasury stock (638 thousand shares).

Breakdown of Shareholders

ForeignInvestors
35,858 thousand(14.4%)

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

Shareholders

NACHI WANEI Stockholding
Toyota Motor Corporation
Employees’ Stock Ownership Plan
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Hokuriku Bank, Ltd.

19,231
13,182
13,172
11,888
8,659

7.74
5.30
5.30
4.78
3.48

Individuals
40,409 thousand(16.2%)
Securities
Companies
3,644 thousand(1.5%)

Stock
Ownership
Associations
39,181 thousand(15.8%)

Financial
Institutions
83,975 thousand(33.8%)
Other JapaneseCorporations
45,484 thousand(18.3%)DIRECTORS AND AUDITORS (As of August, 2015)
President andRepresentative Director

Hiroo Honma

Managing Director

Isao HoriManaging Director

Managing Director

Noriyasu Shiba
Managing Director

Director

Kazuo Tsukahara*
Director

Hidenori Hayashi

Toru Inoue

Managing Director

Director

Masayuki Kobayashi Tetsu Furusawa

Kenji Susukida

Director

Fumio Honda
Director

Tadataka Hori
Standing Corporate Auditor

Nobuo Okada

Standing Corporate Auditor

Masakazu Yamazaki*

Standing Corporate Auditor

Hiroshi Yamada
Corporate Auditor*Outside director oroutside corporate auditor.

Eiichi Fukushima*

CORPORATE OFFICERS (As of August, 2015)
Shinichi Urata

Shigeru Togashi Masatoshi Akagawa Yusaburou Nomura Tetsuo Koshihama Tsutomu Kurosawa Toru Uegaki

Hideaki Hara

Hiroshi Goto

Takihiro Hirasaki

Satoshi Hamamoto Jun Sakamoto

Akira Kunisaki

Noboru Miura

Yutaka Tsukamoto

CORPORATE INFORMATION (As of May 31, 2015)
Foundation:
Capital:Number of Employees:
Major Products:
Machinery and tools business
Components business
Other business
Major Domestic Offices and Plants:
Toyama Head Office
Tokyo Head Office

December 21, 1928
¥16 billion
2,839 (Group employees 6,409)
Cutting Tools, Forming Tools, Cutting Saws, Machine Tools, Machining Systems, Robots, Robot Systems
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]

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

NACHI AMERICA INC. NACHI EUROPE GmbH NACHI SINGAPORE PTE. LTD.
NACHI TECHNOLOGY (THAILAND) CO., LTD. NACHI (SHANGHAI) CO., LTD. NACHI (JIANGSU) INDUSTRIES CO., LTD.

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.
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.

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 is of the taps from the new“SG Tap” series, which are cutting tools
for screw hole processing.
Combined with the carbide drills used
for hole processing, these taps propose toomit processes from hole processing toscrew hole processing and help increase
productivity at processing sites.