INTERIM REPORT
2023
December 1, 2022 to May 31, 2023

Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our sincere gratitude to our shareholders for yourcontinued support and patronage.
We report the interim results for the NACHI-FUJIKOSHI Group for theperiod from December 1, 2022 to May 31, 2023.

Business Environment

The operating environment for the group during the interim period
continued to moderately recover in general, although weaknesses wereseen in some regions and industries. Nevertheless, although the impact ofautomotive production cutbacks due to semiconductor shortages is easing,the Japanese economic outlook remains uncertain due to factors such as
the prolonged situation in Ukraine, persistently high prices for raw materials
and energy, global inflation, and concerns of an economic recession due torising policy interest rates in various countries.

Business Progress and Results

Under these circumstances, the NACHI-FUJIKOSHI Group has been
making full use of its strength as a comprehensive machinery manufacturer
while taking into account major industrial structural changes in the medium
to long term, such as the shift toward decarbonization and increased
adoption of EVs. The group is leveraging its strengths in the cutting tools,
machine tools, robotics, bearings, hydraulic equipment, and special steelbusinesses to realize the expansion of orders and sales by developing new
products and of fering 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 of
manufacturing so as to respond to changes in demand, aiming to improve
profitability.
As a result of the above, despite factors such as the impact of
production adjustments in some areas of the automotive and construction
machinery sectors, consolidated net sales in the interim period reached135.264 billion yen (increase 10.8% YoY), due to the strong demand in theindustrial machinery and retail sectors and in particular due to expanded
sales of robots in Nor th America and China and the recover y andexpansion of demand for machine tools and bearings, etc. in response to arecovery in equipment demand. This includes domestic sales of 61.211
billion yen (increase 1.0% YoY) and overseas sales of 74.053 billion yen(increase 20.4% YoY).
In terms of profitability, alongside improved capacity utilization throughincreased sales and manufacturing, we have worked on transferring raw
material price increases onto sales prices, automating and streamlining theoperations of production lines, and reducing procurement costs, and theyen exchange rate is also weakening. However, due to an increase in fixed
costs and the impact of soaring raw material and energy prices that havecontinued from the previous fiscal year, this term’s operating income was
7.612 billion yen (decrease 6.0% YoY). Ordinary income was 7.047 billion
yen (decrease 19.6% YoY) due to foreign exchange losses and an increase
in interest payments during the period, and quar terly net income
at tributable to the parent company shareholders was 4.727 billion
yen(decrease 18.9% YoY).
We wish to defer the payment of interim dividends for this interim period.

Future Initiatives

Regarding the outlook for the business environment, while the outlook
remains difficult to predict, for the automotive sector, which is our group’s
main area of business, we expect a gradual recovery in automotive
production due to the resolution of the global semiconductor shortage andissues with the supply of components. Furthermore, we expect continued
high levels of demand in the industrial machinery and commercial sectors.
On the other hand, the business environment is changing drastically,
including the acceleration of initiatives for the adoption of EVs and businessrestructuring toward carbon neutrality in the automotive sector, thecontinued digital transformation of manufacturing including the industrial
machinery sector, and the need to respond to social and environmental
challenges such as the SDGs.
The NACHI-FUJIKOSHI Group, in order to respond to these majorchanges in the structure of industry, will develop new products andservices that coordinate and integrate its diverse business, technological,
and manufacturing methods, including those related to robotics, with theaim of transitioning towards a business structure centered on the EV andindustrial machinery sectors, and will strive to further improve our businessperformance amidst the changing environment. Furthermore, with the goalof achieving sustainable business growth, we will commit to challenges
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 2023

Director,
Chairman

Representative Director,
President

RESULTS OF OPERATIONS (Consolidated Operating Result for Six Months Ended May 31, 2023)
Composition of Sales
Business Segment

MarketSpecial Steels/
Industrial Furnaces
Cutting Tools
and Others
13%
Automotive
6%
Hydraulics
Machine Tools
5%
7%
Hydraulic¥135.2Equipment
RobotsBillion20%
17%

RegionRetail12%
Energy/Infrastructure
19%

ASEAN, etc.
15%¥135.2
BillionChina
19%

Automotive
48%

Europe6%Machinery
21%

Bearings
32%¥135.2
BillionJapan
45%

Americas15%

Trend in Business Results■Interim■Full-year

Net Sales (billion yen)
258.0

229.1

■Interim■Full-year

Operating Income (billion yen)(270.0)

201.0

17.0

103.7

112.0

122.0

(16.5)

14.7

135.2

8.1
6.8

6.4

7.6

2.6

FY

2020

2021

2022

2023

FY

2020

2021

2022

2023

TOPICS
Leading innovations in manufacturing using world-class technologies with robotics at its core・As a comprehensive machinery manufacturer that adroitly perceives market trends and needs, and develops a diverse arrayof businesses, including robotics, we develop world-class products and technologies to strengthen our business foundationin growing markets such as the EV and industrial machinery sectors.
・We will contribute to our customers’ the product and manufacturing innovations by making every possible improvement inproduction efficiency and quality of products and by providing our customers with production systems and operating
methods as solutions.

RobotsTools & Machinery

Components

Materials

1. Capturing Demand for EVs
We have expanded adoption of our products to EV motors and reduction gears.
We will also expand sales of robots, tools, and machine tools used in EV production.

Thin-walled, deep-groove ballbearings for electrical units

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

Forming Rack
Precision roll forming machines(Used in the machining of EV components, etc.)

2. Develop the potential demand of the industrial machinery sector
We are working to capture growing demand in the industrial machinery field by producing a diverse array of products
such as robot systems in response to automation needs, carbide drills, and environmentally friendly products whichhave become increasingly necessary to support carbon neutrality.

“MZ F Series” of high-speed, high-precision small robots(Contributing to automation in a wide range of industries)

AquaREVO Drills(Widely used for industrial machinery)

Energy saving solenoid valve(Used in machine tools and forging machines, etc.)

3. Strengthening our manufacturing system
We started operation of a new plant in Japan to expand our business in the construction machinery sector.
Additionally, we have improved production of carbide drills in North America and of high performance HSS drills in
China. We will aim for further growth by steadily capturing rising demand.

NACHI TOOL AMERICA INC.

Carbide drills

NACHI (JIANGSU) INDUSTRIES CO., LTD.

High performance
HSS drill

New hydraulic traveling motor plant○

Hydraulic traveling motor

Opening of the Hydraulic DIGITAL PLATFORM
We opened the “Hydraulic DIGITAL PLATFORM” on
our website to expand sales of hydraulic equipment.

Note : Currently only Japanese version

The platform lets customers simulate hydraulicunits and also introduces hydraulic equipment
products. Through this platform, we are aiming
to improve convenience for our customers andto increase the market share of our products.

4

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

November 30, 2022
(for your reference)

May 31, 2023

ASSETS:

Item

November 30, 2022
(for your reference)

May 31, 2023

LIABILITIES:Current assets

187,363

187,774

Other

125,072
24,96730,093
41,12328,88776,01853,703
9,533
12,780122,886
20,962
27,77845,76928,376
77,24854,451
9,280
13,516

Total liabilities

201,090

200,135

Current liabilities
Notes and accounts payable

Cash and cash equivalents

36,042

34,238Notes and accounts receivable

60,36560,090

Short-term loans

Electronically recordedmonetary claims-operating

7,600

7,487

Long-term liabilities

Inventories

76,91979,558

Other

6,435

6,399

Fixed assets

170,094

171,028

Property, plant and equipment

123,508

125,049

Shareholders’ equity

128,349

129,609

Buildings and structures

31,32133,366

Common stock

16,074

16,074

Additional paid-in capital

11,408

11,408

Electronically recorded obligations-operating
Other
Long-term debt
Allowance for retirement benefits

NET ASSETS:

Machinery and equipment

71,782

71,201Retained earnings

106,758

108,832

Other

20,404

20,480Treasury stock– 5,892– 6,706

Revaluations and translation adjustments

20,55622,318Non-controlling interests

7,460

6,739

Total net assets

156,367

158,667

Total liabilities and net assets

357,457

358,802

Intangible fixed assets

3,497

3,202

Investments and advances

43,08842,776

Total assets

357,457

358,802

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, 2022

Six Months Ended
May 31, 2023

122,092

135,264

Cash flows from operating activities

3,980

902

8,100

7,612

Cash flows from investing activities‒ 10,775‒ 8,278

8,769

7,047

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‒ 3,4215,521‒ 8,688‒ 1,41240,37434,754

31,68533,342

282

41

153

42

8,897

7,046

5,830

4,727

Item

Six Months Ended
May 31, 2022

Six Months Ended
May 31, 2023

SHAREHOLDER INFORMATION (As of May 31, 2023)
24,919,343
Number of Shares Issued:
17,486
Number of Shareholders:Major Shareholders (top five):

Breakdown of Shareholders

Note: Shareholding ratios are calculated after
subtracting treasury stock (1,463 thousand shares).

Foreign
Corporations
3,511 thousand(15.0%)

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

Shareholders

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

2,564
1,867
1,461
930
925

10.93
7.96
6.23
3.97
3.94

Individuals
4,319 thousand(18.4%)

Other JapaneseCorporations
2,909 thousand(12.4%)MANAGEMENT STRUCTURE (As of August 2023)
Director,
Chairman

Hiroo Honma

Director,
Managing Corporate Officer

Tetsu Furusawa

Yo Okabe*

Representative Director,
President

Director,
Managing Corporate Officer

Director (Full-time Member of the
Audit & Supervisory Committee)

Akira Kunisaki
Shuichi Hirose

Director

Tsutomu Kurosawa

Yuichi Sawasaki

Masayuki Kobayashi

Director,
Vice President

Director,
Managing Corporate Officer

Director (Member of the Audit &Supervisory Committee)

Hidenori Hayashi

Hiroyuki Ushimaru

Director,
Managing Corporate Officer

Hideaki Hara

Masakazu Yamazaki*

Director (Member of the Audit &Supervisory Committee)

Yasuaki Sawachika*

Director (Member of the Audit &Supervisory Committee)

Emi Goto*

Corporate Officer

Corporate Officer

Stock
Ownership
Associations
4,959 thousand(21.1%)

Financial
Institutions
7,531 thousand(32.1%)
Securities Companies
223 thousand(1.0%)

Corporate Officer

Kazuyoshi Ichikawa
Corporate Officer

Noboru Miura
Corporate Officer

Hitoshi Nagase
Corporate Officer

Masato Usui

CORPORATE INFORMATION (As of May 31, 2023)
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:

Corporate Officer

Shirou Hatasaki
Corporate Officer

Naritoshi Nakamura
Corporate Officer

Naozumi Yoshida
Corporate Officer

Yasushi Goshima*Outside director.

December 21, 1928
¥16 billion
3,237 (Group employees 7,245)
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 (Cutting Tools / 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 Shares

overwhelmingly longer life performance andPlease contact Sumitomo Mitsui Trust Bank, Limited which administers theshareholders registry.

This is the AquaREVO Mills, which are used forprocessing difficult-to-cut materials such as
stainless steel. Newly developed shapes provide
higher efficiency, contributing to customer
productivity enhancement.