INTERIM REPORT
2020
December 1, 2019 to May 31, 2020

Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our sincere gratitude to our shareholders
for your continued support and patronage.
We offer our prayers for the victims of COVID-19 and express
our heartfelt sympathy for those affected by the disease. We would
also like to express our deepest gratitude to everyone who is working to support healthcare professionals and social infrastructures.
We report the interim results for the NACHI-FUJIKOSHI Groupfor the period from December 1, 2019 to May 31, 2020.

Business Environment

The impact of the US-China trade issues, combined with theslowdown in the global economy caused by the spread of
COVID-19, created a highly challenging operating environment for
the group during the interim period.

Business Progress and Results

Given this environment, the NACHI-FUJIKOSHI Group has been
making full use of its strength as a comprehensive machinery
manufacturer with robotics business at its core, and also
encompassing cutting tools, machine tools, bearings, hydraulicequipment, and special steel businesses, to expand sales by finding
new customers - both within Japan and around the world - and by
introducing new products to the market, thereby acquiring bothorders and sales. We also strengthened our sales and development
systems and streamlining our production systems aiming for
expansion of mid-term business operations and improvement of
profit structures.
However, the impacts of COVID-19 on the automotive andindustrial machinery sectors, both in Japan and abroad had major
effects. This resulted in consolidated net sales in the interim term
remaining at 103.7 billion yen, down 18.4% year-on-year. This
includes domestic sales of 56.4 billion yen (down 18.5% YoY) andoverseas sales of 47.3 billion yen (down 18.3% YoY). In terms of
profitability, mainly due to a decrease in capacity utilization causedby the decline in sales, this term’s operating income, ordinary
income, and quarterly net income attributable to the parent company
shareholders were 2.6 billion yen (down 64.8% YoY), 1.6 billion yen(down 75.7% YoY), 0.4 billion yen (down 89.4% YoY).
We wish to forego the payment of interim dividends for thisinterim period.

Future Initiatives

The outlook for the business environment is unclear due to the
spread of COVID-19 and the ongoing trade issues between the US

and China expected to create difficulties for our company’ s
performance. However, we are working to improve productivity andreduce costs, ensuring that we can maintain a profit.
On the other hand, our company’s business environment ischanging drastically over the medium to long term. These changes
are due to the accelerated adoption of EVs and automated driving in
the automotive field, which is our company’s main area of demand,and progress with factory automation and the use of IoT in
manufacturing.
The NACHI-FUJIKOSHI Group will enhance the nature of all
aspects of sales and service, manufacturing and procurement, andresearch and development under the business operations slogan of“Leading in manufacturing innovations through technologies at thehighest global standards, with its core business in robotics” We will
also leverage our unique strengths in diverse businesses,
technology, and manufacturing knowhow in robotics and otherwise
to create new business opportunities, along with striving to further
improve our performance by carrying out structural reforms such as
developing new products, automating/digitizing factories, andcreating structural reforms with a focus on building organizations
and systems. These reforms are designed to meet future structuresof demand.
We would like to express our sincerest appreciation to all of ourshareholders and other stakeholders for their continued support.
August 2020

Chairman and
Representative Director

President andRepresentative Director

RESULTS OF OPERATIONS (Consolidated Operating Result for Six Months Ended May 31, 2020)
Composition of Sales
Business Segment

MarketSpecial Steels/
Industrial Furnaces
Cutting Tools
and Others
14%7%
Machine Tools
Hydraulic
7%
Equipment¥103.7
28%
BillionRobots13%

RegionEnergy/Infrastructure
24%

Asia
30%

¥103.7
Billion¥103.7
BillionAutomotive
48%

Europe5%
Americas11%

Machinery/
Retail28%

Bearings
31%

Japan
54%

Trend in Business Results
Net Sales (billion yen)

2,522

2,490

2,374

■Interim■Full-year

Operating Income (billion yen)

161

1,144

1,246

■Interim■Full-year

153
133

1,271
1,037
77

81

74

26

FY

2014
2017

2015
2018

2016
2019

2017
2020

FY

2017

2018

2019

2020

TOPICS
1.Promoting Structural Reform for Medium-and Long-Term Growth
The automotive industry is facing a period of significant change said to be the biggest in a century, which have beencaused by technological innovations related to automated driving, electrification, and car-sharing. Furthermore, there isalso a growing need for automation and factory automation in manufacturing due to shifting industrial structures.
Our company is therefore working to develop new products and digitize/automate our factories, allowing for mid tolong-term growth. We are also creating structural reforms that are designed to meet future structures of demand with afocus on building organizations and systems.

2.Expanding the Field of Industrial Machinery, using the Automotive Industry as a BaseWe will solving the problems our customers face by establishing industry-specific development teams.
We will continue to work on developing breakthrough products by linking technologies possessed by each division.

Expansions of Industrial Machinery Products

Mid-size Robot
MZ25

AquaREVO
Drill Oil-HoleExpanding products for Evs and eco-friendly cars
We will leverage our strengths gained through various
businesses and technologies to develop and expand
products for EVs and eco-cars, for which demand is
expected to grow in the future.

Solenoid valve
for automobileThin-walled deep groove ballbearing for electric units

Compact Skiving Machining Center
GMS200High-Pressure Variable
Piston Pump

Bringing New Cleaning Equipment to Market
We have recently begun selling the hybrid vacuum
degreaser Hi NVD-10.
The product enables high-quality
cleaning with a reduced environmental impact, providing benefits
to customers in the fields of heat
treatment, automotive machinery,
and industrial machinery.

Hybrid vacuum degreasing equipment
Hi NVD-10

3.Factory Automation and Digitization
We will promote smart factories that utilize automation and IoT technologies.

Expansion of Production Structures at Small Robot Factory
We are proceeding with automation and the introduction of automatic
production lines at our dedicated small robot factory in Toyama.
We will utilize IoT to increase our production capacity while improving
productivity, streamlining our processes, and reducing costs.

Utilization of Robots in Factories
We are promoting productivity and reduced costs by introducing automated robotic lines.
We will work to standardize our robot systems based on our accumulated
know-how and experience, thereby meeting our customers’ factory
automation needs.

Production line for automotive hydraulic equipment

Robot factory 3 (Toyama)

Production line for carbide materials

Integration of Information Systems Subsidiary
We will merge and integrate our information systems subsidiary (Fujikoshi Information Systems Co, Ltd.) in September.
We will also further promote the systematization and streamlining of all operations and the automation/digitization of ourfactories, improving our group’s productivity as a whole.

<Business Operations Slogan>

Leading in manufacturing innovations through technologies at the highest global
standards, with its core business in robotics
Establishment of a Robot Technology Research Cooperative
We established the “ROBOT Industrial Basic Technology Collaborative Innovation
Partnership” (ROBOCIP) with five industrial robot manufacturers and our company (July2020). The group conducts fundamental technology research to strengthen the foundation for technological innovations in industrial robots and share knowledge with universities and companies through industry-academic collaboration.
We will contribute to the further spread of industrial robots, which are expected to seemarket growth.
4

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

November 30, 2019
(for your reference)

May 31, 2020

ASSETS:

Item

November 30, 2019
(for your reference)

May 31, 2020

LIABILITIES:Current assets
Cash and cash equivalents

141,930

149,392

21,512

41,380Notes and accounts receivable

56,77745,846Inventories

59,301

57,889

Other

4,339

4,276

Fixed assets

158,820

155,070

Property, plant and equipment

116,838

115,126

Buildings and structures

30,46630,262

Machinery and equipment

68,087

66,694Other

18,284

18,169Intangible fixed assets

3,144

3,028

Investments and advances

38,83736,915

Total assets

300,751

304,463

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

Six Months Ended
May 31, 2019(million yen)

Six Months Ended
May 31, 2020

Current liabilities

104,879

113,979

Notes and accounts payable

51,90640,945

Short-term loans

35,57258,741

Other

17,40014,293Long-term liabilities

71,074

72,402Long-term debt

50,81051,949Allowance for retirement benefits

10,501

10,479

Other

9,762

9,973

175,953

186,381

Shareholders’ equity

113,354

110,956

Common stock

16,074

16,074

Additional paid-in capital

11,252

11,222Retained earnings

88,297

86,111

Treasury stock–2,269–2,451

Revaluations and translation adjustments

4,878

724

Non-controlling interests

6,563

6,399

Total net assets

124,797

118,081

Total liabilities and net assets

300,751

304,463

Total liabilities

NET ASSETS:

Consolidated Statements of Cash Flows
Item

103,792

Cash flows from operating activities

2,636

Cash flows from investing activities

6,074

1,606
13
321
1,298

4,212

445

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

127,165
7,481
6,604
3
533

(million yen)

Six Months Ended
May 31, 2019

Six Months Ended
May 31, 2020

9,506
–11,201

6,678–7,1381,361

21,493–805

20,416

21,77820,157

20,972

40,574

SHAREHOLDER INFORMATION (As of May 31, 2020)
24,919,343
Number of Shares Issued:
19,191
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratios are calculated after
subtracting treasury stock (94 thousand shares).

Breakdown of Shareholders
Foreign
Corporations
2,810 thousand(11.3%)
Individuals
4,375 thousand(17.6%)

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

Shareholders

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

2,308
1,454
1,188
1,082
1,049

9.30
5.86
4.79
4.36
4.23

Other JapaneseCorporations
3,867 thousand(15.6%)

Executive
Vice President

Hiroo Honma

Shigeru Togashi

President andRepresentative Director

Managing Director

Jun Sakamoto
Executive
Vice President

Hidenori Hayashi

Director

Toru Inoue
Director

Hideaki Hara

Managing Director

Yutaka Tsukamoto

Tetsu Furusawa
Director

Shinichi Urata
Director

Noritsugu Sasaki

Director

Noboru Miura
Director

Masatoshi Akagawa

Financial
Institutions
9,012 thousand(36.3%)
Securities Companies
149 thousand(0.6%)DIRECTORS AND AUDITORS (As of August 2020)
Chairman and
Representative Director

Stock
Ownership
Associations
4,609 thousand(18.6%)

Director

Junichi Kodama*

Director

Yo Okabe*

DirectorStanding Corporate Auditor

Masayuki Kobayashi

Standing Corporate Auditor

Masashi Hori

Standing Corporate Auditor

Satoshi Hamamoto

Masakazu Yamazaki*

Director

Corporate Auditor

Akira Kunisaki

Tokuhiro Matsunaga**Outside director or outside corporate auditor.

CORPORATE INFORMATION (As of May 31, 2020)
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
3,208 (Group employees 7,301)
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 (SHANGHAI) CO., LTD. (China)
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:Voting rights at General Meeting of Shareholders on November 30
Record Date:
Year-end dividend on November 30
Interim dividend on May 31
100 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 PhotographThis is the MZ25 medium-sized robot.
It contributes to a wide range of customers’automation needs by through features such as highversatility, high speed, and high accuracy, alongwith its ability to be used in various applications.