BUSINESS REPORT2019
December 1, 2018 to November 30, 2019

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 report the results for the NACHI-FUJIKOSHI Group for theperiod from December 1, 2018 to November 30, 2019.

Business Environment
The environment surrounding the NACHI-FUJIKOSHI Group during
the present term has been generally difficult because the globaleconomy slowed down fur ther as the consequence of theU.S.-China trade dispute, Brexit, and other factors.

Business Progress and Results
Given these circumstances, the NACHI-FUJIKOSHI Group has been
making full use of its strength as a comprehensive machinery
manufacturer with robotics business at its core and encompassing
cutting tools, machine tools, bearings, hydraulic equipment, andspecial steel businesses to expand orders and sales by finding newusers in Japan and overseas and to develop and introduce to themarket game-changing new products. We have also promoted thestrengthening and expansion of our development, sales andproduction systems aiming for the immediate improvement of profit
structures and the mid- and long-term expansion of business
operations.
However, domestically, automobiles and industrial machinery
showed weakness while overseas markets, China in particular, also
slowed down. As the result, consolidated net sales in the current
term remained at 249.0 billion yen, down 1.2% year-on-year. This
includes domestic sales of 135.0 billion yen (up 3.1% YoY) andoverseas sales of 114.0 billion yen (down 5.9% YoY). In terms ofprofitability, although we undertook productivity improvement andcost reduction, in addition to a strong yen, persistently high raw
material, energy, and distribution costs as well as rising personnel
expenses and other increasing costs put pressure on profits. This
period’s operating income and ordinary income and net income
attributable to the parent company shareholders were 13.3 billion
yen (down 12.8% YoY), 12.2 billion yen (down 11.9% YoY), and 8.2
billion yen (down 7.8% YoY), respectively.

Dividends
With regard to the fiscal year-end dividend, taking into account theprofit and the future business development, it has been decided
that the dividend would remain the same as the previous period
and 100 yen per share would be paid.

Future Initiatives
The outlook for the business environment is unclear, beginningwith the U.S.-China trade dispute. It is difficult to determine at thispoint where demand is headed in automobiles, industrialmachinery, construction machinery, and the retail markets. The
management environment is also changing around us with theacceleration of the shift towards electric vehicles (EVs) andautomated driving well as the progress in manufacturing withfactory automation and the internet-of-things (IoT).
Seizing this structural change as a major opportunity, theNACHI-FUJIKOSHI Group will enhance the nature of all aspects ofsales and service, manufacturing and procurement, and researchand development under the new medium-term slogan of “Innovatein manufacturing worldwide with our advanced FA systems andmechatronics.” We will also leverage our unique strengths in diverse
businesses, technology, and manufacturing knowhow in robotics
and otherwise to create new products and business opportunities,
along with striving to further improve our performance by carryingout structural reforms including thoroughgoing cost reform andstrengthening and developing human resources.
We would like to express our sincerest appreciation to all of ourshareholders and other stakeholders for their continued support.
February 2020

Chairman andRepresentative Director

President andRepresentative Director

RESULTS OF OPERATIONS (Consolidated)
Composition of Sales
Business Segment

MarketSpecial Steels/
Industrial Furnaces Cutting Tools
and Others
14%7%
Machine Tools
Hydraulic
9%
Equipment¥249
27%
BillionRobots12%

RegionEnergy/Infrastructure
23%¥249
BillionAsia
28%Trend in Business Results
Net Sales (billion yen)
252.2
237.4

Europe6%
Americas12%

Machinery/Retail28%

Bearings
31%

Operating Income (billion yen)Japan54%¥249
BillionAutomotive
49%

Net Income Attributable toOwners of the Parent (billion yen)

249.0

9.7
16.1

8.9

15.3

8.2

13.3

FY

2017

2018

2019

FY

2017

2018

2019

FY20172018

2019

TOPICS
1.Renew Company-wide Mid-term Slogan
Leading innovation in manufacturing with the world’s most advanced technology, with a focus on our robotics business
We, as a comprehensive machinery manufacturer with robotics business at its core, will respond to market trends and needs, anddevelop the world’s most advanced products and technology. We will also contribute to the product and manufacturing innovation by
our customers by making every possible improvement in production efficiency and quality of products and providing production
systems and operating methods as solutions to our customers.

2.Expansion of Merchandise Responding to the Needs of Market and Customers
We will provide merchandise that contribute to the rationalization and automization of production lines and achieve cost
reduction and productivity improvement.

Expansion of compact robot lineup
We expanded the MZ series lineup to cover from compact
robots from 1-kg up to 25-kg payloads.
We will continue to contribute to the automization needs ofour customers by expanding our product lineup such as
SCARA robots (introduction scheduled for this spring) andcollaborative robots and developing and providing systems
and applications incorporating robots.

1kg
payload4kg
payload

7kg
12kg
payloadpayloadThe MZ series

25kg
payloadStandardization of robot systems

Expanding carbide round tool series

Introduction of the NS-Platform Deburring Cell tothe market, which systemizes and standardizes thedeburring process.

The AquaREVO Drills Oil-Hole and The AquaREVO Millcarbide end mill newly added to the AquaREVO series.

We will continue to develop and market standardized
systems across a wide range of production processes.

NS-Platform Deburring Cell

We will continue to amplify our product lineup in order tocontribute to the improvement of the productivity of ourcustomers through long tool life and high efficiency.

AquaREVO Mill

3.Strengthening Manufacturing Structures
Start up smart factories utilizing IoT
We will continue to increase production capacity for products for automization and EVs.
New factories will be smart factories with thoroughgoing productivity improvement, rationalization, and cost reduction.

New establishment of small-robot factory
Fully automated production lines for the MZ
series compact robots will be installed at
the newly built robot factory 3 at the ToyamaPlant.
Production capacity will increase by 150%
over current capacity in order to respond to
the automization needs of our customers.
Robot factory 3 (completed December 2019)

Increase production capacity for products for EVs and autonomous driving
Automotive hydraulics factory 4 newly built at
our Namerikawa Plant.
We will strengthen production capacity to meetthe growing future demand for actuators andvane pumps for EVs and autonomous driving.

Actuator

Vane pump

Automotive hydraulics factory 4 (completed November 2019)

Received awards including the Nikkan Kogyo Shimbun’s The Best 10 New Products Award
The MZ01 compact robot received the Top Prize for the Best 10 New ProductsAwards.
It was recognized for its contribution to space saving and for its universal utility
to be installed anywhere and convenience in adapting to a wide range of applications.
Our new carbide AquaREVO Drill received an encouragement award at the “CHO”
MONODZUKURI Innovative Parts and Components Award.
A tool life more than twice as long as that of existing products of competitors andthe technological innovation that enables high-quality processing on a wide
variety of materials received high recognition.

Photo of award ceremony for MZ01
(curtesy of Nikkan Kogyo Shimbun)

4

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

November 30, 2018 November 30, 2019

November 30, 2018 November 30, 2019

Item(for your reference)

ASSETS:(for your reference)

LIABILITIES:Current assets

142,249

141,930

Cash and cash equivalents

22,36321,512

Notes and accounts receivable

58,37856,777

Inventories

56,33759,301

5,170

Other

4,339

Current liabilities

104,195

104,879

Notes and accounts payable

49,92351,906

Short-term loans

34,40335,572

Other

19,867

17,400Long-term liabilities

70,27871,074Long-term debt

49,17850,810Allowance for retirement benefits

10,543

10,501

Other

10,557

9,762

Total liabilities

174,473

175,953

Fixed assets

153,300

158,820Property, plant and equipment

113,634

116,838

Buildings and structures

30,582

30,466

Shareholders’ equity

109,571

113,354

Machinery and equipment

66,23968,087

Common stock

16,074

16,074

Additional paid-in capital

11,221

11,252Retained earnings

82,53788,297NET ASSETS:

Land

9,441

9,615

Other

7,370

8,668

Treasury stock‒ 262‒ 2,269

Intangible fixed assets

2,749

3,144

Revaluations and translation adjustments

4,968

4,878

Investments and advances

36,916

38,837

Non-controlling interests

6,536

6,563

Total net assets

121,076

124,797

Total assets

295,550

300,751

Total liabilities and net assets

295,550

300,751

Consolidated Statements of Income
Item

Net sales
Operating income
Ordinary income
Extraordinary income
Extraordinary losses
Income before income taxes
and minority interests
Net income attributable toowners of the parent(million yen)

Year EndedYear Ended
November 30, 2018 November 30, 2019

Consolidated Statements of Cash Flows
Item(million yen)

Year EndedYear Ended
November 30, 2018 November 30, 2019

252,209

249,077

Cash flows from operating activities

20,207

24,22615,306

13,348Cash flows from investing activities‒ 23,792

12,241209‒ 2,582‒ 1,706

596

437

‒ 758

‒ 1,620

13,325

11,813

22,537

21,778

8,945

8,245

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

‒ 18,110

13,901

21,77820,157

SHAREHOLDER INFORMATION (As of November 30, 2019)24,919,343
Number of Shares Issued:
19,066
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratios are calculated after
subtracting treasury stock (70 thousand shares).

Breakdown of Shareholders

Individuals
4,425 thousand(17.8%)

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

Shareholders

NACHI WANEI Stockholding
Employees’ Stock Ownership Plan
Toyota Motor Corporation
MUFG Bank, Ltd.
The Master Trust Bank of Japan, Ltd. (trust accounts)

2,206
1,418
1,188
916901

StockOwnership
Associations
4,416 thousand(17.8%)

ForeignCorporations
2,897 thousand(11.7%)

8.88
5.71
4.78
3.69
3.63

FinancialInstitutions
8,768 thousand(35.3%)

Other JapaneseCorporations
4,083 thousand(16.4%)

Securities Companies
255 thousand(1.0%)DIRECTORS AND AUDITORS (As of February 19, 2020)
Chairman andRepresentative Director

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

Director

Junichi Kodama*

Director

Yo Okabe*

DirectorStanding Corporate Auditor

Masayuki Kobayashi

Standing Corporate Auditor

Masashi Hori

Standing Corporate Auditor

Satoshi HamamotoMasakazu Yamazaki*

Director

Corporate Auditor

Akira Kunisaki

Tokuhiro Matsunaga**Outside director or outside corporate auditor.

CORPORATE INFORMATION (As of November 30, 2019)
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
3,173 (Group employees 7,456)
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, JapanNachi 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 GeneralFebruary
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 anaccount 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 MZ01 compact robot.
Small enough to carry around by hand, at 10 kg,
adapts easily to changes in equipment layout.
Responds to the customer’s every space-saving andautomation needs.