INTERIM REPORT
2018
December 1, 2017 to May 31, 2018

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 wish to express our sincere condolences to everyone who
has suffered from the recent torrential rains in Western Japan, andwe sincerely pray for the earliest recovery of the affected areas.
We report the interim results for the NACHI-FUJIKOSHI Groupfor the period from December 1, 2017 to May 31, 2018.

Business Environment
The environment surrounding the NACHI-FUJIKOSHI Group during
the interim term has, overall, been a gentle recovery resulting fromthe steady performance of the economies of the developed
countries led by Europe and the United States and the rally of theeconomies of developing nations.

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 its sales byfinding new customers, mainly new users in overseas countries, andreleasing new products. We have also strengthened our earning
structure through increased in-house production and improved
productivity, and other measures, and expanded our development,
sales and production systems aiming for future business growth.
Thanks to these initiatives mentioned above, consolidated net
sales in the interim term reached 124.6 billion yen, up 8.9% overthe same period of the previous year. This includes domestic salesof 63.5 billion yen (up 11.2% YoY) and overseas sales of 61.1 billion yen(up 6.5% YoY).
In terms of profitability, operating income, ordinary income andquarterly net income attributable to owners of the parent were
8.1 billion yen (up 5.1% YoY), 7.0 billion yen (up 4.1% YoY) and4.4 billion yen (down 3.3% YoY), respectively.
We wish to forego the payment of interim dividends for thisinterim period.

Future Initiatives
The NACHI-FUJIKOSHI Group has formulated a medium-term
management plan ending in FY2020 to achieve performancetargets with net sales of 300 billion yen and operating income of
27 billion yen, by strengthening the robot business, which is
growing in demand worldwide, and Electric Vehicles (EVs) that are
expected to be popular in the medium to long term. We are also
expanding our management base to support a wide range ofindustrial machinery fields.
In the future, we will continue to focus on the robot business,encourage improvement in all aspects of R&D, sales and services,manufacturing and procurement, promote marketing of innovative
new products, local production of overseas demand areas, and wewill strive to further improve business performance by such efforts
as pursuit of streamlining production lines, and reducing costs by
expanding in-house production of key components.
We would like to express our sincerest appreciation to all of ourshareholders for their continued support and understanding.
August 2018

Chairman and
Representative Director

President andRepresentative Director

RESULTS OF OPERATIONS (Consolidated Operating Result for Six Months Ended May 31, 2018)
Composition of Sales
Business Segment

MarketSpecial 特殊鋼
Steels/・Industrial工業炉ほか
Furnaces
工具Tools
Cutting
and Others
15
6％
14％
%
7%
Machine Tools
工作機械
油圧機器
Hydraulic
7%
8％
24
％
Equipment¥124.6
1,144億円
26%
BillionRobots
ロボット
13%
14
％
ベアリング
Bearings

3333%％

RegionEnergy/Infrastructure
22%

Asia
29%

¥124.6
BillionJapan
51%¥124.6
BillionAutomotive
49%

Europe6%
Americas14%

Machinery/
Retail29%

Trend in Business Results
Net Sales (billion yen)

237.4

■Interim■Full-year

Operating Income (billion yen)■Interim■Full-year

211.4

218.5

18.9
16.1

107.3

106.2

114.4

124.6
11.1
9.6
6.4

FY

2014
2015

2015
2016

2016
2017

2017
2018

FY

2015

2016

7.7

2017

8.1

2018

TOPICS
Achieving the Medium-term Management Plan
NACHI-FUJIKOSHI Corp. has formulated a medium-term management plan covering up to FY2020 as a milestone
toward realizing our long-term vision, and begun taking steps to achieve further expansion of our operations. In order toachieve the medium-term management plan, we have established and are moving forward with three priority measures.

Long-term vision

Medium-Term Business Plan

SloganManagement Policy

Challenging growth inbusiness to fulfill
aspirations as amanufacturing company

Innovate in manufacturing
worldwide with advanced FA
system and mechatronics

Performance goals

Sales at 300 billion yen
Operating income at
27 billion yen
Operating income
margin at 9%

Important Policies

1. Expansion of ourrobot business
2. Strengthening responseto the shif ts to EVs
3. Deepening industrial
machinery field

1.Expansion of Our Robot Business
NACHI-FUJIKOSHI Corp. develops and provides the latest robots and FA systems in order to satisfy our customers’automation needs.

Expanding the Robot Development System
We will develop and introduce to the market new
robots that have never before existed, by openinga robot R&D center in Tokyo and incorporatingstate-of-the-art software technology.
In addition, we will establish a robot R&D center in
China, where there is the world’s largest demand
for robots, and will respond to local needs locally.

Strengthening FA System Proposal Capability
We provide advanced FA systems with automation technology
developed in NACHI’s own production lines and Technical Centers
deployed in 10 locations around the world.

Production line using small robots(NACHI’s hydraulic equipment factory)

Technical Center in Shaghai

CZ10 human-friendly collaborative robot
without a safety barrier

Technical Center in Detroit

2.Strengthening Response to the Shifts to EVs
We are developing new products and responding to the move towards theshifts to EVs.

Deployment of Skiving Combined Processing Systems
Introducing GMS200, a multi-function skiving machining center, to themarket. It provides higher efficiency and higher precision processing,combined with a skiving cutter. In addition, it deploys a system thatcombines small robots, responding to the need to make production lines
more compact, and for small-lot production of many kinds.

GMS200Development of Electric Actuators
Based on solenoid technology developed from car control valves,
we commercialized an electric actuator that can be used as alocking mechanism with high power, contributing to electronic
control of the powertrain.
Electric actuators

3. Deepening Industrial Machinery Field

Skiving Cutter

We will develop and introduce high-precision, high-efficiency products for the broadly based industrial machinery field.

Increasing Manufacturing Capacity for Thin-walled Bearings

Expansion of Carbide Drill Lineup
We will introduce high-performance carbide drills with newmaterials, shapes, and coatings
to the market this autumn.
This will greatly contribute to theimprovement of our customers’
productivity.
AQUA Drill EX Series carbide drills

In response to the vigorous demandfor precision speed reducers to beincorporated in industrial robots andmachine tools, we are expanding
production capacity of thin-walled
bearings for precision speed reducers.
Thin-walled bearings for
precision speed reducers

Efforts toward Globalization
We conduct practical training corresponding
to the issues and t asks of our overseas
subsidiaries to promote the recruitment of
loc ally employed executives, for the
localization of our overseas subsidiaries.

Training at the Showroom

Nachi Toyama Dormitory

The Nachi Toyama Dormitory was completelyrenovated last year, and we use it for training
and accommodation, as well as for exchanges
with our residents.

4

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

November 30, 2017
(for your reference)

May 31, 2018ASSETS:

Item

November 30, 2017
(for your reference)

May 31, 2018

LIABILITIES:Current assets
Cash and cash equivalents

139,308

140,959

23,43624,050Notes and accounts receivable

53,561

55,211Inventories

51,92553,252

Other

10,385

8,445

Fixed assets

159,846

156,742

Property, plant and equipment

114,867

113,589

Buildings and structures

31,59830,607

Machinery and equipment

64,17764,363Other

19,091

18,619Intangible fixed assets
Investments and advances
Total assets

2,654
42,324

40,616299,155

297,702

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

2,536

Six Months Ended
May 31, 2017

(million yen)

Six Months Ended
May 31, 2018

114,485
7,723
6,793
5
578

124,638
8,115
7,072
11
577

6,220

6,506

4,647

4,494

Current liabilities

99,083102,394

Notes and accounts payable

48,10547,449

Short-term loans

29,53437,294Other

21,443

17,650Long-term liabilities

80,671

76,253Long-term debt

53,92550,992

Allowance for retirement benefits

10,866

10,845

Other

15,87914,415

Total liabilities

179,755

178,648

Shareholders’ equity

102,785

104,790

Common stock

16,074

16,074

Additional paid-in capital

11,137

11,137Retained earnings

75,824

77,834

Treasury stock

– 251

– 256

Revaluations and translation adjustments

10,113

7,588

Non-controlling interests

6,500

6,675

Total net assets

119,399

119,054

Total liabilities and net assets

299,155

297,702

NET ASSETS:

Consolidated Statements of Cash Flows
Item

Six Months Ended
May 31, 2017

(million yen)

Six Months Ended
May 31, 2018

Cash flows from operating activities

14,175

7,821

Cash flows from investing activities‒ 10,652‒ 9,129

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‒ 4,402

2,461

‒ 946

889

20,093

22,537

19,14623,426

SHAREHOLDER INFORMATION (As of May 31, 2018)
Number of Shares Issued: 249,193,436
22,797
Number of Shareholders:Major Shareholders (top five):(24,919,343 shares after share consolidation,
as of June 1, 2018)
Note: Shareholding ratios are calculated after
subtracting treasury stock (689 thousand shares).

NACHI WANEI Stockholding
Employees’ Stock Ownership Plan
Toyota Motor Corporation
MUFG Bank, Ltd.
The Hokuriku Bank, Ltd.

20,80013,50813,182
11,888
8,659

8.37
5.44
5.30
4.78
3.48

DIRECTORS AND AUDITORS (As of August 2018)
Hiroo Honma

President andRepresentative Director

Kenji Susukida
Executive
Vice PresidentManaging Director

Masayuki Kobayashi
Managing Director

Director

Kouichi Watanabe
Managing Director

Shigeru Togashi

Hidenori Hayashi

Director

Toru Inoue
Tetsu Furusawa
Director

Shinichi Urata
Director

Yutaka Tsukamoto

Director

Director

Eastern Japan Main BranchCentral Japan Main BranchWestern Japan Main Branch
Higashi-Toyama Plant
Namerikawa Plant
Major Overseas Offices and Plants:

Notice of Changes
in Share Units andShare Consolidation

Financial
Institutions
82,759 thousand(33.3%)

Other JapaneseCorporations
45,266 thousand(18.2%)

Securities Companies
3,464 thousand(1.4%)

Director

Kazuo Tsukahara*
Director

Shinjiro Iwata*Standing Corporate Auditor

Hiroshi Yamada

Standing Corporate Auditor

Masashi Hori

Standing Corporate Auditor

Director

Masakazu Yamazaki*

Jun Sakamoto

Corporate Auditor

Director

Somuku Iimura*

Hideaki Hara

CORPORATE INFORMATION (As of May 31, 2018)
Foundation:
Capital:Number of Employees:
Major Products:
Machinery and tools business
Components business
Other business
Major Domestic Offices and Plants:
Head OfficeToyama Plant

Individuals
44,801 thousand(18.0%)

Noritsugu Sasaki
Noboru Miura

Stock
Ownership
Associations
41,885 thousand(16.9%)

Foreign
Corporations
30,327 thousand(12.2%)

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

Shareholders

Chairman and
Representative Director

Breakdown of Shareholders*Outside director or outside corporate auditor.

December 21, 1928
¥16 billion
3,213 (Group employees 7,433)
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)
Effective as of June 1, 2018, the Company changed the number of shares constituting one unit andconsolidated shares as follows.

● Changes in Share Units

We changed from 1,000 shares to 100 shares.

● Share Consolidation

10 shares of common shares
have been consolidated to 1 share.

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
1,000 shares (100 shares from June 1, 2018 onwards)
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

The Cover Photograph

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 MZ12 robot meets the needs of automation in

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

In addition to assembling and moving small parts,

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

a wide range of industrial fields.
Providing both weight reduction and high rigidity,
it achieves high-speed, high-precision operation
at the top-class level.
it contributes to greatly improved productivity
in various applications such as machining.