INTERIM REPORT
2019
December 1, 2018 to May 31, 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 interim results for the NACHI-FUJIKOSHI Groupfor the period from December 1, 2018 to May 31, 2019.

Business Environment
The environment surrounding NACHI-FUJIKOSHI Group during theinterim period is affected by US-China trade issues and by theslowdown in the global economy especially in China. In addition,
the business environment as a whole is becoming unclear due tomarket downturn mainly in industrial machinery despite the factthat the domestic economy is slowly heading for recovery.

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 byfinding new customers, mainly overseas, and by introducting ofn e w p r o du c t s t o t h e m ar ke t . We al s o s t re n g t h e n e d o ur
development, sales and production systems aiming for expansion of
mid-term business operations and improvement of profit structures.
Thanks to these initiatives mentioned above, consolidated net
sales in the interim term reached 127.1 billion yen, up 2.0% overthe same period of the previous year. This includes domestic salesof 69.2 billion yen (up 8.9% YoY) and overseas sales of 57.9 billion
yen (down 5.2% YoY). In terms of profitability, the sales price wasincreased and cost reduction efforts were made. However, inaddition to the yen’ s continued appreciation, sudden priceincreases in raw materials and energy costs, personnel expenses,
and other increasing costs put pressure on profits, and operating
income, ordinary income and quarterly net income attributable toowners of the parent were 7.4 billion yen (down 7.8% YoY), 6.6
billion yen (down 6.6% YoY) and 4.2 billion yen (down 6.3% YoY),
respectively.
We wish to forego the payment of interim dividends for thisinterim period.

Future Initiatives
In the medium and long term, it is expected that the businessenvironment surrounding our company and industrial structure willchange significantly due to the automotive market’ s movement
towards EV, and factory automation in manufacturing caused by thedecline in the global labor force, and advancements in AI and IoT.
Under the given circumstances, the NACHI-FUJIKOSHI Group iscommitted to improving and strengthening its various sections,
including sales and services, manufacturing and resourcing, andresearch and development, under the slogan of “Innovate in
manufacturing worldwide with advanced FA systems andmechatronics” in order to meet new demands brought by changes
in industrial structure.
On the other hand, while the uncertainty brought about by
US-China trade issues, etc. continues, NACHI-FUJIKOSHI Group
strives to improve its performance by leveling production, reducing
procurement cost, rationalization of production lines, reducing
human resources costs through automation and radical cost
reduction.
We would like to express our sincerest appreciation to all of ourshareholders for their continued support and understanding.
August 2019

Chairman andRepresentative Director

President andRepresentative Director

RESULTS OF OPERATIONS (Consolidated Result for Six Months Ended May 31, 2019)
Composition of SalesBusiness Segment

MarketSpecial Steel/Industrial Furnaces
Cutting Tools
and Others
14%7%
Machine Tools
Hydraulic
9%
Equipment¥127.1
26%
BillionRobots13%

RegionEnergy/Infrastructure
24%

Asia
27%

¥127.1
BillionAutomotive
48%

Europe6%Machinery/
Retail28%

Bearings
31%¥127.1
BillionJapan
54%

Americas13%

Trend in Business Results
Net Sales (billion yen)

2,5222,374■Interim■Full-year

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

2,114

161

1,062

1,144

1,246

111

64

FY

2014
2016

2015
2017

153

1,271

2016
2018

2017
2019

FY

2016

77

2017

81

74

2018

2019

TOPICS
1.Expansion of Merchandise
We provide high-performance and high-quality products or the shift to EVs and automation of production lines.

Expanding our robot lineup
A medium-sized robot with payloads of up to 25 kg will soon
be introduced to the market under the MZ series,which has
been mainly a small-sized robot lineup.
We will meet the demands for automation and staff reduction
in automobile parts and general industrial machinery sectors.

Expanding our carbide drill series
The AquaREVO Drills Oil-Hole, an internally-developed
product produced in-house from carbide materials, isadded to our AquaREVO drill lineup.
Payload Payload
4kg
1kg

Payload7kg

Payload
12kg

MZ series of Compact Robots

With the newly developed oil-hole technology, resulting
in long tool life, it contibutes to cost reduction andproductivity enhancement of our customers who require
highly efficient processing, such as automobile andautomotive parts manufacturers The GMS200.
AquaREVO Drill Oil-HoleExpanding products for EV and eco-friendly cars
The GMS200, a compact skiving machining center achieves
high-efficiency and multiple high-precision machining in acompact space. It meets the needs for high-mix low-volume
production and compact production lines.

Compact Skiving
Machining CenterWe are working to expand lineup of lightweight and downsized
products, such as bearings, for EVs and eco-friendly vehicles.

Thin-walled deep groove ballbearing for electric units

The CZ10 wins the Machinery Industry Design Award
The “CZ10 collaborative robot won Machinery Industry Design Award
from the Japan Robot Industry Association, sponsored by the Nikkan
Kogyo Shimbun. Its international standard certified safety design,high operability and high precision location control function wererecognized.
We are comitted to contributing to the automation demands in a wide
range of fields including customers who are not familiar with robots.

CZ10
Collaborative Robot

2.Strengthening Manufacturing Structures
We established smart factories with the latest robots and factory automation systems. We will utilize IoT technology andpush forward with productivity, improvement, rationalization, and cost reduction.

Establishment of Factories in Japan and Increasing Capacities
We will establish our Robot Factory 3 and our Automotive Hydraulics Factory 4 in Toyama. Both will be completed
by the end of 2019 In addition, we are working on enhancing production capacity mainly for hydraulic equipment
for construction machinery which are in high demand.

Robot Factory 3 (new)

4th automotive hydraulics factory (new)3.Expanding Research and Development Structure

Hydraulic motor factory(increasing production capacity)

We are enhancing our research and development structure in order to develop innovative productsthat can be of use in the global market.
Relocation and Expansion of Robot R&D Center
Our Robot R&D Center in Tokyo was relocated toHamarikyu and expanded. We will accelerate
research on software, systems and applications,and work on development of innovative robots.

Establishment of IoT Business Headquarters

Robot R&D Center (Tokyo)

We established an IoT Business Headquarters toenhance productivity applying IoT and AI to internal
factories and production lines. In the future, we will
expand new business based on the knowledge andsuccessful cases collected internally, and develop
an unique systems to provide to customers.

Relocation and Expansion of the Robot Technical Center in USA
The Robot Technical Center was relocated andexpanded in Michigan, USA.

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

November 30, 2018
(for your reference)

May 31, 2019ASSETS:

Item

November 30, 2018
(for your reference)

May 31, 2019

LIABILITIES:Current assets
Cash and cash equivalents

142,249

141,063

22,36322,061

Notes and accounts receivable

58,37857,332Inventories

56,33757,015

Other

5,170

4,653

Fixed assets

153,300

151,375

Property, plant and equipment

113,634

114,055

Buildings and structures

30,582

29,635

Machinery and equipment

66,23967,271

Other

16,812

17,147

Intangible fixed assets

2,749

2,955

Investments and advances

36,91634,365

Total assets

295,550

292,439

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, 2018

(million yen)

Six Months Ended
May 31, 2019124,638
8,115
7,072
11577

127,165
7,481
6,604
3
533

6,506

6,074

4,494

4,212

Current liabilities

104,195

106,330

Notes and accounts payable

49,923

48,974

Short-term loans

34,40339,617

Other

19,867

17,738Long-term liabilities

70,27866,957Long-term debt

49,17847,647

Allowance for retirement benefits

10,543

10,394Other

10,557

8,916

Total liabilities

174,473

173,287

Shareholders’ equity

109,571

111,293

Common stock

16,074

16,074

Additional paid-in capital

11,221

11,221Retained earnings

82,537

84,264

Treasury stock

– 262

– 266

Revaluations and translation adjustments4,968

1,446

Non-controlling interests

6,536

6,410

Total net assets

121,076

119,151

Total liabilities and net assets

295,550

292,439NET ASSETS:

Consolidated Statements of Cash Flows
Item

Cash flows from operating activities
Cash flows from investing activities
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(million yen)

Six Months Ended
May 31, 2018

Six Months Ended
May 31, 2019

7,821
– 9,129

9,506–11,201

2,461

1,361

889

– 805

22,537

21,77823,426

20,972

SHAREHOLDER INFORMATION (As of May 31, 2019)
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 (71 thousand shares).

Breakdown of Shareholders

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

Shareholders

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

2,182
1,394
1,318
1,188865

8.78
5.61
5.31
4.78
3.48

Stock
Ownership
Associations
4,360 thousand(17.4%)

ForeignCorporations
3,816 thousand(15.4%)
Individuals
4,212 thousand(17.0%)

FinancialInstitutions
7,798 thousand(31.4%)

Other JapaneseCorporations
4,511 thousand(18.2%)

Securities Companies
148 thousand(0.6%)DIRECTORS AND AUDITORS (As of August 2019)
Chairman andRepresentative Director

Hiroo Honma

President andRepresentative Director

Jun Sakamoto
Executive
Vice PresidentManaging Director

Shigeru Togashi
Managing Director

Masayuki Kobayashi
Managing Director

Hideaki HaraHidenori Hayashi

Director

Toru Inoue
Director

Tetsu Furusawa
Director

Shinichi Urata
Director

Yutaka Tsukamoto

Director

Noritsugu Sasaki
Director

Noboru Miura

Standing Corporate Auditor

Hiroshi Yamada

Standing Corporate Auditor

Masashi Hori

Standing Corporate Auditor

Masakazu Yamazaki*
Corporate Auditor

Somuku Iimura*

Director

Masatoshi Akagawa
Director

Junichi Kodama**Outside director or outside corporate auditor.

CORPORATE INFORMATION (As of May 31, 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
3,213 (Group employees 7,484)
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, Japan1-1-1, 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 Photograph
The CZ10 collaborative robot.
Contributing to a wide range of our customers’automation needs through its ISO10218-1
certified safety design, high operability andhigh-accuracy position control.