BUSINESS REPORT
2023
From December 1, 2022 to November 30, 2023

Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our deepest condolences to those who lost theirlives in the 2024 Noto Peninsula earthquake and their bereaved families,
and our deepest sympathies to all others who suffered.
We would also like to express our sincere gratitude to our shareholders
for your continued support and cooperation. We hereby report the results
for the NACHI-FUJIKOSHI Group for the period from December 1, 2022 toNovember 30, 2023.

Business Environment

The environment surrounding the Group during the fiscal year continued toexperience a gradual recovery overall,with the normalization of economic
activity progressing in response to the recovery in automobile production
and other factors. On the other hand, the outlook remains uncertain due toseveral factors,including the continued high prices of raw materials andenergy resulting from the protracted conflict in Ukraine,the slowdown of theChinese economy due to a downturn in the real estate market,escalating
tensions in the Middle East region, and the impact of financial tightening inEurope and the United States.

Business Progress and Results

Under these circumstances, the 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 steel businesses torealize the expansion of orders and sales by developing new products andoffering technical proposals that contribute to users’ manufacturing. We
have also been proceeding with structural reform across our overallbusiness, including reorganization and streamlining of our plants aroundthe world, and the expansion of in-sourcing of manufacturing so as torespond 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 construction machinery
sector, net sales in the fiscal year reached 265.4 billion yen (increase 2.9%
YoY), due to a recovery and expansion of sales for machine tools andbearings on the back of a recovery in automobile production, strong
demand in the industrial machinery and retail sectors, and a recovery inequipment demand. This includes domestic sales of 125.3 billion yen(increase 3.1% YoY) and overseas sales of 140.0 billion yen (increase 2.7%
YoY).
In terms of profitability, 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 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 fiscal year’ s operating profit,
ordinar y profit, and net profit at tribut able to the parent company
shareholders were 11.8 billion yen (decrease 30.3% YoY), 11.0 billion yen(decre ase 35.5% YoY ), and 6.4 billion yen (decre ase 47.1% YoY )respectively.

Dividends

With regard to the year-end dividends, considering the profit status andfuture business developments,we have decided to allocate 110 yen per share.

Future Initiatives

Regarding the future business environment, the outlook is generally difficult
to forecast. In the automotive sector, which is the Group’ s main businessarea, production is recovering. However, in the industrial machinery,
construction machinery and retail sectors, demand recovery is delayed due
to economic stagnation in China and Europe, and raw material and energy
prices remain high. Furthermore, in the automotive sector, which is moving
in the direction of carbon neutrality, full-scale EV conversion and businessrestructuring are accelerating, while in the manufacturing sector (including
industrial machinery), there is increasing demand for product development
and productivity improvement through digital transformation and AI, andfor responding to social and environmental challenges such as meeting
SDGs.
In response to these major changes in the structure of industry, the
NACHI-FUJIKOSHI Group will take advantage of our unique strength inhaving diverse business, technology, and production know-how, including
robot technology, to shift to a business structure centered on EVs andindustrial machinery, and to develop new business opportunities. In
overseas markets, we will strengthen all aspects of our sales and service
op erations, manufacturing and pro curement, and re s e arch anddevelopment to further improve our business performance. Along with this,we will stay focused on market trends and capture demand, strive toexpand sales of competitive products and services that collaborate andbring together the technologies of all divisions, and improve productivity
through automation and streamlining. Furthermore, with the goal ofachieving sustainable business growth, we will commit to challenges suchas the environment, society, and governance through our businessactivities.
We would like to express our sincerest appreciation to all of ourshareholders and other stakeholders for their continued support.
February 2024

Director,
Chairman

Representative Director,
President

RESULTS OF OPERATIONS (Consolidated)
Composition of Sales
Business Segment

Special Steels/
Industrial Furnaces
and Others
6%
Automotive
Hydraulics
9%
HydraulicEquipment
18%

MarketCutting Tools
13%

Retail12%

Machine Tools
5%¥265.4
BillionRobots14%

RegionEnergy/Infrastructure
18%

ASEAN, etc.
15%¥265.4
Billion

Trend in Business Results
Net Sales (billions of yen)¥265.4
BillionEurope6%Machinery
21%

Bearings
35%

258.0

China
17%

Automotive
49%

Japan
47%

Americas15%

Net Profit Attributable to
Owners of the Parent (billions of yen)

Operating Profit (billions of yen)
265.4
(250.0)

229.1

12.2
17.0
9.9

14.7
11.8
(10.0)

FY

2021

2022

2023

2024
(forecast)

FY

2021

2022

2023

2024
(forecast)

6.4

FY

2021

2022

2023

(6.0)

2024
(forecast)TOPICS
Toward Medium- to Long-term Growth
As a comprehensive machinery manufacturer that has a diverse array of businesses including robotics, we aim to achieve
medium- to long-term business growth by developing groundbreaking new products that are unavailable from other companies
and strengthening our production system.

1. Development and sales expansion of unique products
We have launched the “Burrless Series”, which overturns the conventional
wisdom that it is normal for burrs to appear during cutting and eliminates theneed for a deburring process.
The newly developed shape minimizes the occurrence of burrs, contributing todramatic productivity improvements in various fields such as EVs.

Burrless Series (drills, taps, and end mills)

Launched on December 21, 2023

Starting with the announcement at Mechatronics Technology Japan 2023, we have displayed the Series at exhibitions around theworld, attracting significant attention from customers. We will continue to promote efforts to expand sales of the Burrless Series.

Mechatronics Technology Japan 2023
October 2023

China International Import Expo (China)
November 2023

METALEX (Thailand)
November 2023

Winning of the Nikkan Kogyo Shimbun’s ‘CHO’ MONODZUKURI Innovative Parts Awards and Ten Best New Products Award
The carbide end mill “Aqua REVO Mills for Stainless Steel”
received the “ ’CHO’ MONODZUKURI Innovative Par ts
Awards - Encouragement Award” , and the small collaborative
robot “CMZ05” and the easy robot teaching system “Nachi
Tablet TP” were winners of the “Ten Best New ProductsAward”.
We will continue to work on developing innovative products
to solve the challenges facing our customers.

Aqua REVO Mills for Stainless Steel

CMZ05 and Nachi Tablet TP

2. Capturing demand for in EV market
We have expanded the adoption of our products to EV motors, reduction gears, etc.
We will also work to expand sales of robots, cutting tools, and machine tools that are ideal for EV production.

Thin-walled, deep-groove ballbearings for electrical units

Electric actuator
Spot welding robots(Used in the parking lock mechanism) (Used in the machining of EV bodies, etc.)

Skiving Multi-function Machine(Used in the machining of
EV components, etc.)

3. Develop the potential demand of the industrial machinery sector
We are working to capture growing demand in the industrial machinery field, including the production of collaborative
robots and robot automation applications that meet the automation needs of various industries and energy-saving
hydraulic equipment that address the growing need for carbon neutrality.

Collaborative robot “CMZ05”(Supports to automation in awide range of industries)

Robot automation applications(Automating connector insertion in the electrical and electronic fields)

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

4. Strengthening our manufacturing system
We are improving production capabilities for carbide drills in North America and for high performance HSS drills in China
to capture growing demand. In Japan, a new full-automated hydraulic plant in operation will show improved productivity
through automation and greater equipment intensity.

NACHI TOOL AMERICA INC.

Carbide drills

NACHI (JIANGSU)High performance New hydraulic traveling motor plant
INDUSTRIES CO., LTD.
HSS drills(operation started in April 2023)

Hydraulictraveling motor

4SUMMARY OF FINANCIAL STATEMENTS
Consolidated Balance Sheets
Item(millions of yen)(millions of yen)

November 30, 2022 November 30, 2023

November 30, 2022 November 30, 2023

(for your reference)

ASSETS:

Item(for your reference)

LIABILITIES:
187,363

189,406

Current liabilities

Cash and deposits

36,042

34,619Notes and accounts receivable,
and contract assets

60,36558,805

Electronically recordedmonetary claims -operating

7,600

8,337

Notes and accounts payable
Electronically recorded obligations operating
Short-term borrowings
Other

Inventories

76,91980,130

Other

6,435

7,513

Fixed assets

170,094

Property, plant and equipment
Buildings and structures

Current assets

125,072
24,96730,093

119,569
19,09426,021Long-term borrowings
Provision for retirement benefits
Other

41,12328,88776,01853,703
9,533
12,78045,19029,263
81,23454,5789,317
17,338

180,917

Total liabilities

201,090

200,804

123,508

127,620

NET ASSETS:

31,32133,457

Shareholders’ equity

128,349

131,395

Share capital

16,074

16,074Long-term liabilities

Machinery , equipment and vehicles

71,782

72,573

Land

9,941

10,228Other

10,463

Intangible fixed assets

3,497

Capital surplus

11,408

11,408Retained earnings

106,758

110,593

11,361

Treasury stock‒ 5,892‒ 6,681

3,672

Accumalated other Comprehensive income

20,55631,319Non-controlling interests

7,460

6,804

Total net assets

156,367

169,520

Total liabilities and net assets

357,457

370,324

Investments and other assets

43,08849,625

Total assets

357,457

370,324

Consolidated Statements of Profit
Item

Net sales
Operating Profit
Ordinary Profit
Extraordinary income
Extraordinary losses
Profit before Income taxes
and minority interests
Quarterly net Profit attributableto owners of the parent(millions of yen)

Year EndedYear Ended
November 30, 2022 November 30, 2023

258,097
17,025
17,100350
150

265,464
11,873
11,02846
75

17,301

10,99912,237

6,469

Consolidated Statements of Cash Flows
Item(millions of yen)

Year EndedYear Ended
November 30, 2022 November 30, 2023

Cash flows from operating activities

11,212

12,030Cash flows from investing activities‒ 20,831‒ 17,774

2,113

3,125

‒ 5,620‒ 1,929

40,37434,75434,75432,824

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

SHAREHOLDER INFORMATION (As of November 30, 2023)
24,919,343
Number of Shares Issued:
17,944
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratios are calculated after
subtracting treasury stock (1,353 thousand shares).

Breakdown of Shareholders
Foreign
Corporations
2,902 thousand(12.3%)
Individuals
4,814 thousand(20.5%)

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.

2,591
1,926
1,414
948
925

10.99
8.18
6.00
4.03
3.93

Other JapaneseCorporations
2,984 thousand(12.7%)MANAGEMENT STRUCTURE (As of February 27, 2024)
Hiroo Honma

Director,
ChairmanYuichi Sawasaki

Director,
Managing Corporate Officer

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

Representative Director,
President

Director,
Corporate Officer

Director (Member of the Audit &Supervisory Committee)

Masayuki Kobayashi

Tsutomu Kurosawa

Shirou Hatasaki

Masakazu Yamazaki*

Representative Director,
Senior Managing Director

Director,
Corporate Officer

Director (Member of the Audit &Supervisory Committee)

Hideaki Hara

Naozumi Yoshida

Yasuaki Sawachika*

Director,
Managing Corporate Officer

Director

Director (Member of the Audit &Supervisory Committee)

Tetsu Furusawa

Yo Okabe*

Emi Goto*

Corporate Officer

Akira Kunisaki
Corporate Officer

Masato Usui

Corporate Officer

Naritoshi Nakamura
Corporate Officer

Kohei Anada

Stock
Ownership
Associations
4,957 thousand(21.0%)
Financial
Institutions
7,593 thousand(32.2%)

Securities Companies
313 thousand(1.3%)

Corporate Officer

Kazutaka Arai

Corporate Officer

Noritsugu Sasaki
Corporate Officer

Masahisa Miyabukuro

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

Corporate Officer

Katsuhiro Matsumoto
Corporate Officer

Hironaga Kitagawa

Corporate Officer

Toru Kuramoto

CORPORATE INFORMATION (As of November 30, 2023)
Foundation:
Capital:Number of Employees:
Major Products:
Machinery and tools business
Components business
Other business
Major Domestic Offices and Plants:
Head OfficeToyama Plant

Corporate Officer

Katsuyuki Enomoto*Outside director.

December 21, 1928
¥16 billion
3,151 (Group employees 7,204)
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 Sharesburrs and eliminates any drill cap remaining.

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

Aqua REVO Drill Burrless, a carbide drill thateliminates the deburring process. The newly
developed shape minimizes the occurrence of
It makes a dramatic contribution to improved
customer productivity.