BUSINESS REPORT
2022
December 1, 2021 to November 30, 2022

Securities Code: 6474

TO OUR SHAREHOLDERS
We would like to express our sincere gratitude to our shareholders for yourcontinued support and patronage.
We hereby report the results for the NACHI-FUJIKOSHI Group for theperiod from December 1, 2021 to November 30, 2022.

Business Environment

The operating environment for the group during the current period generally
continued to see a gradual recovery, as economic activity continued tonormalize, and the economies of developed nations such as Japan andWestern countries continued to recover. Nevertheless, the Japanese
economic outlook remains uncertain due to factors such as the impact ofautomotive production cutbacks due to semiconductor shor tages,
COVID-19 lockdowns of cities in China, sharp price rises for raw materials
and energy in the wake of the prolongation of the Ukraine crisis, anddramatic fluctuations in foreign exchange rates as a result of the US
government policy of raising interest rates.

Business Progress and Results

Under these circumstances, the NACHI-FUJIKOSHI 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 steelbusinesses to realize the expansion of orders and sales by developing new
products and of fering technical proposals that contribute to users’
manufacturing. We have also been proceeding with structural reform
across our overall business, including reorganization and streamlining ofour plants around the world, and the expansion of in-sourcing of
manufacturing so as to respond to changes in demand, aiming to improve
profitability.
As a result of the above, despite factors such as production adjustmentsin the automotive sector, consolidated net sales in the current period
reached 258.0 billion yen (increase 12.6% YoY), due to the recovery andexpansion of demand in the industrial machinery and retail sectors as wellas the steady performance of the construction machinery sector. This
includes domestic sales of 121.6 billion yen (increase 4.2% YoY) andoverseas sales of 136.4 billion yen (increase 21.4% YoY). In terms of
profitability, profits increased as a result of the transferring of raw material
price increases onto sales prices, improved productivity from automationand streamlined operations of production lines, ef for ts to reduce
procurement costs, and the weakening yen exchange rate, alongside
improved capacity utilization through increased sales and manufacturing.
As a result, this term’s operating income, ordinary income, and net income
attributable to the parent company shareholders were 17.0 billion yen(increase 15.7% YoY), 17.1 billion yen (increase 18.3% YoY), and 12.2
billion yen (increase 22.5% YoY) respectively.

Dividends

With regard to the fiscal year-end dividends, taking into account the profit
and the future business development, it has been decided that, since a
proper level of profitability has been successfully secured, the dividends
will be 110 yen per share, 10 yen higher than in the previous period.

Future Initiatives

Regarding the outlook for the business environment, the forecast for the
automotive sector which is our group’s main area of business remains
unclear, although the global semiconductor shortage and issues with the
supply of components are expected to resolve. In addition, althoughdemand in the industrial machiner y, construction machiner y, andcommercial sectors remains at a high level, some adjustments are being
seen in cer t ain are as, and the overall outlook is hard to predict.
Furthermore, the business environment is changing drastically over the mid
to long term including the acceleration of initiatives for the adoption of EVs
and business restructuring toward carbon neutrality in the automotive field,
the continued digital transformation of manufacturing including theindustrial machinery sector, and the need to respond to social andenvironmental challenges such as the SDGs.
The NACHI-FUJIKOSHI Group will leverage its unique streng ths
possessing diverse business, technological, and manufacturing knowhow,
including those related to robotics, to create new business opportunities
with the aim of transitioning towards a business structure centered on the
EV and industrial machinery sectors, in order to respond to these majorchanges in the structure of industry. We will strengthen all aspects of sales
and ser vices, manufacturing and procurement, and research anddevelopment, with a focus on overseas markets with significant growthpotential. We will catch market movements and needs to promote sales of
products and services that cooperate and integrate technologies of all our
departments, and strive to further enhance our performance by improving
productivity from automation and streamlining. Furthermore, with the goalof achieving sustainable business growth, we will commit to challenges
such as the environment, society, and governance.
We would like to express our sincerest appreciation to all of ourshareholders and other stakeholders for their continued support.
February 2023

Director,
Chairman

Representative Director,
President

RESULTS OF OPERATIONS (Consolidated)
Composition of Sales
Business Segment

MarketSpecial Steels/
Industrial Furnaces
and Others Cutting Tools
Automotive
13%
6%
Hydraulics
Machine Tools
8%
4%HydraulicEquipment
21%¥258.0BillionRobots15%

RegionRetail12%
Energy/Infrastructure
20%

ASEAN, etc.
14%¥258.0BillionChina
19%

Automotive
47%

Trend in Business Results
Net Sales (billion yen)

Net Income Attributable to
Owners of the Parent (billion yen)

Operating Income (billion yen)
258.0

Japan
47%

Europe6%
Americas14%

Machinery
21%

Bearings
33%¥258.0Billion(260.0)

229.1

12.2
17.0

201.0

(17.5)(12.5)

9.9

14.7

6.8
2.4

FY

2020

2021

2022

2023
(forecast)

FY

2020

2021

2022

2023
(forecast)

FY

2020

2021

2022

2023
(forecast)TOPICS
Structure of our business foundation for the future
As we look ahead to the major changes taking place in the structure of industry, we will build business platforms in growth
sectors such as EVs and industrial machinery, through working to develop new products and expand our market share in order
to expand sales and profits, strengthening our manufacturing system, driving forward profit improvement.

1. Expanding adoption to EVs
Components to be incorporated into eAxles, motors, reduction gears, electric compressors and lock mechanisms and thelike, as well as robots used in EV manufacturing facilities, are greatly adding to our sales.
We continue to develop ground-breaking new products and promote increased sales in the EV sector.

Deep groove ball bearingsfor electric units

Actuator(Used in parking lockmechanisms)

Full-sized robots: The SRA(Used in the machining of EV
bodies, etc.)

Skiving Multi-function
Machine GMS100(Used in the machining of EV
components, etc.)

2. Develop the potential demand of the industrial machinery sector

We will cultivate new demand in the electrical, electronic and general industrial machinery fields, where demand is
expected to expand, bring new products to market, and build our business foundation in the industrial machinery sector.

AquaREVO Mills for Stainless Steel(Used in the machining of difficult-to-cut
materials such as stainless steel)

Robot connector insertion applications(to enable automated/high-speed
insertion of cables for applications suchas smartphones and tablets)

Winner of the Ten Best New Products Award by Nikkan Kogyo Shimbun
The “MZ F Series” of high-speed, high-precision small robots, and our ultra-compact controller
CFDq are winners of the Ten Best New Products Award by Nikkan Kogyo Shimbun.
The MZ F Series has won praise for its top-of-its-class capabilities for high-speed, highprecision work and its high level of versatility, while CFDq is highly commended for its
easy-to-use operability and its size as the world’s smallest controller.

High pressure variable volume piston pump
(Used in forging equipment)3. Strengthening our manufacturing system and improving profitability
Based on the concept of local production for local consumption, we will build up our production capabilities both
domestically and abroad for round tools, bearings for industrial machinery and hydraulic equipment used in construction
machinery, for which demand is steady. At the same time, we will promote intensive production, automation, andstreamlining, with the aim of strengthening our manufacturing system and boosting its efficiency.
We will also make strong efforts to transfer the rising costs of raw materials and energy onto sales prices, in order toimprove profitability.

NACHI (JIANGSU) INDUSTRIES CO., LTD. (China)(Increased production of cutting tools, hydraulic equipment
for construction machinery, and other products)

Bearings for ball screw supports forindustrial machinery

High performance drills (Used widely in
the industrial machinery and electricaland electronic sectors)

Towards Achieve Sustainable Growth
1. Initiatives for achieving carbon neutrality
We are developing new products adapted to the needs of our customers in terms ofenergy saving and the shift towards EVs, while promoting the utilization of renewableenergy and other measures at our factories.
We installed and commenced the operation of a solar power generation systemon the roof of the No. 3 Robot Factory at the Toyama Plant last year, and will
progressively develop such systems at other plants and factories.

The solar power generation system(installed at our Toyama Plant)

2. Strengthening our corporate governance system[Diagram of the new management structure]
General Meeting of Shareholders
Board of Directors
Directors (not membersof the Audit andSupervisory Committee)

Directors (members of
the Audit andSupervisory Committee)

Corporate Officers

Audit and Supervisory Committee

Head office, committee
departments, groupcompanies

Nomination andRemuneration Committee

In February 2023, the company transitioned to a Company with Audit andSupervisory Committee.
In line with this, a corporate officer system has been introduced, and a
Nomination and Remuneration Committee has been established on a
voluntary basis.
We will enhance our corporate governance our corporate governance still
further through the transition to this new management structure.

3. Contributions to society
We will continue making contributions to our local
community and society, including the administrationof Fujikoshi Ajisai Preschool and Fujikoshi Hospital.
We are also working to ensure diversity when hiringand developing human resources.

Fujikoshi Ajisai Preschool

4

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

November 30, 2021 November 30, 2022

November 30, 2021 November 30, 2022

Item(for your reference)

ASSETS:(for your reference)

LIABILITIES:Current assets
Cash and cash equivalents

159,258

187,363

41,771

36,042

Notes and accounts receivable

55,100—Notes and accounts receivable,
and contract assets—

67,966Inventories

57,381

76,919

Other

5,005

6,435

Fixed assets

160,053

Property, plant and equipment

Current liabilities

103,344

125,072

Notes and accounts payable

47,82655,060

Short-term loans

29,20841,123Other

26,30928,887Long-term liabilities

77,75576,018Long-term debt

56,26653,703

Allowance for retirement benefits

9,754

9,533

Other

11,734

12,780170,094

Total liabilities

181,100

201,090

114,260

123,508

NET ASSETS:

Buildings and structures

29,25431,321

Shareholders’ equity

119,427

128,349

Machinery and equipment

63,811

71,782

Common stock

16,074

16,074

Additional paid-in capital

11,401

11,408

Land

9,465

9,941

Retained earnings

96,875

106,758

Other

11,728

10,463

Treasury stock‒ 4,924‒ 5,892

Revaluations and translation adjustments

10,676

20,556

Non-controlling interests

8,107

7,460

Total net assets

138,211

156,367

Total liabilities and net assets

319,312357,457

Intangible fixed assets

2,861

3,497

Investments and advances

42,931

43,088

Total assets

319,312357,457

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(million yen)

Year EndedYear Ended
November 30, 2021 November 30, 2022

Consolidated Statements of Cash Flows
Item(million yen)

Year EndedYear Ended
November 30, 2021 November 30, 2022

229,117

258,097

Cash flows from operating activities

33,08011,212

14,71817,025

Cash flows from investing activities‒ 20,831

17,100

400

350

247

150

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

‒ 14,172

14,457

14,61017,301

9,993

12,237‒ 18,608

2,113

1,438

‒ 5,620

38,93640,37440,37434,754

SHAREHOLDER INFORMATION (As of November 30, 2022)
24,919,343
Number of Shares Issued:
18,297
Number of Shareholders:Major Shareholders (top five):

Note: Shareholding ratios are calculated after
subtracting treasury stock (1,217 thousand shares).

Breakdown of Shareholders
Foreign
Corporations
2,948 thousand(12.5%)
Individuals
4,578 thousand(19.3%)

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

Shareholders

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

2,486
1,877
1,472
925
902

10.49
7.92
6.21
3.90
3.81

Other JapaneseCorporations
3,046 thousand(12.9%)MANAGEMENT STRUCTURE (As of February 22, 2023)
Director,
Chairman

Hiroo Honma

Director,
Managing Corporate Officer

Tetsu Furusawa

Yo Okabe*

Representative Director,
President

Director,
Managing Corporate Officer

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

Akira Kunisaki
Shuichi Hirose

Director

Tsutomu Kurosawa

Yuichi Sawasaki

Masayuki Kobayashi

Director,
Vice President

Director,
Managing Corporate Officer

Director (Member of the Audit &Supervisory Committee)

Hidenori Hayashi

Hiroyuki Ushimaru

Director,
Managing Corporate Officer

Hideaki Hara

Masakazu Yamazaki*

Director (Member of the Audit &Supervisory Committee)

Emi Goto*

Corporate Officer

Corporate Officer

Director (Member of the Audit &Supervisory Committee)

Yasuaki Sawachika*

Stock
Ownership
Associations
4,863 thousand(20.5%)
Financial
Institutions
7,781 thousand(32.8%)

Securities Companies
483 thousand(2.0%)

Corporate Officer

Kazuyoshi Ichikawa
Corporate Officer

Noboru Miura
Corporate Officer

Hitoshi Nagase
Corporate Officer

Masato Usui

CORPORATE INFORMATION (As of November 30, 2022)
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:

Corporate Officer

Shirou Hatasaki
Corporate Officer

Naritoshi Nakamura
Corporate Officer

Naozumi Yoshida
Corporate Officer

Yasushi Goshima*Outside director.

December 21, 1928
¥16 billion
3,226 (Group employees 7,259)
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-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.

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 “MZ F Series” of high-speed, high-precision robots. Boasting top-of-its-class capabilities
for high-speed, high precision work, a level ofversatility that ensures compatibility with a wide
range of applications, and a varied product lineup,
this series is helping to realize automation andstreamlining in production locations.