Message from the CEO

To Our Shareholders

　We are pleased to report our business results for the interim period of the 106th term (April 1, 2011 to September 30, 2011). I would like to express my sincere gratitude for your unwavering support again during this term.

　The NOK Group has been implementing a business management plan with which it hopes to become a strong business group with high profitability, under its management policy of producing low-cost original products－backed by technology－which are useful to society, and selling them at reasonable prices all over the world.

　During this six-month period, the Japanese economy suffered from damage to production facilities, supply chain disruptions, etc. resulting from the Great East Japan Earthquake which occurred in March 2011. Although there were signs of recovery in some areas, the environment surrounding the Japanese economy remained difficult due to factors including financial instability in Europe, slowdown of the U.S. economy, and continued appreciation of the yen.

　In the term, the Group’s net sales amounted to 238,559 million yen, down 4.2% year on year. The Group recorded an operating income of 13,312 million yen, down 28.5% year on year, an ordinary income of 13,792 million yen, down 20.4% year on year and a net income of 6,907 million yen, down 30.6% year on year.

　As for the future outlook, economic uncertainties will remain as there are concerns about a possible global economic slowdown, impact of the flooding in Thailand, and currency fluctuations.
　In the automobile industry, although domestic vehicle production rebounded quickly from the supply chain disruptions resulting from the impact of the Great East Japan Earthquake, there are growing concerns about a decline in vehicle production due to the influence of the flooding in Thailand.
　In the electronic equipment industry, while demand has remained strong for smartphones and tablet PCs, there is rising anxiety about a loss of production capacity, particularly for hard disc drives (HDD), owning to the impact of the flooding in Thailand.
　In the business machinery industry, a decline in sales of copiers is feared due to deteriorating economic conditions in Europe and the U.S., despite a moderate upward trend after recovery from the impact of the Great East Japan Earthquake.

　Under these circumstances, the NOK Group will continue to promote the three-year plan that started this term under the slogan, “Building Foundations for Sustainable Growth －Ensuring Success in the Next Decade.” (For details, please refer to the “NOK Group Three-Year Plan” on page 4.)

　Although some of the Group’s plants have been affected by inundation as a result of the flooding in Thailand, we are making concerted efforts towards recovery.

　With regard to the interim dividend for this six-month period, we have decided to set it at 7.5 yen per share.
　We are earnest in our determination to endeavor to meet the expectations of our shareholders. We ask for your understanding of the current business climate and our management direction, as well as our commitment. The NOK Group greatly appreciates your continued support and guidance.