During the first half of fiscal 2018, the fiscal year ending March 31, 2019, the overall Japanese economy continued to follow a gentle recovery trajectory due to improvement in the employment and income environments, along with steady improvement in capital investment and corporate earnings. Overseas, moderate economic growth continued mainly in Europe, the United States and Asia.

Under these circumstances, the NOF Group (the “Group”) is aiming for “Greater Progress,” with the basic policy of “Creating and expanding innovative value,” promoted each initiative �E“Creating products and markets,” “Improving productivity,” “Enhancing Group management” and “Promoting CSR activities” �Eunder the three-year 2019 Mid-Term Management Plan, which started in fiscal 2017. At the same time, the Group undertook many management efforts toward sustainable growth with exploring new markets by leveraging our high-function, high-value-added products, expanding sales of such products and reducing production costs.
As a result, for the first half of fiscal 2018, consolidated net sales, operating income, ordinary income, and net income attributable to owners of the parent all increased compared to the same period in the previous fiscal year.

In the second half of fiscal 2018, the Japanese economy is expected to remain on a gradual recovery path based on continued improvements in the employment and income environments, along with the positive effect of the various government policies. However, the outlook is likely to remain uncertain due to concerns regarding situations such as changes in petroleum prices and trade issues.

The Group will flexibly adapt to changes in business environments market needs and promote the creation of products and markets as well as the enhancement of productivity in its three prioritized business fields of life sciences, electronics/IT and environment/energy. We thereby aim to evolve further as a functional materials manufacturer that can provide unique products to the global market and continue our efforts to be a trusted business group with a strong presence.

We kindly ask all shareholders for your continuing support.
November 2018