Slide 1: Financial Conference: Consolidated Business Results and Forecast
FINANCIAL CONFERENCE Consolidated Business Results and Forecast May 14, 2018 NSK Ltd. Cautionary Statements with Respect to Forward-Looking Statements Statements made in this report with respect to plans, strategies and future performance that are not historical fact are forward-looking statements.
Slide 2: Contents
Contents 1． Consolidated Business Results for the Year Ended March 31, 2018 2． Consolidated Business Forecast for the Year Ending March 31, 2019 3． Progress of the 5th Mid-Term Management Plan (Supplementary Information) Copyright NSK Ltd. All Rights Reserved. 1
Slide 3: Consolidated Business Results for the Year Ended March 31, 2018
１．Consolidated Business Results for the Year Ended March 31, 2018 Copyright NSK Ltd. All Rights Reserved. 2
Slide 4: Summary of Consolidated Business Results for the Year Ended March 31, 2018
Summary of Consolidated Business Results for the Year Ended March 31, 2018 Business Environment ✓ Industrial machinery business: Robust demand. Strong recovery in Japan and China. ✓ Automotive business: Despite adjustment in NA market, moderate growth continued in other regions. Growth in AT busines
Slide 5: Summary of Consolidated Business Results for the Year Ended March 31, 2018
Summary of Consolidated Business Results for the Year Ended March 31, 2018 Increase/ FY2016 FY2017 Difference FY2017 Decrease <Actual> <Actual> YOY <Nov FCST> (Billions of yen) YOY Net sales 949.2 1,020.3 +71.2 +7.5% 1,000.0 Operating income 65.3 97.9 +32.5 +49.8% 92.0 <%> <6.9%> <9.6%> <9.2%> Incom
Slide 6: Sales & Operating Income Results by Business Segment
Sales & Operating Income Results by Business Segment Increase/ FY2016 FY2017 Difference FY2017 Decrease YOY (Billions of yen) <Actual> <Actual> YOY <Nov FCST> Total Net sales 949.2 1,020.3 +71.2 +7.5% 1,000.0 Operating income 65.3 97.9 +32.5 +49.8% 92.0 <%> 6.9% 9.6% 9.2% Industrial Net sales 226.9
Slide 7: Business Results: Industrial Machinery Business
Business Results: Industrial Machinery Business Ind BRG Precision O.I O.I (%) Increase/ FY2017 14.2% FY2016 FY2017 Decrease Difference 11.8% YOY <Nov 8.1% 7.7% 8.8% 7.3% <Actual> <Actual> YOY FCST> 6.8% （Billions of yen） 2.9% 68.5 70.8 Net sales 226.9 266.2 +39.3 +17.3% 259.0 64.3 61.5 62.6 57.5 14.
Slide 8: Business Results: Automotive Business
Business Results: Automotive Business Auto BRG Auto Comp O.I O.I (%) Increase/ FY2017 9.5% 10.8% 9.9% 9.9% 8.8% FY2016 FY2017 Decrease Difference 9.3% 7.4% 7.9% YOY <Nov <Actual> <Actual> YOY FCST> 187.8 183.6 （Billions of yen） 178.1 182.8 174.2 178.0 171.2 164.3 Net sales 696.3 723.6 +27.3 +3.9% 71
Slide 9: Operating Income: Factors Behind Change (FY2016 to FY2017)
Operating Income: Factors Behind Change (FY2016 ⇒ FY2017) (Billions of yen, Figures are rounded to the nearest 100 million yen) Other operating expenses/ Equity method profits 97.9 Effect of +17.4 exchange rate fluctuations +7.3 65.3 sales Decline in price Volume increase etc. +6.3 Increase Reductio
Slide 10: Sales Results by Customer Location
Sales Results by Customer Location FY2016 FY2017 Increase / Decrease Difference <Actual> <Actual> YOY YOY (Billions of yen) Net sales 949.2 1,020.3 +71.2 +7.5% Japan 330.5 372.1 +41.6 +12.6% Non-Japan 618.7 648.2 +29.5 +4.8% <Non-Japan ratio> <65.2%> <63.5%> The Americas 165.2 155.5 -9.7 -5.9% Europ
Slide 11: Consolidated Business Forecast for the Year Ending March 31, 2019
2． Consolidated Business Forecast for the Year Ending March 31, 2019 Copyright NSK Ltd. All Rights Reserved. 10
Slide 12: Summary of Consolidated Business Forecast for the Year Ending March 31, 2019
Summary of Consolidated Business Forecast for the Year Ending March 31, 2019 Forecasted Business Environment ✓ Industrial machinery business: Robust demand to continue, primarily in the machine tool and semiconductor sectors. ✓ Automotive business: Moderate growth in global vehicle production expect
Slide 13: Summary of Consolidated Business Forecast for the Year Ending March 31, 2019
Summary of Consolidated Business Forecast for the Year Ending March 31, 2019 FY2017 FY2018 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Difference Decrease YOY (Billions of yen) <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> YOY Net sales 493.3 527.0 1,020.3 509.0 5
Slide 14: Forecast by Business Segment
Forecast by Business Segment FY2017 FY2018 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Difference Decrease YOY <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> (Billions of yen) YOY Total Net sales 493.3 527.0 1,020.3 509.0 511.0 1,020.0 -0.3 -0.0% Operating income 4
Slide 15: Operating Income: Factors Behind Change (FY2017 to FY2018 Forecast)
Operating Income: Factors Behind Change (FY2017 ⇒ FY2018 Forecast) (Billions of yen) Other operating Effect of expenses/ Equity exchange rate method profits fluctuations +2.4 97.9 -5.0 98.0 Volume +6.0 -5.0 increase etc. Reduction of external Decline in procurement costs etc. sales price -7.3 +9.0 I
Slide 16: Business Forecast by Customer Location (FY2018)
Business Forecast by Customer Location (FY2018) FY2017 FY2018 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Difference Decrease YOY (Billions of yen) <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> YOY Net sales 493.3 527.0 1,020.3 509.0 511.0 1,020.0 -0.3 -0.0% Japan
Slide 17: The 5th MTP Final-year Management Policy: Key Initiatives of FY2018
The 5th MTP Final-year Management Policy Key Initiatives of FY2018 ●The final year of the 5th MTP ✓ Robust demand environment. Secure strong profit in growth fields and core fields. ✓ Absorb and recover cost hike factors (raw materials, labor). ✓ Maintain focus on achieving double-digit OI margin. ✓
Slide 18: Progress of the 5th Mid-Term Management Plan
3．Progress of the 5th Mid-Term Management Plan Copyright NSK Ltd. All Rights Reserved. 17
Slide 19: The 5th MTP Concept
The 5th MTP Concept NSK Vision 2026 Setting the Future in Motion Embark on new chapter in evolution towards next 100 years Sustainable Growth Deliver new value to society Work together with stakeholders Operational Reconstruct profit base Innovate Excellence Increase and stabilize profitability Mono
Slide 20: Consolidated Business Trend
Consolidated Business Trend The 5th Mid-term Plan Operating Income % 10.0% 9.7% 9.6% 10.0% 9.6% MTP (Billions of yen) 8.7% 9.0% 7.8% Fcst 6.6% 6.8% 6.1% 6.1% 6.9% 5.0% 4.4% (Billions of yen) 1.9% 1,020.3 1,020.0 1,000.0 120 3.4% 3.4% 974.9 975.3 Fcst MTP 1,000 97.3 949.2 98.0 100.0 Net Sales (Left)
Slide 21: Industrial Machinery Business: Business Environment and Forecast
Industrial Machinery Business: 1 Business Environment and Forecast Demand trend by Sector （Billions of yen） Sales Actual Forecast Precision Machinery FY17 2H FY18 1H FY18 2H 300 276.4 283.0 266.2 Sector vs. vs. vs. and Parts 243.4 FY17 1H FY17 2H FY18 1H 44.0 226.9 63.0 57.4 41.7 Home Appliances ↑ →
Slide 22: Industrial Machinery Business: The 5th MTP Status of Key Initiatives
Industrial Machinery Business: 2 The 5th MTP: Status of Key Initiatives Expand presence in industrial market over mid- to long-term. Restored OI to double-digit range, striving for further improvement. <FY18 Industrial Machinery Business Sales vs. MTP> Further development in core fields -Focus on gr
Slide 23: Industrial Machinery Business: The 5th MTP Status of Key Initiatives
Industrial Machinery Business: 3 The 5th MTP: Status of Key Initiatives Further development in core fields Rebuild AM enhancement plan Improve Multinational management system × Strengthen production capability profitability Regional strategies -Promote region-specific sales Capacity increase × O
Slide 24: Automotive Business: Vehicle Production and Business Forecast
Automotive Business： 1 Vehicle Production and Business Forecast Global Vehicle Production Volume （Billions of yen） Sales Japan North America Europe China ASEAN6 Others （unit : M） 800 723.6 Source: IHS Automotive, NSK Estimates 705.5 696.3 706.0 100.0 95.1 97.4 657.0 94.4 89.2 Components 87.8 Automot
Slide 25: Automotive Business: The 5th MTP Status of Key Initiatives
Automotive Business: 2 The 5th MTP: Status of Key Initiatives Continued growth in powertrain business and contribution to automotive new technologies Powertrain business: <FY18 Automotive Business Sales vs. MTP> Sales continue to grow. Respond to the growing needs （Billions of yen） in AT market an
Slide 26: Automotive Business: EV, Electrification and Autonomous Driving
Automotive Business: 3 The 5th MTP: Status of Key Initiatives EV・Electrification Autonomous Driving EV drive unit Steer by Wire Create new products to maximize the potential performance of traction motors Develop steering column for autonomous for EVs (downsizing, high-efficiency, quietness) Tra
Slide 27: (Supplementary Information)
(Supplementary Information) Copyright NSK Ltd. All Rights Reserved. 26
Slide 28: Sales and O.I. by Geographical Segment
(Supplementary Information) Sales and O.I. by Geographical Segment FY2016 FY2017 Increase/ Full year Full year Decrease Difference Full year <Actual> <Actual> YOY <Nov FCST> (Billions of yen) YOY Net sales 949.2 1,020.3 +71.2 +7.5% 1,000.0 Japan 489.1 542.5 +53.4 +10.9% 549.0 The Americas 161.0 152.
Slide 29: Quarterly Business Performance
(Supplementary Information) Quarterly Business Performance (Billions of yen) Net sales 300 264.3 262.7 242.1 251.5 243.8 249.5 231.8 223.8 200 100 0 FY16 Q1 Q2 Q3 Q4 FY17 Q1 Q2 Q3 4Q Operating income Net income attributable to owners of the parent Operating income margin (Billions of yen) 9.6% 10.6%
Slide 30: Consolidated Balance Sheet
(Supplementary Information) Consolidated Balance Sheet Assets Liabilities / Total equity Current liabilities Non-Current assets Current assets Non- Current liabilities Total equity Change （Billions of yen） Change Ratio of net worth to total capital from FY16 from FY16 1,092.3 （Billions of yen） +48.4
Slide 31: Inventories / Interest-Bearing Debt, Capital Expenditure / Depreciation
(Supplementary Information) Inventories / Interest-Bearing Debt, Capital Expenditure / Depreciation and Amortization Inventories Capital Expenditure Non-Japan Japan Inventory turnover Japan Non-Japan 7.4 7.2 （Times） 68.8 (Billions of yen) 58.6 (Billions of yen) 131.8 143.1 29.6 88.3 27.1 81.6 39.2 5
Slide 32: Capital Expenditure, Depreciation and amortisation, R&D Expenses
(Supplementary Information) Capital Expenditure, Depreciation and amortisation, R&D Expenses FY2016 FY2017 FY2018 5th MTP 5th MTP FY2016-FY2018 FY2016-FY2018 <Actual> <Actual> <Forecast> ＜Revised FCST＞ <Original Plan> (Billions of yen) Capital Expenditure 58.6 68.8 85.0 212.4 180.0 Depreciation and