Slide 1: Consolidated Business Results and Forecast
FINANCIAL CONFERENCE Consolidated Consolidated Business Business Results Results and and Forecast Forecast November 7, 2011 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 h
Slide 2: Contents
Contents Consolidated Business Results 1 for the Six Months Ended September 30, 2011 Consolidated Business Forecast 2 for the Year Ending March 31, 2012 3 Progress of Mid-term Plan (Supplementary Information) 1
Slide 3: Consolidated Business Results for the Six Months Ended September 30, 2011
Consolidated Business Results 1 for the Six Months Ended September 30, 2011 2
Slide 4: Summary of Consolidated Business Results for the Six Months Ended September 30, 2011
Summary of Consolidated Business Results for the Six Months Ended September 30, 2011 Business Environment ✓Industrial Machinery : Steady demand expansion due to increased demand in emerging countries. ✓Automotive Products: Demand boosted by customers’ high output during recovery from the Great East
Slide 5: Summary of Consolidated Business Results for the Six Months Ended September 30, 2011
Summary of Consolidated Business Results for the Six Months Ended September 30, 2011 （Billions of yen） ‘11/3 1st half ‘12/3 1st half Increase/ Difference ‘12/3 1st half decrease ＜Actual＞ ＜Actual＞ YOY YOY ＜Original forecast＞ Sales 352.8 351.9 -0.9 -0.3% 340.0 Operating income 20.3 22.9 +2.6 +13.0% 18
Slide 6: Quarterly Business Performance
Quarterly Business Performance Sales Operating income/Margin Despite decrease in industrial machinery Operating income recovered to the same bearing sales, total 2Q sales increased level as the previous year’s highest due to compared to 1Q sales thanks to recovery in the recovery in Automotive busin
Slide 7: Results by Business Segment
Results by Business Segment (Billions of yen) ’11/3 1st half ’12/3 1st half Increase/ Difference ’12/3 1st half decrease <Original <Actual> <Actual> YOY YOY Forecast> Sales 352.8 351.9 -0.9 -0.3% 340.0 Industrial machinery 127.5 133.1 +5.6 +4.4% 130.0 business Industrial machinery bearings 98.7 108.
Slide 8: Quarterly Business Segment Performance
Quarterly Business Segment Performance Industrial Machinery Business (Billions of yen) Sales (Billions of yen) Operating income / Margin 120 15 Industrial Precision Machinery Systemized Machinery and Parts Products 100 11.3% 11.3% 9.2% 9.3% 80 65.7 65.4 66.2 68.0 10 6.1% 6.8% 61.8 4.1 2.6 65.1 2.8 5
Slide 9: Operating income: Factors Behind Increase
Operating income : Factors Behind Increase (11/3 1st half ⇒ 12/3 1st half) (Billions of Yen) Reduction of external ’11/3 1st half procurement costs etc. ’12/3 1st half YOY increase of 22.9 +3.8 2.6 Effect of volume increase Decline in 20.3 sales price Effect of exchange +5.2 -2.0 rate fluctuations +
Slide 10: Business Results by Customer Location
Business Results by Customer Location Increase/ ’11/3 1st half ’12/3 1st half decrease Difference (Billions of yen) YOY <Actual> <Actual> YOY Sales 352.8 351.9 -0.9 -0.3% Japan 176.0 170.9 -5.1 -2.9% Non- Non-Japan 176.8 181.0 +4.2 +2.4% (Non- (Non-Japan ratio) (50.1%) (51.2%) The Americas 43.6 39.0
Slide 11: Business Results by Geographical Segment
Business Results by Geographical Segment 【Japan】 【The Americas】 ’11/3 1st half ’12/3 1st half Increase/ ’11/3 1st half ’12/3 1st half Increase/ Difference Difference (Billions of yen) decrease YOY (Billions of yen) decrease YOY Actual Actual YOY Actual Actual YOY Sales 264.0 262.7 -1.3 -0.5% Sales 4
Slide 12: Consolidated Balance Sheets
Consolidated Balance Sheets 資 産 Assets 負債／純資産 Liabilities and Net Assets Non- Non-current assets Current Assets Non- Non-Current Current Ratio of Net Worth Net Assets Liabilities Liabilities to Total Capital （Billions of yen） （Billions of yen） Change YOY Change YOY 774.8 788.6 793.5 +4.9 774.8 788.6
Slide 13: Inventory/Interest-Bearing Debt, Capital Expenditure/Depreciation
Inventory/ Interest-Bearing Debt, Capital Expenditure/ Depreciation 棚卸資産 Inventories 設備投資 Capital Expenditure Japan Non- Non-Japan Inventory turnover Japan Non- Non-Japan （Billions of yen） （Billions of yen） 6.7 6.5 6.2 23.1 117.0 21.8 111.6 104.7 15.6 11.3 54.0 58.9 63.4 12.9 9.9 50.7 52.7 53.6 11.8
Slide 14: Consolidated Business Forecast for the Year Ending March 31, 2012
Consolidated Business Forecast 2 for the Year Ending March 31, 2012 13
Slide 15: Summary of Consolidated Business Forecast for the Year Ending March 31, 2012
Summary of Consolidated Business Forecast for the Year Ending March 31, 2012 Revised Business Forecast ✓ Maintain sales and operating income to the original plan in June, despite concerns about slowdown in some industrial sectors and the appreciation of the Yen. ✓ YOY Increase in both sales and oper
Slide 16: Summary of Consolidated Business Forecast for the Year Ending March 31, 2012
Summary of Consolidated Business Forecast for the Year Ending March 31, 2012 （Billions of yen） ’11/3 ’12/3 Full Year 1st half 2nd half Full Year Difference Change Full Year <Actual> <Actual> <Revised Forecast> <Revised Forecast> YOY YOY <Original Forecast> Sales 710.4 351.9 378.1 730.0 +19.6 +2.8% 7
Slide 17: Key strategies for the Year Ending March 31, 2012
Key strategies for the Year Ending March 31, 2012 Profitability improvement initiatives - Step up measures for resistance to Ex-rate fluctuations (Local production, promote localization, optimal parts procurement) - Reorganize global production network - Reduce external procurement costs - Respond t
Slide 18: Forecast by Business Segment
Forecast by Business Segment (Billions of yen) 11/ 3 12/3 Increase/ Full year 1st half 2nd half Full year decrease Change Full year <Actual> <Actual> <Revised forecast> <Revised forecast> YOY YOY <Original forecast> Sales 710.4 351.9 378.1 730.0 +19.6 +2.8% 730.0 Industrial machinery business 259.1
Slide 19: Operating income: Factors Behind Increase
Operating income : Factors Behind Increase (’11/3 ⇒ ’12/3 Revised forecast) （Billions of yen） Difference from ’11/3 ’12/3 Revised forecast +6.5 External procurement cost reduction etc. 50.0 +8.2 Volume increase ’11/3 Decline in 43.5 sales price Effect of -5.0 exchange rate fluctuations +20.7 +12.5 -
Slide 20: Forecast by Customer Location
Forecast by Customer Location (Billions of yen) 11/3 12/3 1st half 2nd half Full year 1st half 2nd half Full year Increase/ decrease Change Full year <Actual> <Actual> <Actual> <Actual> <Revised forecast> <Revised forecast> YOY YOY <Original forecast> Sales 352.8 357.6 710.4 351.9 378.1 730.0 +19.6
Slide 21: Forecast by Geographical Segment
Forecast by Geographical Segment (Billions of yen) 11/3 12/3 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Change Full year Decrease <Actual> <Actual> <Actual> <Actual> <Actual> <Actual> YOY YOY <Original forecast> Sales 352.8 357.6 710.4 351.9 378.1 730.0 +19.6 +2.8% 730.0 Japan
Slide 22: Progress of Mid-Term Plan
3 Progress of Mid-Term Plan 21
Slide 23: Outline of the FY'09~FY'12 Mid-Term Plan
Outline of the FY’09~FY’12 Mid-Term Plan FY’03-FY’05 FY’06-FY’08 ０９～１２年度中期計画の位置付け FY’09-FY’12 FY’13-FY’15 Mid-Term Plan Mid-Term Plan Mid-Term Plan Mid-Term Plan Select & Focus strategy Growth strategy Respond to paradigm shifts Towards Business restructuring Improve profitability Organize business
Slide 24: Mid-Term Plan Progress
Mid-Term Plan Progress FY06～FY08 Mid-Term Plan FY09～FY12 Mid-Term Plan （Billions of yen） 8.7% 9.0% 8.5% Operating income % Sales 6.1% 6.8% 1,000.0 160 Operating 1,000 Income 3.4% 772.0 1.9% 780.0 800 717.2 730.0 120 710.4 647.6 587.6 600 69.3 66.0 80 62.4 400 50.0 43.5 40 200 22.1 11.3 0 0 07/3 08/3
Slide 25: Mid-Term Plan Progress - By Business Segment
Mid-Term Plan Progress –By Business Segment Industrial Machinery Business Automotive Business (Billions of Yen) (Billions of Yen) Sales Sales Machinery & Parts 400 500 450.0 424.2 438.0 Precision 300.0 Automotive 366.4 300 267.0 262.0 400 352.5 Parts 259.1 60.0 57.5 47.0 207.5 217.5 230.0 202.0 59.2
Slide 26: Growth Strategy ① Expand to Emerging countries
Growth Strategy ① Expand to Emerging countries Sales expansion to emerging countries Increase production capacity Sales in Emerging Countries / Ratio CAPEX in Asia and China / Ratio (Billions of Yen) (Billions of Yen) 43% 30% Asia Ratio Sales in Emerging Countries Ratio 60 27% 200 21% China Ratio 20
Slide 27: Growth Strategy ② Base expansion in China
Growth Strategy ② Base expansion in China Production Capacity Increase New Production Site in Inland China (Hefei Plant) in Northeastern / Inland China -12th production site in China -Establish production base in inland Area -Manpower saving and high efficiency Shenyang supported by advanced equipme
Slide 28: Growth Strategy ③ EPS
Growth Strategy ③ EPS Accelerate Global Expansion and Strong Product Development EPS EPS Demand Demand Trend Trend Demand Demand Trend Trend and and Key Key Strategies Strategies Millions of Automotive Production Vehicles Rack Type <Demand Trend> Pinion Type Column Type -EPS installation ratio conti
Slide 29: Profitability Improvement ①
Profitability Improvement ① Business Portfolio Evolution Production Ratio Improvement ■ Overall Business Segment ■ Overseas production ratio increase ◇ Improve Automotive/Industrial Machinery ratio FY2011 Target FY2010 Forecast FY2006 FY2010 Target Industrial Non-Japan Japan Machinery 35 37 65 63 50
Slide 30: Profitability Improvement ②
Profitability Improvement ② Promote Localization Manpower Saving Local procurement ratio - Manpower saving through production of materials and parts technology (Automation) - Manpower saving through capacity ◇Steel increase (APS) 70% 66% 65% Strategies for staff ◇Pre-Process Fixed cost retention rat
Slide 31: (Supplementary Information)
(Supplementary Information) 30
Slide 32: Capital expenditure, Depreciation and Amortization, R&D expenses
(Supplementary Information) Capital expenditure, Depreciation and Amortization, R&D expenses （Billions of yen） FY10 FY11 1st half FY11 Actual Actual Forecast Capital expenditure（＊） 38.7 21.8 46.0 Japan 17.5 8.9 17.0 Non-Japan 21.2 12.9 29.0 The Americas 3.0 0.7 2.5 Europe 3.3 1.8 4.5 Asia 14.9 10.4