Slide 1: Financial Conference: Consolidated Business Results and Forecasts
FINANCIAL CONFERENCE Consolidated Business Results and Forecasts & Review of Mid-Term Plan Progress (FY’06 FY’08) November 02, 2007 NSK Ltd. Cautionary Statements with Respect to Forward-Looking Statements Statements made in this report with respect to plans, strategies and future performance that a
Slide 2: Contents
Contents Consolidated Business Results for the Six Months Ended September 30, 2007 Consolidated Business Forecasts for the year Ending March 31, 2008 Review of Mid-term Plan Progress (FY’06-FY’08) (Supplementary Information) 1
Slide 3: Consolidated Business Results for the Six Months Ended September 30, 2007
1. Consolidated Business Results for the Six Months Ended September 30, 2007 2
Slide 4: Summary of Consolidated Business Results
Summary of Consolidated Business Results for the Six Months Ended September 30, 2007 Business BusinessEnvironment Environment Business Businessenvironment environmentcontinued continuedto tobe berobust robustoverall overall Industrial Industrialmachinery machinerybearings : bearings: Demand Demandre
Slide 5: Summary of Consolidated Business Results
Summary of Consolidated Business Results for the Six Months Ended September 30, 2007 100 Million Increase/ FY’ FY’06:1st half FY’ FY’07:1st half Difference FY’ FY’07:1st half Decrease <Actual> <Actual> YOY <Original forecast> YOY Sales 3,493 3,693 +200 +5.7% 3,600 Operating income 300 316 +16 +5.2%
Slide 6: Business Results By Business Segment
Business Results By Business Segment Increase/ FY’ FY’06:1st half FY’ FY’07:1st half Difference FY’ FY’07:1st half 100 Million <Actual> <Actual> Decrease YOY <Original forecast> YOY Sales 3,493 3,693 +200 +5.7% 3,600 Industrial bearings 1,056 1,148 +92 +8.7% 1,124 Automotive products 1,922 2,091 +16
Slide 7: Business Segment Information: Industrial Machinery Bearings
Business Segment Information Industrial Machinery Bearings Sales Sales Operating income/margin Operating income/margin ¥100 Million ¥100 Million Total Totalsales salesininthis thissegment segmentincreased increased8.7% 8.7%YOY YOYbacked backedby bystrong strongdemand demandrelated related totocapita
Slide 8: Business Segment Information: Automotive Products
Business Segment Information Automotive Products Sales Sales Operating income/margin Operating income/margin ¥100 Million ¥100 Million Exports Exportsfrom fromJapan Japanincreased. increased. Demand Demandenvironment environmentininnon -Japan sites, non-Japan sites, particularly in China, remained r
Slide 9: Business Segment Information: Precision Machinery and Parts
Business Segment Information Precision Machinery and Parts Sales Sales Operating income/margin Operating income/margin ¥100 Million ¥100 Million Demand Demandfrom frommachine machinetool toolmakers makerscontinued continuedto togrow. grow.However, However,dema nd from demand from semiconductors/liqu
Slide 10: Operating Income: Improvement Factors
Operating Income: Improvement Factors (FY’06 1st half FY’07 1st half) ¥100 Million 1st half of FY’07 Effect of YOY Increase of exchange rate fluctuations ¥316 ¥16 External Decline procurement +21 ¥300 in sales prices cost reduction etc. 1st half of FY’06 Increases Profit -22 in other contribution +3
Slide 11: Business Results by Geographical Segment
Business Results by Geographical Segment 100 Million Increase/ FY’ FY’06:1st half FY’ FY’07:1st half Difference FY’ FY’07:1st half Decrease <Actual> <Actual> YOY <Original forecast> YOY Sales 3,493 3,693 +200 +5.7% 3,600 Japan 2,538 2,629 +91 +3.6% 2,614 The Americas 502 545 +43 +8.6% 522 Europe 618
Slide 12: Business Results by Customer Location
Business Results by Customer Location Increase/ 100 Million FY’ FY’06:1st half FY’ FY’07:1st half Difference FY’ FY’07:1st half Decrease <Actual> <Actual> YOY <Original forecast> YOY Sales 3,493 3,693 +200 +5.7% 3,600 Japan 1,764 1,857 +93 +5.3% 1,857 Non-Japan 1,729 1,836 +107 +6.2% 1,743 Non-Japan
Slide 13: Consolidated Balance Sheets
Consolidated Balance Sheets 100 Million Increase/ FY’06 FY’07 Decrease 1st half 2nd half 1st half YOY Assets Current assets 3,250 3,891 3,812 -79 Non-current assets 4,212 4,267 4,363 +96 Total assets 7,462 8,158 8,175 +17 Liabilities and net assets Current liabilities 2,693 2,975 2,924 -51 Non-curre
Slide 14: Inventories/Interest-Bearing Debts/Capital Expenditures/Depreciation
Inventories/Interest-Bearing Debts/ Capital Expenditures/Depreciation (¥100 Million) Inventories (¥100 Million) Interest-bearing debts Inventory turnover (times) Net D/E Ratio Non-Japan Non-Japan Japan Japan (¥100 Million) Capital expenditures (¥100 Million) Depreciation Non-Japan Non-Japan Japan Ja
Slide 15: Consolidated Business Forecasts for the Year Ending March 31, 2008
1. Consolidated Business Forecasts for the Year Ending March 31, 2008 14
Slide 16: Forecasts for the Year Ending March 31, 2008: Revised Business Forecasts
Forecasts for the Year Ending March 31, 2008 Revised Revised Business Business Forecasts Forecasts Upward Upwardrevisions revisionswere weremade madeto toforecasts forecastsfor forboth bothsales salesand andprofi ts profits announced announcedininMay, May,2007 2007 Sales: ¥76.5 billion, Sales:¥76.5
Slide 17: Key Strategies for the 2nd Half
Key Strategies for the 2nd Half of the Year Ending March 31, 2008 Key Strategies Maintain our consistent implementation of Steadily capture growth strategies and demand in growing fields profitability improvement Respond quickly to Steadily deal with changes in business cost-increase factors Environ
Slide 18: Forecasts for the Year Ending March 31, 2008
Forecasts for the Year Ending March 31, 2008 100 Million FY’06 FY’07 Increase/ Full year 1st half 2nd half Full year Difference Full year Decrease Actual Actual Revised forecast Revised forecast YOY Original forecast YOY Sales 7,172 3,693 3,907 7,600 +428 +6.0% 7,450 Operating 624 income 316 374 690
Slide 19: Forecasts By Business Segment
Forecasts By Business Segment 100 Million FY’06 FY’07 Full year 1st half 2nd half Full year Increase/ Full year decrease Actual Actual Revised forecast Revised forecast YOY Original forecast Sales 7,172 3,693 3,907 7,600 +428 7,450 Industrial bearings 2,163 1,148 1,212 2,360 +197 2,328 Automotive pr
Slide 20: Forecasts By Geographical Segment
Forecasts By Geographical Segment 100 Million FY’06 FY’07 Increase/ Full year 1st half 2nd half Full year Full year Decrease Actual Actual Revised forecast Revised Forecast Original Forecast YOY Sales 7,172 3,693 3,907 7,600 +428 7,450 Japan 5,223 2,629 2,776 5,405 +182 5,421 The Americas 1,029 545
Slide 21: Forecasts By Customer Location Sales
Forecasts By Customer Location 100 Million FY’06 FY’07 Full year 1st half 2nd half Full year Increase/ Full year Actual Actual Revised forecast Revised Forecast Original Forecast Decrease YOY Sales 7,172 3,693 3,907 7,600 +428 7,450 Japan 3,644 1,857 1,963 3,820 +176 3,817 Non-Japan 3,528 1,836 1,94
Slide 22: Review of Mid-term Plan Progress (FY'06-'08)
1. Review of Mid-term Plan Progress (FY’06-’08) 21
Slide 23: Summary of Mid-term Plan
Summary of Mid-term Plan Mid-term Plan (FY’06-’08) Outline Numerical target Targets (FY’08) Mid-term Vision (announced in Feb. 2006) To Become No.1 in Total Quality Sales ¥740 billion Strengthen: Operating income Manufacturing Capability ¥ 74 billion Growth Product Development Capability Improve Str
Slide 24: Review of Mid-term Plan By Business Segment
Review of Mid-term Plan By Business Segment Sales Operating income/margin Industrial machinery 14.8% bearings 14.6% 14.2% Announced in Feb. ‘06 11.3% 13.7% 14.0% Mid-term Plan (FY’06-’08) 13.2% Precision ¥100 Million machinery &parts Excluding Amatsuji 10.0% 8,000 8.7% 9.1% 7,600 Other/ 7,400 7,172
Slide 25: Industrial Machinery Bearings
Industrial Machinery Bearings Basic Policy: Expand sales by strengthening our marketing and manufacturing capabilities Reinforce global sales expansion Strengthen marketing capability Improve key business sector-oriented activities Expand sales of roller bearings Sectors such as steels/machine tool/
Slide 26: Industrial Machinery Bearings: Roller Bearings Growth Driver
Industrial Machinery Bearings “Roller bearings” Growth driver in industrial machinery bearings Sales of roller bearings Expand NSK’s presence in growth driving areas Steelmaking equipment Strengthen ability to respond to demand expansion in emerging markets. Index Machine tools Strengthen sales expa
Slide 27: Automotive Products
Automotive Products Basic Policy: Reinforce profitability and order-winning activities Reinforce profitability Further strengthen NSK’s stable source of income ✓ effects of capital 7.8% investments, and accelerate bringing the 6.7% ¥100 Million 5.8% effects into business performance 5.4% 5.6% ’ 2500
Slide 28: Automotive Products: Strengthen Business Expansion
Automotive Products Strengthen business expansion Aiming for further growth in automotive industry ✓ Strategic investments in Asia (China, India and the ASEAN) Newly develop our business into Improve profitability through local emerging regions in Asia production Strengthen ability to respond to loc
Slide 29: Precision Machinery and Parts
Precision Machinery and Parts Basic Policy: Improve profitability by focusing on linear motion products ¥100 Million) Operating income margin (%) Sales Operating income FY’ FY’05 <Actual> FY’ FY’06 <Actual> FY’ FY’07 <Forecast> FY’ FY’08 <Plan> Increase sales in Asia Promote strategies (China, Taiwa
Slide 30: Priorities for Achieving Mid-term Plan Targets
Priorities for Achieving Mid-term Plan Targets To Achieve Mid-term Targets Accelerate bringing effects of capital Maximize output to investments into business performance growing business areas Strive to continue implementation of profitability improvement Maximize profitability Promote global expan
Slide 31: Supplementary Information: Capex, Depreciation, R&D
(Supplementary Information) For the Year Ending Mar. 31, 2008) FY’06 FY’07 1st half FY’07 full year ¥100 Million Actual Actual Forecast Capital expenditures 362 193 465 Japan 234 113 321 Non-Japan 128 80 144 The Americas 36 18 27 Europe 32 24 41 Asia 60 38 76 Excluding intangible assets FY’06 FY’07
Slide 32: Supplementary Information: Mid-term Plan Sales & Profits by Segment
(Supplementary Information) Sales & Profits of Mid-term Plan by Business Segment Announced in Feb. ‘06 ¥100 Million FY’05 <Actual> FY’06 <Actual> FY’07 <Forecast> FY’08 <Mid- <Mid-term plan> Industrial machinery bearings Sales 1,956 2,163 2,360 2,300 Operating income % 221 <11.3%> 296 <13.7%> 335 <1
Slide 33: Supplementary Information: Mid-term Target for Profitability Improvement
(Supplementary Information) Mid-term Target for Profitability Improvement Announced in Feb. ‘06 FY’05 FY’06 FY’07 FY’08 ¥100 Million <Actual> <Actual> <Forecast> <Plan> Operating income margin 6.8% 8.7% 9.1% 10% ROE 12.1% 14.0% 15% Plan Total of 3 years: 1,000 Capital expenditures 473 362 465 Plan T