Slide 1: Financial Conference: Consolidated Business Results and Forecast
FINANCIAL CONFERENCE Consolidated Business Results and Forecast November 4, 2016 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 statemen
Slide 2: Contents
Contents 1. Consolidated Business Results for the Six Months Ended September 30, 2016 2. Consolidated Business Forecast for the Year Ending March 31, 2017 3. Progress of the 5th Mid-Term Management Plan (Supplementary Information) 1
Slide 3: 1. Consolidated Business Results for the Six Months Ended September 30, 2016
1. Consolidated Business Results for the Six Months Ended September 30, 2016 2
Slide 4: Summary of Consolidated Business Results for the Six Months Ended September 30, 2016
Summary of Consolidated Business Results for the Six Months Ended September 30, 2016 Business Environment ✓ Industrial machinery business: Railcar and semiconductor sectors were strong; however, overall demand remained stagnant. ✓ Automotive business: Overall market environment remained steady, prim
Slide 5: Summary of Consolidated Business Results for the Six Months Ended September 30, 2016
Summary of Consolidated Business Results for the Six Months Ended September 30, 2016 IFRS FY2015 1st half FY2016 1st half Increase/ Difference FY2016 1st half Decrease <Original forecast (Billions of yen) <Actual> <Actual> YOY YOY in May> Net sales 489.7 455.6 -34.2 -7.0% 450.0 Operating income 48.5
Slide 6: Quarterly Business Performance
Quarterly Business Performance 売上高 (YoY) Sales Operating Income / Margin Q2 (YOY) : Actual volume rose year-on-year due to higher Operating income results include other volume in the automotive business, despite appreciation operating expenses (Antimonopoly Act of the yen and lower volume in the ind
Slide 7: Business Results: Industrial Machinery Business
Business Results: Industrial Machinery Business Ind BRG Precision O.I O.I (%) FY2015 FY2016 FY2016 IFRS 1st half 1st half Increase/ Difference 12.4% （Billions of yen） Decrease 1st half <Actual> <Actual> YOY <Forecast> 9.9% YOY [IFRS] [IFRS] [IFRS] 7.3% 7.2% 5.4% Sales 136.6 114.7 -21.9 -16.0% 116.0
Slide 8: Business Results: Automotive Business
Business Results: Automotive Business 250 Auto BRG Auto Comp O.I O.I (%) FY2015 FY2016 FY2016 IFRS 1st half 1st half Increase/ Difference 1st half 11.5% （Billions of yen） Decrease 9.7% 9.4% 8.8% 9.2% <Actual> <Actual> YOY <Forecast> YOY [IFRS] 200 7.5% [IFRS] [IFRS] 173.5 177.9 172.2 165.4 167.7 161
Slide 9: Operating Income: Factors Behind Change
Operating Income: Factors Behind Change (FY2015 1st Half ⇒ FY2016 1st Half) (Billions of yen) 48.5 sales Decline in price Increase Reduction of external -4.9 in costs procurement costs Volume +4.9 -6.5 increase etc. -11.0 +2.3 Other operating expenses Effect of exchange rate fluctuations -6.0 27.3 F
Slide 10: Business Results by Customer Location
Business Results by Customer Location (Billions of yen) FY2015 1st half FY2016 1st half Increase/ Difference <Actual> <Actual> Decrease YOY YOY Net sales 489.7 455.6 -34.2 -7.0% Japan 162.0 157.2 -4.8 -2.9% Non-Japan 327.8 298.4 -29.4 -9.0% (Non-Japan ratio) (66.9%) (65.5%) The Americas 92.3 82.7 -9
Slide 11: Inventories / Interest-Bearing Debt, Capital Expenditure / Depreciation and Amortization
Inventories / Interest-Bearing Debt, Capital Expenditure / Depreciation and Amortization Inventories Capital Expenditure (Billions of yen) (Billions of yen) Japan Non-Japan Inventory tumover Japan Non-Japan 6.9 7.2 7.1 33.5 140.2 130.6 125.8 21.5 15.8 19.5 90.1 83.0 76.2 11.1 9.2 17.6 50.1 47.5 49.5
Slide 12: 2. Consolidated Business Forecast for the Year Ending March 31, 2017
2. Consolidated Business Forecast for the Year Ending March 31, 2017 11
Slide 13: Summary of Consolidated Business Forecast
Summary of Consolidated Business Forecast for the Year Ending March 31, 2016 Forecasted Business Environment ✓ Industrial machinery business: Demand adjustment to continue, no clear driver for recovery anticipated. ✓ Automotive business: Overall market will remain steady, although uncertainty remain
Slide 14: Summary of Consolidated Business Forecast for the Year Ending March 31, 2017 (FY2016)
Summary of Consolidated Business Forecast for the Year Ending March 31, 2017 (FY2016) IFRS FY2015 FY2016 Increase/ (Billions of yen) Full year 1st half Full year Decrease Change <Actual> <Actual> <May forecast> YOY YOY Net sales 975.3 455.6 920.0 -55.3 -5.7% Operating income 89.5 27.3 65.0 -24.5 -27
Slide 15: 3. Progress of the 5th Mid-Term Management Plan
3. Progress of the 5th Mid-Term Management Plan 14
Slide 16: The 5th MTP Outline
The 5th MTP Outline 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 Increase and stabilize Excellence profitability and
Slide 17: Industrial Machinery Business: Business Environment and Forecast
Industrial Machinery Business 1 Business Environment and Forecast Demand trend by Sector （Billions of yen） Sales Precision Machinery Sector 2H vs 1H FY17 vs FY16 and Parts Home Appliances → ↑ 300 276.4 259.8 243.0 242.0 44.0 Steel Plant Facilities ↓↓ ↑ 216.1 37.3 41.7 40.0 200 33.0 Fluid Machinery →
Slide 18: Industrial Machinery Business: 5th MTP Status of Key Initiatives
Industrial Machinery Business 2 The 5th MTP: Status of Key Initiatives Wind turbines Railways Expansion of Giant Bearings Expansion in overseas projects 140 Sales to Wind turbine sector 140 Sales to Railcar sector 120 120 100 100 80 80 60 60 40 40 20 20 0 0 (Index) FY15 FY16 FY17 FY18 (Index) FY15 F
Slide 19: Industrial Machinery Business: 5th MTP Status of Key Initiatives
Industrial Machinery Business 3 The 5th MTP: Status of Key Initiatives Aftermarket Single Row Medium Ball Bearings Focus on 3 segments Focus Product ■Distributors Focus sector, regions ・Channel Management OTHERS JAPAN Industry Manage distributor certification policy motor ASEAN to reflect regional c
Slide 20: Automotive Business: Vehicle Production and Business Forecast
Automotive Business 1 Vehicle Production and Business Forecast Global Vehicle Production Volume Sales （Billions of yen） Japan North America Europe China ASEAN6 Others （unit : M） 800 100.0 92.5 92.2 689.1 87.8 89.1 657.0 656.0 85.8 Components Automotive 81.4 13.9 14.0 590.5 80.0 14.5 14.3 13.4 600 14
Slide 21: Automotive Business: Powertrain business
Automotive Business 2 The 5th MTP : Status of Key Initiatives : Powertrain business Powertrain Business Transmission Market Forecast (by type) PT Bearing/AT Components Sales Forecast （unit : M ） AT + CVT Needle Roller FY18 FY21 vs. FY15 Bearings vs. FY15 vs. FY18 +10 Million Ball Bearings As of May
Slide 22: Automotive Business: Steering & Actuator business
Automotive Business 3 The 5th MTP : Status of Key Initiatives : Steering & Actuator business Steering Business Actuator Business Power steering system demand forecast (by type) (M cars) Electric brake demand forecast （unit : M ） 100 120 (NSK forecast) (Source: IHS) HPS 100 80 Vehicle Rack EPS 80 Pro
Slide 23: FY2016 2H Key Issues
Management policy for 2H of the first year of the 5th MTP FY2016 2H Key Issues ●Stick to original plan, overcoming low-growth economy and appreciation of the yen ✓ Enhance business profitability (ensure implementation of improvement plans and key projects) ✓ Thoroughly manage investment projects and
Slide 24: (Supplementary Information)
(Supplementary Information) 23
Slide 25: Sales and O.I. by Business Segment
(Supplementary Information) Sales and O.I. by Business Segment FY2015 FY2016 Increase/ FY2016 (Billions of yen) Decrease Change 1st half 1st half YOY 1st half YOY <Actual> <Actual> <May Forecast> Net sales 489.7 455.6 -34.2 -7.0% 450.0 Industrial machinery business 136.6 114.7 -21.9 -16.0% 116.0 Ind
Slide 26: Consolidated Balance Sheets
(Supplementary Information) Consolidated Balance Sheets Assets Liabilities and Net Assets (Billions of yen) (Billions of yen) Non-current assets Current assets Net assets Non-current liabilities Current liabilities Ratio of net worth to total capital 1,081.8 Change from Change from 1,032.4 FY2015 4Q
Slide 27: Capital Expenditure, Depreciation and Amortization, R&D Expenses
(Supplementary Information) Capital Expenditure, Depreciation and Amortization, R&D Expenses (Billions of yen) FY2015 FY2016 1st half FY2016 <Actual> <Actual> <Forecast> Capital expenditure (※) 55.0 19.5 62.0 ※Including intangible assets (Billions of yen) FY2015 FY2016 1st half FY2016 <Actual> <Actu