Slide 1: Consolidated Business Results for Fiscal 2021 + New Mid-Term Plan MTP2026
NSK Ltd. Consolidated Business Results for Fiscal 2021 +New Mid-Term Plan MTP2026 May 13, 2022 Akitoshi Ichii President and CEO Cautionary Statements with Respect to Forward-Looking Statements Statements made in this report with respect to plans, strategies and future performance that are not histor
Slide 2: Contents
Contents 1. Consolidated Business Results for the Year Ended March 31, 2022 2.Consolidated Business Forecast for the Year Ending March 31, 2023 3. New Mid-Term Management Plan (MTP2026) （FY2022 to FY 2026） （Supplementary Information） Copyright NSK Ltd. All Rights Reserved. 1
Slide 3: Consolidated Business Results for the Year Ended March 31, 2022
1. Consolidated Business Results for the Year Ended March 31, 2022 2.Consolidated Business Forecast for the Year Ending March 31, 2023 3. New Mid-Term Management Plan (MTP2026) （FY2022 to FY 2026） （Supplementary Information） Copyright NSK Ltd. All Rights Reserved. 2
Slide 4: Summary of Consolidated Business Results for the Year Ended March 31, 2022 (1)
Summary of Consolidated Business Results for the Year Ended March 31, 2022 (1) Business Environment ●Industrial Machinery Business: Demand remained solid primarily for sectors such as machine tools and semiconductor manufacturing equipment ●Automotive Business: Supply chain issues have been prolonge
Slide 5: Summary of Consolidated Business Results for the Year Ended March 31, 2022 (2)
Summary of Consolidated Business Results for the Year Ended March 31, 2022 (2) （Billions of yen） 2,500 250.0 ■■Sales ■■Operating Income －O.I (%) 232.4 217.2 213.5 215.0 204.3 200.0 2,000 189.4 Ongoing COVID risk, Supply chain disruption, Inflation, Geopolitical risk 5.2% 4.2% COVID-19 1,500 3.3% 2.4
Slide 6: Operating Income: Factors Behind Change (FY2020 to FY2021)
Operating Income: Factors Behind Change （FY2020 Full year ⇒ FY2021 Full year） Volume/ Mix （Billions of yen） Decrease in Increase/ procurement costs /Decrease in Decrease in other costs ✔ Impairment loss -9.0 sales price Increase in raw material ✔Transfer of land +9.8 prices /Transfer of increased in
Slide 7: Industrial Machinery Business
Industrial Machinery Business (Billions of yen) ■Ind BRG ■Precision ■S.I. ● S.I. (%) Increase/ 93.6 FY2020 FY2021 Decrease 86.9 Difference 83.2 Full year Full year YOY YOY 79.0 82.2 17.3 Actual Actual (Effect of exchange 72.3 15.9 rate fluctuations) 68.8 14.1 15.1 65.5 12.6 275.2 345.8 +70.6 58.5 10
Slide 8: Automotive Business
Automotive Business (Billions of yen) ■Auto BRG ■Auto Comp ■ S.I ● S.I.(%) Increase/ FY2020 FY2021 Decrease 135.8 129.6 Difference 114.7 131.1 121.7 Full year Full year YOY YOY 119.1 Actual Actual (Effect of exchange 116.9 112.2 rate fluctuations) 62.8 57.2 449.7 482.5 +32.8 66.0 59.2 Sales (+18.0)
Slide 9: Consolidated Business Forecast for the Year Ending March 31, 2023
1. Consolidated Business Results for the Year Ended March 31, 2022 2.Consolidated Business Forecast for the Year Ending March 31, 2023 3. New Mid-Term Management Plan (MTP2026) （FY2022 to FY 2026） （Supplementary Information） Copyright NSK Ltd. All Rights Reserved. 8
Slide 10: Consolidated Business Forecast for the Year Ending March 31, 2023
Consolidated Business Forecast for the Year Ending March 31, 2023 Business Environment / Forecast Assumptions ●Inflation such as steel prices and ocean freight costs and supply chain disruptions to continue ●Industrial Machinery Business: Demand remain strong for sectors such as machine tools and se
Slide 11: Operating Income: Factors Behind Change (FY2021 to FY2022 Forecast)
Operating Income: Factors Behind Change （FY2021 ⇒ FY2022 Forecast） Decrease in Inflation （Billions of yen） procurement costs /sales price Increase/ Decrease in Equity method other costs profits / Other Effect of Volume/ Mix operating exchange rate fluctuations expenses ✔Labor costs -6.5 ✔Depreciatio
Slide 12: Forecast for FY2022 by Segment
Forecast for FY2022 by Segment ■Industrial Machinery Business ■ Automotive business Demand trend by sector Global vehicle production (million) 95 FY21 2H FY22 1H FY22 2H 9 77 77 77 vs vs vs FY21 1H FY21 2H FY22 1H Japan 74 17 North- 8 8 Machine Tools → → → America 7 13 12 14 22 ↑ ↑ ↑ Semi conductors
Slide 13: Risk and management tasks on FY2022
Risk and management tasks on FY2022 ✓Possible risk 1. Further inflation, COVID lockdown in China, recession triggered by geopolitical risk 2. Prolonged supply chain issues > Manage production and inventory agilely ✓Promote management tasks 1. Reflect inflation costs such as steel price and ocean fre
Slide 14: New Mid-Term Management Plan MTP2026
1. Consolidated Business Results for the Year Ended March 31, 2022 2.Consolidated Business Forecast for the Year Ending March 31, 2023 3. New Mid-Term Management Plan MTP2026 （FY2022 to FY 2026） （Supplementary Information） Copyright NSK Ltd. All Rights Reserved. 13
Slide 15: Review of 6th MTP - KPI
Review of 6th MTP - KPI ■ Industrial Machinery Business hit past record, but operating margin did not reach double digits. Automotive Business recorded a loss for second consecutive year. Growth in semiconductors, machine tools and robots, shrinking automotive market, acceleration of electrification
Slide 16: MTP2026: Overall Image and Positioning
MTP2026: Overall Image and Positioning 6th MTP MTP2026 Post2026 Rebuild corporate foundation for sustainable growth FY19-20-21 FY22 ー 24 ー 26 Continue Build business base and strengthen resources in "Change & Go Beyond" to become exceling for next preparation for next growth phase new type of trilli
Slide 17: New Type of Trillion-yen Company
New Type of Trillion-yen Company Portfolio reform; 10% operating margin; 10% ROE ≫ Portfolio reform Expand Industrial 1 Machinery business 2 Deploy bearings + precision machinery to drive earnings 3 Grow new products Bearings & Beyond FY17 MTP2026 Post2026 Sales: ¥1 trillion Sales: ¥1 trillion ■ Ind
Slide 18: MTP2026 Operating Income: Factor Behind Changes
MTP2026 Operating Income: Factor Behind Changes (FY2021 ⇒ FY2026） （Billions of yen） 100.0 Effect of increased capacity, Portfolio reform +70.0 Improved steering sales Increase in and profit Supply capability DX/ Investments in digital, Super-stabilize environment, production new technologies 0 FY202
Slide 19: MTP2026 Key Priorities
MTP2026 Key Priorities We aim to be a needed and trusted company that contributes to the development of a sustainable society by creating new value through the fusion of tribology and information technology Create ESG Management new value Growth with Profitability Be needed, trusted, and Change & Go
Slide 20: Growth with Profitability – Industrial Machinery Business
Growth with Profitability – Industrial Machinery Business > Expand Industrial Machinery Business ■ Aim to capture expanding market demand in electrification, automation, digitalization ■ Strengthen supply capabilities and enhance technical services system ≫ FY26 targets: Sales of ¥450.0 billion; ope
Slide 21: Growth with Profitability – Automotive Bearings Business
Growth with Profitability – Automotive Bearings Business ＞ Respond to electrification of automobiles ■ Achieve increase in EV-related sales in excess of decline in ICE-related sales and thus surpass prior peak ■ Aim to achieve high market share in products related to low torque, high-speed rotation,
Slide 22: Growth with Profitability – Automotive Components
Growth with Profitability – Automotive Components > Restructure steering business and pursue alliances/M&As ■ Restore production volume and profitability through structural reform of steering business; return to profitability in FY23 (2nd half); achieve operating margin of 4% in FY26 ■ Utilize allia
Slide 23: Growth with Profitability – Grow New Products
Growth with Profitability – Grow New Products ■ Industrial Machinery Business Spread of automation, electrification, and predictive Acceleration of energy maintenance technologies transition Expand hydrogen-related businesses "Broaden CMS" Actuators for robots Synergies with BKV Sales target: Active
Slide 24: ESG Management – Promoting Carbon Neutrality
ESG Management – Promoting Carbon Neutrality ■ Build a carbon-neutral society through “Create and Utilize” approach ■ New target: Achieve Scope 1+2 -50% compared to FY2017 by FY2026 Achieve Scope 1+2carbon neutrality by FY2035 Environmental contribution by using “tribology” Reduce CO2 emissions from
Slide 25: MTP2026 Capital Allocation
MTP2026 Capital Allocation ■ Contributing to creating a sustainable society while continuously growing corporate value Invest for sustainable growth Growth with profitability Strengthen managerial resources ROE: 10%+ ✓Capital expenditures ROIC: 8%+ : ¥350.0 billion /5 years ESG management ≫ Ordinary
Slide 26: Supplementary Information
1. Consolidated Business Results for the Year Ended March 31, 2022 2.Consolidated Business Forecast for the Year Ending March 31, 2023 3. New Mid-term Management Plan (MTP2026) （FY2022 to FY 2026） （Supplementary Information） Copyright NSK Ltd. All Rights Reserved. 25
Slide 27: NSK's Business Environment
NSK’s Business Environment ■ Aiming for expansion in growth areas such as electrification, automation, digitalization, and carbon neutrality as changes in social issues bring about transformation of social needs and technologies New Social issues Social needs Technology transformation Growth areas d
Slide 28: Enhancement of Managerial Resources – Utilize Information Technology
Enhancement of Managerial Resources– Utilize Information Technology ■ Use information technology effectively to further strengthen quality, technology, and operational capabilities (sources of NSK's competitiveness) and transform our profit structure NSK’s strengths Quality and Operational capabilit
Slide 29: Human Capital
Growth with Profitability, Enhancement of Managerial Resources, ESG Management –Human Capital– Enhancement of Managerial ESG Management Resources Growth with Profitability “Change & Go Beyond” : Human resource development to realize management tasks in MTP2026 Provide comfortable working Develop and
Slide 30: MTP2026 Policy on Shareholder Returns
MTP2026 Policy on Shareholder Returns Continue stabilization of shareholder returns 6th MTP MTP2026 ・ Payout ratio 30-50% ￥40 per share and more (during 6th MTP) ・ Payout ratio 30-50％ ・ Acquisition of treasury shares, ・ Total return ratio: approx. 50％ Agile capital policy (Cumulative over MTP2026 pe
Slide 31: Financial Results by Business Segment (FY2021)
Supplementary Information : Financial Results by Business Segment (FY2021) (Billions of yen) FY2020 FY2021 YOY Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Decrease Difference Total Sales 315.9 431.7 747.6 417.8 447.4 865.2 +117.6 +15.7% Segment Income -13.0 17.9 4.9 16.2 12.5 2
Slide 32: Financial Results by Business Segment (FY2022)
Supplementary Information : Financial Results by Business Segment (FY2022) (Billions of yen) FY2021 Actual FY2022 FCST YOY Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Decrease Difference Total Sales 417.8 447.4 865.2 450.0 490.0 940.0 +74.8 +8.6% Segment Income 16.2 12.5 28.8 1
Slide 33: Sales by Customer Location (FY2021)
Supplementary Information : Sales by Customer Location (FY2021) Copyright NSK Ltd. All Rights Reserved. 32
Slide 34: Consolidated Balance Sheet (FY2021)
Supplementary Information: Consolidated Balance Sheet (FY2021) Assets Liabilities / Total equity (Billions (Billions of yen) of yen) +62.9 +62.9 1,234.6 1,171.7 1,234.6 1,171.7 297.0 Current 301.0 -4.0 569.9 liabilities Current 534.8 +35.1 assets Non-Current 300.1 liabilities 297.1 +2.9 50.0% Ratio
Slide 35: Inventories / Interest-Bearing Debt (FY2021)
Supplementary Information: Inventories / Interest-Bearing Debt(FY2021) Inventories Interest-bearing debt (Billions Inventory 4.9 5.0 (Billions Net D/E ratio of yen) turnover of yen) 0.28 0.27 +46.7 196.7 -29.0 332.4 303.5 150.0 68.9 -2.5 Non-Japan 66.5 +34.5 123.1 Non-Japan 88.6 263.5 -26.5 237.0 Ja
Slide 36: Capital Expenditures, Depreciation and Amortisation, R&D Expenses
Supplementary Information : Capital Expenditures, Depreciation and Amortisation, R&D Expenses FY2020 FY2021 FY2022 Actual Actual FCST （Billions of yen） Full year Q1 Q2 Q3 Q4 Full year Full year Capital Expenditures 37.3 5.2 13.6 11.9 21.6 52.3 70.0 Capital Expenditures 34.1 4.6 8.9 11.4 19.6 44.5 70
Slide 37: Mission Statement / NSK Vision 2026
Mission Statement NSK contributes to a safer, smoother society and helps protect the global environment through its innovative technology integrating Motion & Control™. As a truly international enterprise, we are working across national boundaries to improve relationships between people throughout t