Nsk Ltd. · TSE:6471
Nsk — FY2018 Earnings Presentation
39 slides from Nsk's earnings presentation, May 14, 2019
Slide 1: Financial Conference: Consolidated Business Results, Forecast, and the 6th Mid-term Plan
FINANCIAL CONFERENCE Consolidated Business Results, Forecast, and The 6th Mid-term Plan May 14, 2019 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 forw
Slide 2: Contents
Contents 1． Consolidated Business Results for the Year Ended March 31, 2019 2． Consolidated Business Forecast for the Year Ending March 31, 2020 3． The 6th Mid-Term Management Plan (Supplementary Information) Copyright NSK Ltd. All Rights Reserved. 1
Slide 3: Consolidated Business Results for the Year Ended March 31, 2019
１．Consolidated Business Results for the Year Ended March 31, 2019 Copyright NSK Ltd. All Rights Reserved. 2
Slide 4: Summary of Consolidated Business Results for the Year Ended March 31, 2019
Summary of Consolidated Business Results for the Year Ended March 31, 2019 Business Environment ✓ FY2018 1st half (Apr.-Sep.): Robust demand, record-high sales. 2nd half(Oct.-Mar.): Demand decreased. ✓ Industrial machinery business: Impact of trade frictions were felt. Capital expenditure remained s
Slide 5: Summary of Consolidated Business Results for the Year Ended March 31, 2019
Summary of Consolidated Business Results for the Year Ended March 31, 2019 Increase/ Increase/ FY2017 FY2018 FY2018 Decrease Decrease (Billions of yen) <Actual> <Actual> YOY <Feb FCST> vs Feb FCST Sales 1,020.3 991.4 -29.0 985.0 +6.4 Operating income 97.9 79.3 -18.6 83.0 -3.7 <%> <9.6%> <8.0%> <8.4%
Slide 6: Business Results: Industrial Machinery Business
Business Results: Industrial Machinery Business (Reference) Ind BRG Precision O.I. O.I.(%) Increase/ FY2017 FY2018 Decrease Difference FY2018 11.8% 14.2% 12.7% 11.9% 12.1% 12.0% YOY 8.8% 7.3% <Actual> <Actual> YOY <Feb FCST> （Billions of yen） 68.5 70.8 69.3 66.6 68.2 65.9 Sales 266.2 270.0 +3.7 +1.4
Slide 7: Business Results: Automotive Business
Business Results: Automotive Business Auto BRG Auto Comp O.I. O.I.(%) (Reference) Increase/ FY2017 FY2018 Decrease Difference FY2018 YOY 9.9% 7.9% 9.9% 8.8% 8.3% <Actual> <Actual> YOY <Feb FCST> 6.6% 6.9% （Billions of yen） 4.0% 187.8 183.6 183.3 174.2 178.0 174.3 171.6 Sales 723.6 689.7 -33.9 -4.7%
Slide 8: Operating Income: Factors Behind Change (FY2017 to FY2018)
Operating Income: Factors Behind Change (FY2017 ⇒ FY2018) (Billions of yen, Figures are rounded to the nearest 100 million yen) Reduction of 97.9 Volume/ Mix external procurement -3.0 costs etc. -4.0 +3.2 Other operating Decline in -10.9 expenses/ sales price/ Equity method profits Price increase In
Slide 9: Consolidated Business Forecast for the Year Ending March 31, 2020
2． Consolidated Business Forecast for the Year Ending March 31, 2020 Copyright NSK Ltd. All Rights Reserved. 8
Slide 10: Summary of Consolidated Business Forecast for the Year Ending March 31, 2020
Summary of Consolidated Business Forecast for the Year Ending March 31, 2020 Forecasted Business Environment ✓ Assumption: demand is to hit bottom in the 1st half and recover in the 2nd half. ✓ Risks: Protracted trade frictions, postponement in capital expenditure, no-deal BREXIT. Business Forecast
Slide 11: Summary of Consolidated Business Forecast for the Year Ending March 31, 2020
Summary of Consolidated Business Forecast for the Year Ending March 31, 2020 FY2018 FY2019 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Decrease Difference <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> YOY (Billions of yen) YOY Sales 509.6 481.8 991.4 464.0 481.0 9
Slide 12: Forecast by Business Segment
Forecast by Business Segment FY2018 FY2019 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Difference Decrease <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> YOY (Billions of yen) YOY Total Sales 509.6 481.8 991.4 464.0 481.0 945.0 -46.4 -4.7% Operating income 45.0 34.
Slide 13: Industrial Machinery Business: Business Environment and Forecast
Industrial Machinery Business Business Environment and Business Forecast 【 Demand trend by Sector 】 Sales Precision Machinery Actual Forecast Sector 19/3 2H 20/3 1H 20/3 2H （Billions of yen） and Parts vs. 19/3 vs. 19/3 vs. 20/3 1H 2H 1H 300 266.2 270.0 265.0 243.4 Machine Tools ↓↓ ↓ ↑↑ 226.9 57.4 59
Slide 14: Automotive Business: Vehicle Production and Business Forecast
Automotive Business Vehicle Production and Business Forecast Global Vehicle Production Volume Japan North America Europe China ASEAN6 Others （Billions of yen） Sales （unit : M） 800 95.1 95.1 705.5 696.3 723.6 689.7 100.0 94.4 93.0 650.0 Components 89.2 Automotive 13.9 15.0 14.7 15.2 600 80.0 13.5 4.1
Slide 15: Operating Income: Factors Behind Change (FY2018 to FY2019 Forecast)
Operating Income: Factors Behind Change (FY2018 ⇒ FY2019 Forecast) (Billions of yen, Figures are rounded to the nearest 100 million yen) 79.3 Volume/ Mix Reduction of external -7.5 procurement Increase Other operating costs etc. in costs expenses/ Equity -6.0 +3.5 method profits Decline in -4.8 -2.0
Slide 16: The 6th Mid-Term Management Plan
3． The 6th Mid-Term Management Plan Copyright NSK Ltd. All Rights Reserved. 15
Slide 17: Review of the 5th MTP
Review of the 5th MTP Concept of the 5th MTP Numerical Targets / Results NSK Vision 2026 Setting the Future in Motion FY18 FY18 Embark on new chapter in evolution towards next 100 years Original Plan Actual ¥991.4 Sustainable Growth Sales ¥1 trillion billion Deliver new value to society Work togethe
Slide 18: Vision for 2026: Establish corporate foundation for sustainable growth
Establish corporate foundation for sustainable growth (Ideal structure of NSK in 2026) Vision for 2026 ： Establish a corporate foundation for sustainable growth Provide values through evolution of MOTION ＆ CONTROLTM <Mission Statement> Value created NSK contributes to a safer, smoother society and h
Slide 19: Positioning of the 6th MTP toward 2026
Positioning of the 6th MTP toward 2026 (Billions of yen) 1,500.0 8.0% 8.0% 6.7% 949.2 1,020.3 991.4 1,000.0 Sustained Growth Automotive Industrial Machinery 945.0 Business CAGR +3% Double-digit profitability Business, Others FY16 FY17 FY18 FY19 FY20 FY21 VISION 2026 Establish corporate foundation 5t
Slide 20: 6th MTP Concept - Strategy House
6th MTP Concept -Strategy House- Build business base and strengthen resources in preparation for next growth phase Secure sales of ¥1 trillion and profitability New initiatives targeting growth competitiveness Constant pursuit of Creation of new value Challenging Operational Excellence Innovation En
Slide 21: 6th MTP Management Targets
6th MTP Management Targets 5th MTP 6th MTP (FY18) Results Management Targets Industrial Machinery：Achieve sales growth that surpasses market growth Sales/ ¥991.4 Sales growth Automotive Brgs：Achieve sales growth Growth that surpasses growth in global Growth ratio billion 2%/year vehicle production v
Slide 22: Strategy by Business Segment: Industrial Machinery Business
6th MTP <Strategy by Industrial Machinery Business business segment> Social needs and technological innovation Higher-performance robots ✓ Factory automation Automation, Electrification, next-generation battery ✓ technology, renewable energy Labor-saving Railway: Improved safety and comfort ✓ Smart
Slide 23: Industrial Machinery: Capture demand in growing sectors
6th MTP <Strategy by Industrial Machinery Business business segment> 5 initiatives targeting growth 1 Capture demand in growing sectors <Growth strategy> FY26 Sales: +50% (vs. FY18) CMS Capture demand in sectors where markets Growth drivers expand reflecting social needs. -Wind power -Railways -Co
Slide 24: Industrial Machinery: Actuators and leveraging NSK's strengths
6th MTP <Strategy by Industrial Machinery Business business segment> 3 Establish industrial actuators as new core product 4 Leverage NSK’s strengths to expand GAM business Market expands as a key component - High-reliability products supporting electrification NSK’s - Engineering support, service
Slide 25: Strategy by Business Segment: Automotive Business
6th MTP <Strategy by Automotive Business business segment> Unit: Vehicle needs / Million Global vehicle production vehicles （Source：IHS Automotive, NSK forecast) technological innovation 120 Electrification ratio (Right axis) 116 100% 107 100 100 94 95 93 96 97 Mobility 80% 80 54% 60% Enviro Conve S
Slide 26: Automotive: Expansion in Powertrain business
6th MTP <Strategy by Automotive Business business segment> 5 initiatives targeting growth 11 FY26 Sales: +50% Expansion in Powertrain business (vs. FY18) Vehicle production volume forecast by Respond to diversified powertrain in line power source with shift to electric-powered vehicles Unit: Million
Slide 27: Automotive: In-vehicle motors, Steering and Actuator business
6th MTP <Strategy by Automotive Business business segment> ２ Expand in-vehicle FY26 Sales: +80% Steering & Actuator business motor business (vs. FY18) Dramatic increase in in-vehicle Acceleration in autonomous driving FY26 motors due to electrification technology and electrification Sales: +30% 4 (v
Slide 28: 6th MTP Finance Strategy / Policy on Shareholder Returns
6th MTP Finance Strategy / Policy on Shareholder Returns - Payout ratio 30 - 50% - ROE 10％ or more ¥40/share or more (6th MTP) Pursuit of capital efficiency - Acquisition of treasury shares exceeding the cost of capital Agile capital policies Total return ratio (3 years) approximately 50% Growth wit
Slide 29: (Supplementary Information)
(Supplementary Information) Copyright NSK Ltd. All Rights Reserved. 28
Slide 30: Sales & Operating Income Results by Business Segment
（Supplementary Information） Sales & Operating Income Results by Business Segment Increase/ Increase/ FY2017 FY2018 Decrease FY2018 Decrease (Billions of yen) <Actual> <Actual> YOY <Feb FCST> vs Feb FCST Total Sales 1,020.3 991.4 -29.0 985.0 +6.4 Operating income 97.9 79.3 -18.6 83.0 -3.7 <%> 9.6% 8.
Slide 31: Business Forecast by Customer Location (FY2019)
（Supplementary Information） Business Forecast by Customer Location (FY2019) FY2018 FY2019 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 Sales 509.6 481.8 991.4 464.0 481.0 94
Slide 32: Quarterly Business Performance
（Supplementary Information） Quarterly Business Performance (Billions of yen) Sales 300 264.3 262.7 249.5 260.7 248.9 248.1 243.8 233.7 200 100 0 FY17 Q1 Q2 Q3 4Q FY18 Q1 Q2 Q3 Q4 (Billions of yen) Operating income Net income attributable to owners of the parent Operating income margin 40 9.6% 10.6%
Slide 33: Consolidated Balance Sheet
（Supplementary Information） Consolidated Balance Sheet Assets Liabilities / Total equity Current liabilities Non-Current assets Current assets （Billions of yen） Non- Current liabilities Total equity Change （Billions of yen） Change Ratio of net worth to total capital from FY17 from FY17 1,092.3 1,086
Slide 34: Inventories, Interest-Bearing Debt, Capital Expenditure, Depreciation
（Supplementary Information） Inventories / Interest-Bearing Debt, Capital Expenditure / Depreciation and Amortisation Inventories Capital Expenditure Japan Non-Japan Inventory turnover Japan Non-Japan 7.4 6.6 (Billions of yen) 81.1 (Times) 68.8 (Billions of yen) 159.5 143.1 38.1 29.6 96.2 88.3 39.2 4
Slide 35: Capital Expenditure, Depreciation and Amortisation, R&D Expenses
（Supplementary Information）Capital Expenditure, Depreciation and amortisation, R&D Expenses FY2018 5th MTP FY2019 6th MTP FY2016-FY2018 FY2019-FY2021 <Original <Forecast> (Billions of yen) <Forecast> <Actual> Forecast> <Actual> <Forecast> Capital Expenditure 85.0 81.1 180.0 208.5 60.0 180.0 Deprecia
Slide 36: Initiatives in the 6th MTP: New initiatives targeting growth
（Supplementary Information） Initiatives in the 6th MTP - New initiatives targeting growth - Build business base and strengthen resources in preparation for next growth phase New Initiatives Secure sales of ¥1 trillion and profitability targeting growth New initiatives targeting growth Challenging Op
Slide 37: Initiatives in the 6th MTP: Enhance managerial resources
（Supplementary Information） Initiatives in the 6th MTP - Enhance managerial resources - Build business base and strengthen resources in preparation for next growth phase Enhance managerial Secure sales of ¥1 trillion and profitability resources New initiatives targeting growth Challenging Operationa
Slide 38: Initiatives in the 6th MTP: Contribute to the environment and society
（Supplementary Information） Initiatives in the 6th MTP - Contribute to the environment and society- Contribute to the Build business base and strengthen resources in preparation for next growth phase Secure sales of ¥1 trillion and profitability environment and society New initiatives targeting grow
Slide 39: Copyright: NSK Ltd. All rights reserved
Copyright : NSK Ltd. All rights reserved for all pages.