Nsk Ltd. · TSE:6471
Nsk — H1 FY2008 Earnings Presentation
33 slides from Nsk's earnings presentation, Nov 6, 2008
Slide 1: Consolidated Business Results and Forecast
FINANCIAL CONFERENCE Consolidated Consolidated Business Business Results Results and and Forecast Forecast November 06, 2008 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
Slide 2: Contents
Contents 1. Consolidated Business Results for the Six Months Ended September 30, 2008 2. Consolidated Business Forecast for the Year Ending March 31, 2009 3. Progress of Key Strategies 1
Slide 3: 1. Consolidated Business Results for the Six Months Ended September 30, 2008
1. Consolidated Business Results for the Six Months Ended September 30, 2008 2
Slide 4: Summary of Consolidated Business Results: Business Environment
Summary of Consolidated Business Results for the Six Months Ended September 30, 2008 Business Environment Industrial Machinery Demand related to infrastructure, such as the steelmaking equipment and construction machinery sectors, continued to be favourable. Demand from the wind power generator sect
Slide 5: Summary of Consolidated Business Results for the Six Months Ended September 30, 2008
Summary of Consolidated Business Results for the Six Months Ended September 30, 2008 ¥100 Million 08/3 1st half 09/3 1st half Increase/ 09/3 1st half % Actual Actual decrease Original forecast Sales 3,693 3,833 +140 +3.8% 3,800 Operating income 316 286 -30 -9.4% 315 % 8.5% 7.5% <8.3%> Ordinary incom
Slide 6: Results by Business Segment
Results by Business Segment ¥100 Million 08/3 1st half 09/3 1st half Increase/ 09/3 1st half decrease % Actual Actual Original forecast Sales 3,693 3,833 +140 +3.8% 3,800 Industrial bearings 1,148 1,217 +69 +6.0% 1,220 Automotive products 2,091 2,141 +50 +2.4% 2,130 Precision machinery & 318 311 -7
Slide 7: Business Segment Information: Industrial Machinery Bearings
Business Segment Information Industrial Machinery Bearings ¥100 Million Sales 1,217 Infrastructure and energy-related demand 1,148 remained healthy. +6.0% Sales for wind power generators expanded due to key business sector-oriented activities in Europe. Total sales also increased by aggressively cap
Slide 8: Business Segment Information: Automotive Products
Business Segment Information Automotive Products ¥100 Million Sales Sales in Japan were negatively affected by production decrease by automotive manufacturers in the second quarter. 2,091 2,141 However, sales expansion of EPS contributed +2.4% to overall results, in addition to an increase in sales
Slide 9: Business Segment Information: Precision Machinery and Parts
Business Segment Information Precision Machinery and Parts ¥100 Million Sales Demand from large-sized machine tool manufacturers continued to be strong. However, overall demand entered a downturn trend. 318 -2.5% 311 Demand from liquid crystal makers has recovered, while demand from semiconductor pr
Slide 10: Operating Income: Decrease Factors
Operating Income: Decrease Factors (08/3 1st half 09/3 1st half) ¥100 Million 1st half 08/3 YOY decrease of -30 316 Decrease in sales price -24 Effect of exchange rate fluctuations Effect of volume growth 1st half 09/3 External -105 286 procurement -24 cost reduction etc. Increases in other costs -5
Slide 11: Business Results by Geographical Segment
Business Results by Geographical Segment ¥100 Million 08/3 1st half 09/3 1st half Increase/ 09/3 1st half % Actual Actual decrease Original forecast Sales 3,693 3,833 +140 +3.8% 3,800 Japan 2,629 2,815 +186 +7.1% 2,735 The Americas 545 490 -55 -10.0% 477 Europe 662 717 +55 +8.4% 720 Asia 554 610 +56
Slide 12: Business Results by Geographical Segment
Business Results by Geographical Segment Japan The Americas Operating income decreased 23.3% YOY due to an increase in steel price, the Results were negatively affected by volume reduction due to a slowdown in appreciation of the Japanese yen, a decline in sales price in the automotive demand for au
Slide 13: Business Results by Customer Location
Business Results by Customer Location Asia Asia ¥100 Million 17.7% 18.7% Japan Japan Europe Europe 50.3% 50.3% 17.0% 18.1% Americas Americas 15.0% 12.9% 3,693 3,833 Japan The Americas Europe Asia 718 Increase in sales for general machinery and 653 +9.9% sales in automotive sectors in China contribut
Slide 14: Consolidated Balance Sheets
Consolidated Balance Sheets Assets Liabilities and Net Assets Net assets Non- Non-current liabilities Non- Non-current assets Current assets Current liabilities Ratio of net worth to total capital ¥100 Million Change YOY ¥100 Million Change YOY 8,175 8,286 8,285 -1 -1 8,175 8,286 8,285 -93 2,924 2,9
Slide 15: Inventory, Interest-Bearing Debt, Capital Expenditure, Depreciation
Inventory/ Interest-Bearing Debt, Capital Expenditure/ Depreciation ¥100 Million Inventory ¥100 Million Capital Expenditure Japan Non- Non-Japan Inventory turnover Japan Non- Non-Japan 7.5 7.0 6.9 327 1,192 132 247 1,070 1,018 193 629 108 576 546 80 195 563 113 139 494 472 08/3 08/3 09/3 08/3 08/3 0
Slide 16: 2. Consolidated Business Forecast for the Year Ending March 31, 2009
2. Consolidated Business Forecast for the Year Ending March 31, 2009 15
Slide 17: Forecast for the Year Ending March 31, 2009: Revised Business Forecast
Forecast for the Year Ending March 31, 2009 Revised Business Forecast Sales ¥750.0 billion, Operating income ¥53.0 billion, Ordinary income ¥51.0 billion, Net income ¥34.0 billion Downward revisions were made to both sales and profit forecast announced in May 2008. Against the original forecast, dem
Slide 18: Forecast for the Year Ending March 31, 2009
Forecast for the Year Ending March 31, 2009 ¥100 Million 08/3 09/3 Full year 1st half 2nd half Full year Increase/ Full year % Actual Actual Revised forecast Revised forecast decrease Original forecast Sales 7,720 3,833 3,667 7,500 -220 -2.8% 8,000 Operating 693 286 244 530 -163 -23.5% 710 income %
Slide 19: Forecast By Business Segment
Forecast By Business Segment (¥100 Million) 08/3 09/3 Full year 1st half 2nd half Full year Increase/ % Full year decrease Actual Actual Revised forecast Revised forecast <Original forecast Sales 7,720 3,833 3,667 7,500 -220 -2.8% 8,000 Industrial bearings 2,391 1,217 1,193 2,410 +19 +0.8% 2,550 Aut
Slide 20: Forecast for Operating Income: Decrease Factors
Forecast for Operating Income: Decrease Factors (08/3 09/3 Revised Forecast) (¥100 Million) 08/3 YOY decrease of -163 693 Decrease in sales price -45 Effect of exchange rate fluctuations -213 -80 Increases in other costs External procurement 09/3 Effect of cost reduction etc. Revised forecast + volu
Slide 21: Forecast By Geographical Segment
Forecast By Geographical Segment ¥100 Million 08/3 09/3 Full year 1st half 2nd half Full year Increase/ % Full year Revised forecast decrease Actual Actual Revised forecast Original forecast Sales 7,720 3,833 3,667 7,500 -220 -2.8% 8,000 Japan 5,580 2,815 2,705 5,520 -60 -1.1% 5,805 The Americas 1,0
Slide 22: Forecast By Customer Location
Forecast By Customer Location ¥100 Million 08/3 09/3 Full year 1st half 2nd half Full year Increase/ Full year % Actual Actual Revised forecast Revised forecast decrease Original forecast 7,720 Sales 3,833 3,667 7,500 -220 -2.8% 8,000 Japan 3,889 1,929 1,824 3,753 -136 -3.5% 3,962 Non-Japan 3,831 1,
Slide 23: 3. Progress of Key Strategies
3. Progress of Key Strategies 22
Slide 24: Key Strategies for the Year Ending March 31, 2009
Key Strategies for the Year Ending March 31, 2009 Mid- Mid-term Plan Mid- Mid-term Plan (FY’ (FY’03- 03-FY’ FY’05) (FY’ (FY’06- 06-FY’ FY’08) Changes in Business Environment Growth Strategies Slowdown in world economy Profitability Improvement Increase in steel price Appreciation of the Japanese Yen
Slide 25: Profitability Enhancement: Respond to Changes in Business Environment
Progress of Key Strategies Profitability Enhancement Respond to Changes in Business Environment Build business structure urgently in order to deal with steep decrease in demand Revise capital expenditure for (¥ Billion) reinforcement and establishment of equipment 52.0 45.0 Less than Make use of exi
Slide 26: Profitability Enhancement: Measures against an increase in steel price
Progress of Key Strategies Profitability Enhancement Measures against an increase in steel price Implement cost Promote steel VA/VE activities reduction policies Reduce steel cost in order to respond quickly to changes in demand environment Take actions to increase Continue to increase sales price i
Slide 27: Growth Strategies (Industrial machinery bearings)
Progress of Key Strategies Growth Strategies (Industrial machinery bearings) Sales trend of Industrial machinery bearings Robust demand 2,391 2,410 Infrastructure- Infrastructure-related 2,163 demand in emerging countries (¥100 Million) 1,651 1,683 Energy-related demand Non- Non-Japan 1,445 Resource
Slide 28: Growth Strategies (Industrial machinery bearings)
Progress of Key Strategies Growth Strategies (Industrial machinery bearings) 2 Expand sales in aftermarket 3 Reinforce production capability Channel Channel development development Maximize Maximize Fujisawa Fujisawa Plant Plant output output Accelerate cultivation of new distribution Sales of Fujis
Slide 29: Growth Strategies (Automotive Products)
Progress of Key Strategies Growth Strategies (Automotive Products) Strengthen Order-winning Activities Leading to Next Mid-term Plan Differentiate NSK Make most of through its technologies NSK Global production sites Production sites that were newly established or expanded in fiscal 07 and 08 Bearin
Slide 30: Growth Strategies (Precision Machinery and Parts)
Progress of Key Strategies Growth Strategies (Precision Machinery and Parts) Expand business foundation leading to next Mid-term Plan energygeneration ¾Solarenergy ¾Solar generation(Solar (Solarpanels) panels) Expand and Expand and develop develop batteries,Fuel ¾Lithiumbatteries, ¾Lithium Fuelcells
Slide 31: (Supplementary Information) For the Year Ending March 31, 2009
(Supplementary Information) For the Year Ending March 31, 2009 09/3 09/3 08/3 09/3 ¥100 Million Revised forecast Original forecast Actual (Full year) Actual (1st half) (Full year) announced in May, 2008 Capital expenditure 520 247 400 450 Japan 308 139 250 293 Non-Japan 212 108 150 157 The Americas
Slide 32: (Supplementary Information) Mid-term Target by Business Segment
(Supplementary Information) Mid-term Target by Business Segment Mid- Mid-term Plan FY’ FY’06- 06-FY’ FY’08 Target announced in Feb. 2006 ¥100 Million 06/3 Actual 07/3 Actual 08/3 Actual 09/3 Revised forecast 09/3 Mid- Mid-term target Industrial bearings Sales 1,956 2,163 2,391 2,410 2,300 Operating
Slide 33: (Supplementary Information) Mid-term Target for Profitability Enhancement
(Supplementary Information) Mid-term Target for Profitability Enhancement Target announced Mid- Mid-term Plan FY’ FY’06- 06-FY’ FY’08 in Feb. 2006 06/3 07/3 08/3 09/3 09/3 ¥100 Million Actual Actual Actual Revised forecast Plan Operating income 6.8% 8.7% 9.0% 7.1% 10% margin ROE 12.1% 14.0% 16.1% 12