Slide 1: Financial Conference: Consolidated Business Results and Forecast & Review of the Mid-term Plan
Financial Conference Consolidated Consolidated Business Business Results Results and and Forecast Forecast & & Review Review of of the the Mid-term Plan Mid-term Plan (FY ’06-FY’08) (FY’06-FY’08) May 16, 2007 NSK Ltd. Cautionary Statements with Respect to Forward-Looking Statements Statements made i
Slide 2: Contents
Contents .Consolidated Business Results & Forecasts a. Results for the Year Ended March 31, 2007 (FY’06) b. Forecasts for the Year Ending March 31, 2008 (FY’07) .Review of the Mid-term Plan (FY’06-’08) Supplementary Information 1
Slide 3: Consolidated Business Results for the Year Ended March 31, 2007
-a. Consolidated Business Results for the Year Ended March 31, 2007 2
Slide 4: Summary of Consolidated Business Results for the Year Ended March 31, 2007
Summary of Consolidated Business Results for the Year Ended March 31, 2007 Business Business Environment Environment Demand remained strong overall Demand related to capital expenditures continued to increase in Japan. Automotive related production increased 5.2% YOY, although production by some aut
Slide 5: Summary of Consolidated Business Results for the Year Ended March 31, 2007
Summary of Consolidated Business Results for the Year Ended March 31, 2007 ¥100 Million FY’05 FY’06 Increase Difference FY’06 /Decrease YOY <Forecasts Revised <Actual> <Actual> YOY on Nov., ‘06> Sales 6,285 7,172 +887 +14.1% 7,050 Operating income 426 624 +198 +46.6% 610 % <6.8%> 8.7% <8.7%> Ordinar
Slide 6: Business Results - By Business Segments
Business Results -By Business Segments- ¥100 Million FY’05 FY’06 Increase Difference FY’06 /Decrease YOY <Actual> <Actual> YOY <Forecasts Revised on Nov., ‘06> Sales 6,285 7,172 +887 +14.1% 7,050 Industrial bearings 1,956 2,163 +207 +10.6% 2,160 Automotive products 3,531 3,979 +448 +12.7% 3,865 Prec
Slide 7: Business Results by Business Segments - Industrial Machinery Bearings
Business Results by Business Segments - Industrial Machinery Bearings - Sales Sales Operating income/margin Operating income/margin ¥100 Million ¥100 Million Profitability improved Sales Salesincreased increased10.6% 10.6%YOY YOYbacked backedby bystrong strongdemand demandrelated relatedto tocapital
Slide 8: Business Results by Business Segments - Automotive Products
Business Results by Business Segments - Automotive Products - Sales Sales Operating income/margin Operating income/margin ¥100 Million ¥100 Million Profitability Improved steadily Demand Demandremained remainedrobust robustoverall. overall. Sales Salesincreased increased12.7% 12.7%YOY YOYwith within
Slide 9: Business Results by Business Segments - Precision Machinery and Parts
Business Results by Business Segments - Precision Machinery and Parts - (¥100 Million Sales Sales Operating income/margin Operating income/margin ¥100 Million Profitability improved largely Demand Demandfrom fromsemiconductors/liquid semiconductors/liquidcrystal crystalproduction productionequipment
Slide 10: Operating Income: Improvement Factors (FY'05 to FY'06)
Operating Income: Improvement Factors (FY’05 FY’06) ¥100 Million FY’06 (Unless otherwise specified) Effect of Effect of exchange consolidation rate of Amatsuji 624 fluctuations External +15 procurement cost ¥19.8 Billion reduction, etc. +42 Increased (Y-O-Y) Effect of +74 volume growth Decrease in s
Slide 11: Business Results by Geographical Segments
Business Results by Geographical Segments ¥100 Million FY’05 FY’06 Increase Difference FY’06 /Decrease YOY <Actual> <Actual> YOY <Forecasts Revised on Nov., ‘06> Sales 6,285 7,172 +887 + 14.1% 7,050 Japan 4,762 5,223 +461 +9.7% 5,243 Americas 904 1,029 +125 +13.9% 1,029 Europe 1,049 1,276 +227 +21.6
Slide 12: Business Results by Customer Location
Business Results by Customer Location FY’05 FY’06 Increase FY’06 ¥100 Million Difference /Decrease YOY <Forecasts Revised on <Actual> <Actual> YOY Nov., ‘06> Sales 6,285 7,172 +887 +14.1% 7,050 Japan 3,301 3,644 +343 +10.4% 3,608 Non-Japan 2,984 3,528 +544 +18.2% 3,442 Non- Non-Japan ratio (47.5%) (
Slide 13: Consolidated Balance Sheets
Consolidated Balance Sheets FY’05 FY’06 Increase ¥100 Million /Decrease <Actual> <Actual> YOY Assets Current assets 3,136 3,891 +755 Non-current assets 4,294 4,267 -27 Total assets 7,430 8,158 +728 Liabilities and shareholders’ equity Current liabilities 2,668 2,975 +307 Long-term liabilities 2,284
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
-b. Consolidated Business Forecasts for the Year Ending March 31, 2008 14
Slide 16: Forecasts for the Year Ending March 31, 2008
Forecasts for the Year Ending March 31, 2008 Full Full year year forecasts forecasts Sales:¥745.0 billion, Operating income:¥68.0 billion, Ordinary income:63.5 billion, Net income:¥39.0 billion Exchange rate forecast US$=¥115, Euro=¥150 Forecasted Forecasted business business environment environment
Slide 17: Forecasts for the Year Ending March 31, 2008
Forecasts for the Year Ending March 31, 2008 ¥100 Million FY’06 FY’07 Increase 1st half 2nd half Full year 1st half 2nd half Full year /Decrease Actual Actual Actual Forecast Forecast Forecast Y-O-Y Sales 3,493 3,679 7,172 3,600 3,850 7,450 +278 Operating income 300 324 624 310 370 680 +56 Margin <8
Slide 18: Forecasts - By Business Segments
Forecasts -By Business Segments ¥100 Million FY’06 FY’07 1st half 2nd half Full year 1st half 2nd half Full year Increase /Decrease Actual Actual Actual Forecast Forecast Forecast YOY Sales 3,493 3,679 7,172 3,600 3,850 7,450 +278 Industrial bearings 1,056 1,107 2,163 1,124 1,204 2,328 +165 Automoti
Slide 19: Forecasts for Operating Income: Improvement Factors (FY'06 to FY'07)
Forecasts for Operating Income: Improvement Factors (FY’06 FY’07) ¥100 Million (Unless otherwise specified) FY’07 680 External ¥5.6 Billion procurement cost reduction, etc. Increase (Y-O-Y) Decrease in sales +63 624 prices, etc. Effect of volume growth Effect of FY’06 -40 exchange rate fluctuations
Slide 20: Forecasts - By Geographical Segments
Forecasts -By Geographical Segments ¥100 Million FY’06 FY’07 1st half 2nd half Full year 1st half 2nd half Full year Increase /Decrease Actual Actual Actual Forecast Forecast Forecast YOY Sales 3,493 3,679 7,172 3,600 3,850 7,450 +278 Japan 2,538 2,685 5,223 2,614 2,807 5,421 +198 Americas 502 527 1
Slide 21: Forecasts - By Customer Location
Forecasts -By Customer Location ¥100 Million FY’06 FY’07 1st half 2nd half Full year 1st half 2nd half Full year Increase /Decrease Actual Actual Actual Forecast Forecast Forecast YOY Sales 3,493 3,679 7,172 3,600 3,850 7,450 +278 Japan 1,764 1,880 3,644 1,857 1,960 3,817 +173 Non-Japan 1,729 1,799
Slide 22: Review of the Mid-term Plan (FY'06-FY'08)
.Review of the Mid-term Plan (FY’06-FY’08) 21
Slide 23: Summary of the Mid-term Plan
Summary of the Mid-term Plan Outline Mid-term Vision Numerical Target for FY’08 To Become No.1 in Total Quality Sales ¥740 billion Strengthen: Operating income ¥74 billion Manufacturing Capability Operating income Growth Product Development Capability Improve margin (%) 10.0% Strategy Profitability
Slide 24: Progress of the Mid-term Plan
Progress of the Mid-term Plan Left Sales Mid-term Plan (FY’06-FY’08) Right Operating income Operating income margin 1st year Target announced in Feb., ’06 ¥100 Million 9.1% 10.0% 8.7% 10,000 1,600 6.8% 7.6% 8,000 7,172 7,450 7,400 6,800 1,200 6,285 6,000 740 Sales 624 680 800 4,000 520 426 400 2,000
Slide 25: Industrial Machinery Bearings: Summary of the 1st Year of the Mid-term Plan
Industrial Machinery Bearings Basic policy :Expand sales by strengthening sales & production capability Sales Sales Operating income/margin Operating income/margin (%) (%) Target announced Target announced ¥100 Million ¥100 Million in Feb., ’06 in Feb., ’06 14.3% 14.6% 13.7% 11.3% 11.6% FY’ FY’05 FY
Slide 26: Industrial Machinery Bearings: Key Strategies for the 2nd Year
Industrial Machinery Bearings Key strategies for the 2nd year of the Mid-term Plan Establish foundation of growth strategies and maximize profitability Expand sales of roller bearings Expand sales to aftermarket sector Improve key business sector-oriented Expand distribution sales network and activi
Slide 27: Automotive Products: Summary of the 1st Year of the Mid-term Plan
Automotive Products Basic policy :Improve profitability and implement order winning activities Sales Sales Operating income/margin Operating income/margin (%) (%) Target announced ¥100 Million in Feb., ’06 ¥100 Million Target announced in Feb., ’06 5.9% 5.7% 6.1% 7.8% 4.9% FY’ FY’05 FY’ FY’06 FY’ FY
Slide 28: Automotive Products: Key Strategies for the 2nd Year
Automotive Products Key strategies for the 2nd year of the Mid-term Plan Establish foundation of profit growth and implement aggressive order winning activities Improve profitability Improve profitability in Japan Strengthen profitability in non-Japan Complete business restructuring in North America
Slide 29: Precision Machinery and Parts
Precision Machinery and Parts Basic policy :Enhance profitability and focus on linear motion products Sales Sales Operating income/margin Operating income/margin (%) (%) ¥100 Million Target announced in Feb., ’06 ¥100 Million Target announced 14.8% 15.2% in Feb., ’06 14.0% 11.7% 8.5% FY’ FY’05 FY’06
Slide 30: Conclusion: Aim for ¥1 trillion company
Conclusion Business performance strengthened during the 1st year of the Mid-term plan Key tasks for the 2nd year of the Mid-term Plan Further promote ‘Growth Strategy” and “Profitability Improvement” activities aiming for achievement of the final year targets of the Mid-term plan Implement operation
Slide 31: Supplementary Information: Capex, Depreciation, R&D
(Supplementary Information) –For the Year Ending Mar. 31, 2008 FY’06 FY’07 (¥100 Million (Actual) (Forecast) Capital expenditures 362 465 Japan 234 321 Non-Japan 128 144 Americas 36 27 Europe 32 41 Asia 60 76 Except intangible assets FY’06 FY’07 (¥100 Million (Actual) (Forecast) Depreciation 345 378
Slide 32: Supplementary Information: Sales & Profits by Business Segments of the Mid-term Plan
(Supplementary Information) –Sales & Profits by Business Segments of the Mid-term Plan ¥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 2,328 2,300 Operating income margin 221 <11.3%> 296 <13.7%> 334 <14.3%> 335 <
Slide 33: Supplementary Information: Numerical Mid-term Targets for Profitability Improvement
(Supplementary Information) –Numerical Mid-term Targets for Profitability Improvement ¥100 Million FY’05 FY’06 FY’07 FY’08 Actual Actual Forecast Plan Operating income margin 6.8% 8.7% 9.1% 10% ROE 11.9% 14.0% 15% Plan Total of 3 years:1,000 Capital expenditures 473 362 465 Plan Total of 3 years:990