Slide 1: Financial Conference: Consolidated Business Results and Forecast
FINANCIAL CONFERENCE Consolidated Business Results and Forecast. May 15, 2017 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 statements.
Slide 2: Contents
Contents １．Consolidated Business Results for the Year Ended March 31, 2017 2． Consolidated Business Forecast for the Year Ending March 31, 2018 3．Progress of the 5th Mid-Term Management Plan (Supplementary Information) 1
Slide 3: Consolidated Business Results for the Year Ended March 31, 2017
1．Consolidated Business Results for the Year Ended March 31, 2017 2
Slide 4: Summary of Consolidated Business Results for the Year Ended March 31, 2017
Summary of Consolidated Business Results for the Year Ended March 31, 2017 Business Environment ✓ Industrial machinery business: Although demand bottomed out in Q2, conditions varied by sector. ✓ Automotive business: Overall market environment remained steady due to solid sales in North America and
Slide 5: Summary of Consolidated Business Results for the Year Ended March 31, 2017
Summary of Consolidated Business Results for the Year Ended March 31, 2017 Increase/ IFRS FY2015 FY2016 Difference FY2016 Decrease (Billions of yen) <Actual> <Actual> YOY <Original Forecast> YOY Net sales 975.3 949.2 -26.1 -2.7% 920.0 Operating income 89.5 65.3 -24.2 -27.0% 65.0 <%> <9.2%> <6.9%> <7
Slide 6: Sales and O.I. by Business Segment
Sales and O.I. by Business Segment Increase/ IFRS FY2015 FY2016 Difference FY2016 Decrease (Billions of yen) <Actual> <Actual> YOY <Original Forecast> YOY Net sales 975.3 949.2 -26.1 -2.7% 920.0 Industrial Machinery Business 243.4 226.9 -16.5 -6.8% 242.0 Industrial machinery Bearings 201.7 184.3 -17
Slide 7: Business Results: Industrial Machinery Business
Business Results: Industrial Machinery Business Ind BRG Precision O.I O.I (%) IFRS FY2015 FY2016 Increase/ Difference Decrease （Billions of yen） <Actual> <Actual> YOY 11.8% YOY 9.8% 8.1% 6.3% 6.8% 7.7% 4.6% Net sales 243.4 226.9 -16.5 -6.8% (Billions of yen) 2.9% 66.1 Industrial 62.0 61.5 11.4 57.7
Slide 8: Business Results: Automotive Business
Business Results: Automotive Business Auto BRG Auto Comp O.I O.I (%) IFRS FY2015 FY2016 Increase/ Difference 11.7% Decrease （Billions of yen） <Actual> <Actual> YOY 9.9% 9.4% 9.0% 9.3% 9.5%10.8% YOY 7.4% 177.8 182.1 176.0 182.8 Net sales 705.5 696.3 -9.2 -1.3% 169.7 171.2 178.1 164.3 Automotive Beari
Slide 9: Operating Income: Factors Behind Change (FY2015 to FY2016)
Operating Income: Factors Behind Change (IFRS FY2015 ⇒ FY2016) (Billions of yen) Reduction of external procurement costs etc. Decline in Volume sales price increase/ +9.6 Product mix -17.4 Other operating -8.8 Increase in costs expenses/ Equity +13.3 method profits -7.5 Effect of exchange rate fluct
Slide 10: Sales Results by Customer Location
Sales Results by Customer Location IFRS FY2015 FY2016 (Billions of yen) Increase/ Full year Full year Difference Decrease <Actual> <Actual> YOY YOY Net sales 975.3 949.2 -26.1 -2.7% Japan 318.4 330.5 +12.1 +3.8% Non-Japan 656.9 618.7 -38.2 -5.8% <Non-Japan ratio> <67.4%> <65.2%> The Americas 183.7 1
Slide 11: Consolidated Business Forecast for the Year Ending March 31, 2018
2． Consolidated Business Forecast for the Year Ending March 31, 2018 10
Slide 12: Summary of Consolidated Business Forecast for the Year Ending March 31, 2018
Summary of Consolidated Business Forecast for the Year Ending March 31, 2018 Forecasted Business Environment ✓ Industrial machinery: recovery trend to continue, but direction unclear from Q3 onwards. ✓ Automotive: Production volume to continue moderate growth, but volume in North America forecast to
Slide 13: Summary of Consolidated Business Forecast for the Year Ending March 31, 2018
Summary of Consolidated Business Forecast for the Year Ending March 31, 2018 IFRS FY2016 FY2017 (Billions of yen) Increase/ 1st half 2nd half Full year 1st half 2nd half Full year Decrease Difference <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> YOY YOY Net sales 455.6 493.6 949.2 474.
Slide 14: Forecast by Business Segment
Forecast by Business Segment ＩＦＲＳ FY2016 FY2017 Increase/ (Billions of yen) 1st half 2nd half Full year 1st half 2nd half Full year Difference Decrease <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> YOY YOY Net sales 455.6 493.6 949.2 474.0 486.0 960.0 +10.8 +1.1% Industrial machinery B
Slide 15: Operating Income: Factors Behind Change (FY2016 to FY2017 Forecast)
Operating Income: Factors Behind Change (FY2016 ⇒ FY2017 Forecast) (Billions of yen) Other operating expenses/ Equity method profits +16.9 Decline in Reduction of external procurement costs etc. 82.0 sales price Volume -3.0 increase/ +6.0 Effect of Product mix exchange rate -7.0 Increase fluctuation
Slide 16: Sales Results by Customer Location
Sales Results by Customer Location ＩＦＲＳ FY2016 FY2017 Increase/ (Billions of yen) 1st half 2nd half Full year 1st half 2nd half Full year Difference Decrease <Actual> <Actual> <Actual> <Forecast> <Forecast> <Forecast> YOY YOY Net sales 455.6 493.6 949.2 474.0 486.0 960.0 +10.8 +1.1% Japan 157.2 173.
Slide 17: The 5th MTP Second-year Management Policy: Key Initiatives of FY2017
The 5th MTP Second-year Management Policy Key Initiatives of FY2017 ●5th MTP: Assess progress and deliver results ✓ Absorb and recover cost hike factors. (raw materials, labor) ✓ Invest and control resources in growth and priority areas. ✓ Safety, Quality, Compliance ●Industrial Machinery Business ✓
Slide 18: Progress of the 5th Mid-Term Management Plan
3．Progress of the 5th Mid-Term Management Plan 17
Slide 19: The 5th MTP Concept
The 5th MTP Concept 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 Excellence Increase and stabilize profitability Mono
Slide 20: Industrial Machinery Business: Business Environment and Forecast
Industrial Machinery Business: 1 Business Environment and Forecast Demand trend by Sector Sales Precision Machinery （Billions of yen） FY16 2H FY16 １H FY17 1H Sector to and Parts to 2H to 2H 300 276.4 FY17 1H 243.0 243.4 44.0 226.9 233.5 → → → Home Appliances 37.3 41.7 46.0 200 42.7 → → → Steel Plant
Slide 21: Industrial Machinery Business: Operational Excellence
Industrial Machinery Business: 2 Operational Excellence The 5th MTP: Status of Key Initiatives Respond to changes in Expand target fields business environment Respond to fiercer competition Railcars Aftermarket ・Differentiate from Chinese FY17 SOP/Entry projects Improve customer service manufa
Slide 22: Industrial Machinery Business: Innovate and Challenge
Industrial Machinery Business: 3 Innovate and Challenge The 5th MTP: Status of Key Initiatives Create new added value and demand Initiatives for new fields Next-generation personal mobility: CMS Capital participation in WHILL, Inc. Reduce industrial machinery downtime Growing demand for stable opera
Slide 23: Automotive Business: Vehicle Production and Business Forecast
Automotive Business： 1 Vehicle Production and Business Forecast Global Vehicle Production Volume （Billions of yen） Sales Japan North America Europe China ASEAN6 Others 800 （unit : M） 705.5 696.3 698.0 100.0 94.1 95.0 657.0 Components Automotive 85.8 87.8 89.1 590.5 13.8 14.6 600 80.0 14.3 13.4 14.5
Slide 24: Automotive Business: Operational Excellence
Automotive Business: 2 Operational Excellence Innovate and Challenge The 5th MTP: Status of Key Initiatives Powertrain Business Steering and Actuator Business ・Major driver of near-term growth in Build solid foundation for next stage of growth automotive business ・Respond to evolution in powertrain
Slide 25: Automotive Business: Innovate and Challenge
Automotive Business: 3 Innovate and Challenge The 5th MTP: Status of Key Initiatives Initiatives toward new automotive products (response to electrification) Ball screws for electric brake boosters EV drive units Transmission-equipped wheel hub motor Key points Key points Key points ・High efficiency
Slide 26: Supplementary Information
(Supplementary Information) 25
Slide 27: Consolidated Business Trend
(Supplementary Information) Consolidated Business Trend The 5th Mid-term Plan Operating Income % 16.1% 15.3% 14.9% ROE 14.0% 11.9% 12.1% 10.3% 10.6% 9.2% 9.9% 8.0% 3.4% 5.2% 3.4% 2.0% 10.0% 9.7% 10.0% (Billions of yen) 8.7% 9.0% 8.5%(Billions of yen) 6.6% 6.8% 6.1% 6.1% 7.8% 6.9% 5.0% 960.0 1,000.0
Slide 28: Quarterly Business Performance
(Supplementary Information) Quarterly Business Performance (Billions of yen) Net sales 300 251.2 238.5 245.7 239.9 242.1 251.5 231.8 223.8 200 100 0 FY2015 Q1 Q2 Q3 Q4 FY2016 Q1 Q2 Q3 Q4 Operating income Net income attributable to owners of the Parent Operating income margin (Billions of yen) 40 10.
Slide 29: Consolidated Financial Statements (FY2016)
(Supplementary Information) Consolidated Financial Statements (FY2016) Assets Liabilities / Equity (Billions of yen) (Billions of yen) Non-current assets Current assets Equity Non-current liabilities Current liabilities Ratio of net worth to total capital 1,032.4 1,044.0 Change from FY2015 1,032.4 1
Slide 30: Inventories, Interest-Bearing Debt, Capital Expenditure, Depreciation and Amortization
(Supplementary Information) Inventories / Interest-Bearing Debt, Capital Expenditure / Depreciation and Amortization (FY2016) Inventories Capital Expenditure Japan Non-Japan Inventory turnover Japan Non-Japan 7.2 7.2 (Billions of yen) (Billions of yen) 58.6 55.0 130.6 131.8 27.1 26.9 83.0 81.6 28.1
Slide 31: 5th MTP Capital Expenditure, Depreciation and Amortization, R&D Expenses
(Supplementary Information) 5th MTP Capital Expenditure, Depreciation and Amortization, R&D Expenses IFRS FY2015 FY2016 FY2017 5th MTP FY2016-FY2018 （Billions of yen） <Actual> <Actual> <Plan> <Plan> Capital expenditure 55.0 58.6 68.0 180.0 Depreciation and amortization 43.0 43.4 45.0 130.0 R&D expen