Slide 1: Consolidated Business Results and Forecast
FINANCIAL CONFERENCE FINANCIAL Consolidated Consolidated Business Business Results Results and and Forecast Forecast May 15, 2009 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
Slide 2: Contents
Contents 1. Consolidated Business Results for the Year Ended March 31, 2009 2. Consolidated Business Forecasts for the Year Ending March 31, 2010 3. Key Strategies for the Year Ending March 31, 2010 1
Slide 3: 1. Consolidated Business Results for the Year Ended March 31, 2009
1. Consolidated Business Results for the Year Ended March 31, 2009 2
Slide 4: Summary of Consolidated Business Results for the Year Ended March 31, 2009
Summary of Consolidated Business Results for the Year Ended March 31, 2009 Business Environment 『Although sales remained robust in the first half of the year, dramatic changes in the business environment after Q3 caused a rapid downturn in demand 』 Although sales were robust in infrastructure-relate
Slide 5: Summary of Consolidated Business Results: Quarterly Sales and Operating Income
Summary of Consolidated Business Results for the Year Ended March 31, 2009 08/3 09/3 (Operating Income： ¥100 Million) (Sales：¥100 Million ) Industrial machinery bearings Automotive products Precision machinery & parts Other Operating income 4,000 300 168 183 194 Dramatic Change in 3,500 148 153 133
Slide 6: Respond to Rapid Changes in Business Environment
Respond to Rapid Changes in Business Environment Emergency Profitability Countermeasures 09/3 Positive Effects Effect Adjust plant ■ ■ Adjust production Effect of reduced labor ・Reduce plant operation and other costs etc., operation and and shift labor reduce labor ■ ■ Take urgent action to reduce c
Slide 7: Summary of Consolidated Business Results for the Year Ended March 31, 2009
Summary of Consolidated Business Results for the Year Ended March 31, 2009 （100 Million） 08/3 09/3 Increase/ Difference decrease ＜Actual＞ ＜Actual＞ YOY YOY Sales 7,720 6,476 -1,244 -16.1% Operating income 693 221 -472 -68.1% ＜%＞ ＜9.0%＞ ＜3.4%＞ Ordinary income 649 170 -479 -73.8% Extraordinary gains 8
Slide 8: Business Results by Business Segment
Business Results by Business Segment （¥100 Million） 08/3 09/3 Increase/ Difference decrease ＜Actual＞ ＜Actual＞ YOY YOY Sales 7,720 6,476 -1,244 -16.1% Industrial bearings 2,391 2,095 -296 -12.4% Automotive products 4,357 3,525 -832 -19.1% Precision machinery & 682 575 -107 -15.7% parts Other 562 507
Slide 9: Business Results by Business Segment - Industrial Machinery Bearings
Business Results by Business Segment - Industrial Machinery Bearings Sales （¥100 Million） Million） 3000 Demand was solid in environment and 2,391 infrastructure-related fields such as wind 2,095 turbine and railway sectors. △12.4% Demand in the general industry sector was 2000 strong during the firs
Slide 10: Business Results by Business Segment - Automotive Products
Business Results by Business Segment - Automotive Products Sales （¥100 Million） Million） 5000 4,357 Sales in Japan were solid in the first half driven by strong export etc, while sales in Q4 4000 △19.1% 3,525 declined dramatically due to a decline in production by automakers. 3000 Sales in both the
Slide 11: Business Results by Business Segment - Precision Machinery and Parts
Business Results by Business Segment - Precision Machinery and Parts Sales （¥100 Million） 800 Demand from machine tool and injection 682 700 molding machine manufacturers declined due 575 to reduced capital expenditure. 600 △15.7% Demand from semiconductor production 500 makers and liquid crystal pr
Slide 12: Operating Income: Improvement Factors
Operating Income: Improvement Factors (08/3 ⇒ 09/3) (¥100 Million） 08/3 YOY decrease of ¥693 Effect of -¥472 volume reduction -365 -¥559 Effect of exchange rate fluctuations External -57 procurement cost 09/3 Decline in reduction etc. Increase in sales prices other costs Profitability +27 -35 counte
Slide 13: Business Results by Geographical Segment
Business Results by Geographical Segment （¥100 Million） 08/3 09/3 Increase/ Difference decrease ＜Actual＞ Actual＞ ＜Actual＞ Actual＞ YOY YOY Sales 7,720 6,476 -1,244 -16.1% Japan 5,580 4,794 -786 -14.1% The Americas 1,060 782 -278 -26.2% Europe 1,400 1,146 -254 -18.1% Asia 1,180 1,085 -95 -8.1% Elimina
Slide 14: Business Results by Geographical Segment
Business Results by Geographical Segment Japan The Americas Despite lower external procurement costs, an increase in sales prices prices Operating income decreased 81.0% YOY due to volume reduction and and profitability countermeasures, operating income decreased 86.0% 86.0% an increase in steel pri
Slide 15: Business Results by Customer Location
Business Results by Customer Location Business Results by Customer Location Asia Asia （¥100 Million） 18.4% 20.6% Japan Europe Japan 50.4% 10,000 17.3% Europe 49.9% The 17.3% Americas The 9,000 13.9% Americas 12.2% 8,000 7,720 Japan The Americas Europe Asia 7,000 1,419 -5.9% 6,476 Sales of automotive
Slide 16: Consolidated Balance Sheets
Consolidated Balance Sheets Assets Liabilities and Net Assets Net Assets Non- Non-Current Current Ratio of net Non- Non-current assets Current Assets liabilities liabilities worth to total (¥100 Million) (¥100 Million) capital 8,286 Change YOY 8,286 Change YOY 7,442 -844 7,442 -844 2,943 4,044 -348
Slide 17: Inventory/Interest-Bearing Debts/Capital Expenditure/Depreciation
Inventory/ Interest-Bearing Debts/ Capital Expenditure/ Depreciation Inventory Capital Expenditure Japan Non- Non-Japan Inventory turnover Japan Non- Non-Japan 7.5 （¥100 Million) （¥100 Million) 520 6.2 1,067 419 1,018 212 174 546 562 308 505 245 472 08/3 year end 09/3 Year end 08/3 Year end 09/3 Yea
Slide 18: 2. Consolidated Business Forecast for the Year Ending March 31, 2010
2. Consolidated Business Forecast for the Year Ending March 31, 2010 17
Slide 19: Forecast for the Year Ending March 31, 2010
Forecast for the Year Ending March 31, 2010 Business Forecast Net Sales ¥550.0 billion Operating income ¥3.0 billion Ordinary income -¥5.0 billion Net income -¥3.5 billion ⇒Aim for a positive operating income despite the severe business environment. Forecasted exchange rates US$=¥95.00 Euro=¥125.00
Slide 20: Forecast for the Year Ending March 31, 2010
Forecast for the Year Ending March 31, 2010 （¥100 Million） 09/3 10/3 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year decrease Difference ＜Actual＞ Actual＞ ＜Actual＞ Actual＞ ＜Actual＞ Actual＞ YOY ＜Forecast＞ Forecast＞ ＜Forecast＞ Forecast＞ ＜Forecast＞ Forecast＞ YOY Sales 3,833 2,643 6,476
Slide 21: Forecast by Business Segment
Forecast by Business Segment （¥100 Million） 09/3 10/3 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year decrease Difference YOY YOY ＜Actual＞ Actual＞ ＜Actual＞ Actual＞ ＜Actual＞ Actual＞ ＜Forecast＞ Forecast＞ ＜Forecast＞ Forecast＞ ＜Forecast＞ Forecast＞ Sales 3,833 2,643 6,476 2,500 3,000 5,
Slide 22: Forecast for Operating Income: Improvement Factors
Forecast for operating income: Improvement Factors (09/3 ⇒ 10/3) （¥100 Million） 09/3 YOY decrease ¥221 Effect of -¥191 volume reduction -290 External -¥431 procurement cost 10/3 Forecast reduction etc. Effect of exchange rate fluctuations Decline in Profitability+100 ¥30 sales prices countermeasures
Slide 23: Forecast by Geographical Segment
Forecast by Geographical Segment （¥100 Million) 09/3 10/3 Increase/ 1st half 2nd half Full year 1st half 2nd half Full year decrease Difference YOY ＜Actual＞ Actual＞ ＜Actual＞ Actual＞ ＜Actual＞ Actual＞ ＜Forecast＞ Forecast＞ ＜Forecast＞ Forecast＞ ＜Forecast＞ Forecast＞ YOY Sales 3,833 2,643 6,476 2,500 3,00
Slide 24: Forecast by Customer Location
Forecast by Customer Location （¥100 Million） 09/3 10/3 1st half 2nd half Full year 1st half 2nd half Full year Increase Difference /decrease /decrease ＜Actual＞ ＜Actual＞ ＜Actual＞ ＜Forecast＞ Forecast＞ ＜Forecast＞ Forecast＞ <Forecast> YOY YOY Sales 3,833 2,643 6,476 2,500 3,000 5,500 -976 -15.1% Japan 1
Slide 25: 3. Key Strategies for the Year Ending March 31, 2010
3. Key Strategies for the Year Ending March 31, 2010 24
Slide 26: Key Strategies for the Year Ending March 31, 2010
Key Strategies for the Year Ending March 31, 2010 Maintain full year Continue measures to thoroughly ■ ■ improve profitability and cash flows profitability Build up business foundation ■ ■ Restructure and strengthen business foundation for next growth stage (Sales:¥100 Million) 6,000 Business Result
Slide 27: Continue to Strengthen Profitability and Improve Cash Flow
Continue to strengthen profitability and improve cash flow Reduce capital expenditure －more than 50% decrease YOY 《09/3 ¥41.9 billion⇒10/3 ¥20.0 billion》 Reduce inventory －Improve inventory turnover, paying attention to the trend in demand Promote strict reduction in sales costs －Achieve cost reduct
Slide 28: Enhance and Reorganize Business Foundation: Reorganize Sales Structure in Japan
Enhance and reorganize business foundation Reorganize sales structure in Japan Consolidate sales departments Enhance marketing Merged with NSK Improve customer satisfaction NSK SALES NSK PRECISION （accelerate response speed ） CO., LTD. CO., LTD. Sales department Industrial machinery Precision machin
Slide 29: Enhance and Reorganize Business Foundation: Reorganize Production System (Bearings)
Enhance and reorganize business foundation Reorganize production system (bearings) Global：cost reduction by manufacturing in best location Global： Japan：Enhance manufacturing capability of roller bearings Japan： 【Japan】 Japan】 small-sized 【Indonesia】 NSK FUKUSHIMA bearings CO., LTD. NSK Indonesia Sa
Slide 30: Enhance and Reorganize Business Foundation: NSK China Technology Center
Enhance and reorganize business foundation Start operations at a new site, NSK China Technology Center (CTC) NSK global technology sites Autonomous structure in China Jinag Su, （Spanning R&D to technological Kunshan support for customers） Includes all business segments Scheduled for completion in Ju
Slide 31: Automotive Products: Strengthen Order-Winning Activities
Enhance and reorganize business foundation Automotive products：Strengthen order-winning activities and build up future foundation 【Enhance and reorganize business foundation for next generation 】 Strengthen <Respond to technological needs of ecological and intelligent cars> automotive ■ ■ Electronic
Slide 32: Industrial Machinery Bearings: Concentrate on Global Sales Expansion
Enhance and reorganize business foundation Industrial machinery bearings ：Concentrate on global sales expansion 【Enhance sales expansion for 【Sales expansion for aftermarket key fields】 sector 】 ■■ Aggressive fields strategy for growing ■ ■Expand sales by optimizing use of -wind turbines/mining/rail
Slide 33: Precision Machinery and Parts: Sweeping Reorganization of Business Structure
Enhance and reorganize business foundation Precision Machinery and Parts：sweeping reorganization of business structure Expand business foundation Reduce sales costs 【Enhance business foundation in Linear motion products and emerging countries】 mechatronics products ■ ■ China：Machine tools, Liquid cr
Slide 34: Supplementary Information: Capex, Depreciation, R&D
(Supplementary Information) For the Year Ending March 31, 2010 （¥100 Million） 08/3 09/3 10/3 Actual (Full year) Actual (Full year) Forecast (Full year) Capital expenditure（＊） 520 419 200 Japan 308 243 115 Non- Japan 212 174 85 The Americas 38 22 12 Europe 77 35 13 Asia 97 117 60 ＊Excluding intangibl