Slide 1: Financial Conference for the Results of the Six Months Ended September 30, 2003
FINANCIAL CONFERENCE FOR THE RESULTS OF THE SIX MONTHS ENDED SEPTEMBER 30, 2003 AND FORECASTS FOR THE YEAR ENDING MARCH 31, 2004 Seiichi Asaka President & CEO November 06, 2003 NSK Ltd. Cautionary Statements with Respect to Forward-Looking Statements Statements made in this report with respect to pl
Slide 2: Business Results for the Six Months Ended September 30, 2003
Business Results for the Six Months Ended September 30, 2003 1
Slide 3: Summary of the Interim Business Results for FY 2003
Summary of the Interim Business Results for FY 2003 (6 months ended Sep. 30, ‘02) (6 months ended Mar. 31, ‘03) (6 months ended Sep. 30, ‘03) Difference (Revised (Initial (¥100 million) FY ’02:1st half FY ’02:2nd half FY ’03:1st half (%) forecast) forecast) Sales 2,607 2,621 2,538 -2.6% 2,530 2,470
Slide 4: Changes in the Scope of Consolidation
Changes in the Scope of Consolidation (1) Changes in the scope of consolidated subsidiaries (76 companies 76 companies) < Increase due to establishment of new corporate entities: 4 companies > • NSK (China) Investment Co., Ltd. (Equity: 100%), etc. < Increase due to transfer from the scope of affili
Slide 5: Consolidated net sales – By customer location
Consolidated net sales –By customer location– Upper: Effect of (Six months ended (Six months ended discontinued Increase/ operations Net increase/ (¥100 million) Sep. 30, 2002) Sep. 30, 2003) FY ’02:1st half FY ’03:1st half (decrease) Lower: Effect of (decrease) FOREX Japan -113 (+5.7%) 1,366 1,324
Slide 6: Consolidated net sales – By business segment
Consolidated net sales –By business segment– Upper: Effect of (Six months ended (Six months ended discontinued Increase/ operations Net increase/ (¥100 million) Sep. 30, 2002) Sep. 30, 2003) FY ’02:1st half st FY ’03:1 half (decrease) Lower: Effect of (decrease) FOREX Bearings (+3.3%) 1,604 1,641 +3
Slide 7: Consolidated net sales – Precision machinery and parts
Consolidated net sales –Precision machinery and parts– (Year ending (Year ending (Year ended Mar. 31, ‘02) (Year ended Mar. 31, ‘03) (¥100 million) Mar. 31, ‘04) Mar. 31, ‘04) FY 2001 FY 2002 FY 2003 FY 2003 1st half 2nd half 1st half 2nd half 1st half 2nd half Precision machinery 209 131 165 184 19
Slide 8: Consolidated business results – By geographical segment
Consolidated business results –By geographical segment– (Six months ended Sep. 30, ‘02) (Six months ended Sep. 30, ‘03) Revised Initial (¥100 million) FY ’02:1st half FY ’03:1st half Y.O.Y. forecast forecast Japan Sales 1,920 1,868 1,872 1,830 Operating income (%) 42 (2.2%) 64 (3.4%) +52.4% 73 68 Th
Slide 9: Operating income: Improvement factors (Japan)
Operating income: Improvement factors (FY ’02:1st half VS FY ’03:1st half) (¥100 million) Japan FY ‘03: 1st half Effect of the withdrawal from the seat belt business 64 +4 Procurement cost Price reductions, etc. reductions +5 Effect of +22 inclusion of NSK Needle Bearings Co., -15 +33 Ltd. to the Re
Slide 10: Operating income: Improvement factors (Europe)
Operating income: Improvement factors (FY ’02:1st half VS FY ’03:1st half) (¥100 million) Europe FY ‘03: 1st half Benefits from production line transfers, Others 3 SG&A cost reductions, etc. +1 Procurement cost reductions +4 +13 Decrease in Reduction of headcount +6 (Net improvement: +13) sales volu
Slide 11: Summary of Benefits from the 2nd Phase of the NSK Business Restructuring Program
Summary of Benefits from the 2nd Phase of the “NSK Business Restructuring Program” (6 months ended Sep. 30, ‘03) (Year ending Mar. 31, ‘04) (¥ 100 million) FY 2003:1st half FY 2003 Profit contribution Initial profit (Compared to contribution forecast FY 2002: 1st half) (Compared to FY 2002) Restruct
Slide 12: Consolidated business results – By business segment
Consolidated business results –By business segment– (Six months ended Sep. 30, ‘02) (Six months ended Sep. 30, ‘03) Revised Initial (¥100 million) FY ’02:1st half FY ’03:1st half Y.O.Y. forecast forecast Bearings Sales 1,604 1,641 1,648 1,600 Operating income (%) 94 (+5.8%) 97 (+5.9%) +3.2% 96 90 Au
Slide 13: Consolidated non-operating income and losses
Consolidated non-operating income and losses (¥100 million) (Six months ended (Six months ended (Six months ended Sep. 30, 2002) Mar. 31, 2003) Sep. 30, 2003) FY ’02:1st half FY ’02:2nd half FY ’03:1st half Y.O.Y Operating income 65 113 95 +30 Non-operating income 40 41 35 -5 Interest and dividend i
Slide 14: Consolidated extraordinary income and losses
Consolidated extraordinary income and losses (Six months ended (Six months ended (Six months ended Sep. 30, 2002) Mar. 31, 2003) Sep. 30, 2003) (¥100 million) FY ’02:1st half FY ’02:2nd half FY ’03:1st half Y.O.Y Ordinary income 32 76 61 +29 Extraordinary income 150 10 27 -123 Gain on sales of prope
Slide 15: Consolidated balance sheets
Consolidated balance sheets (¥100 million) (Six months ended (Six months ended (Six months ended Difference from Sep. 30, 2002) Mar. 31, 2003) Sep. 30, 2003) the previous FY ’02:1st half FY ’02:2nd half FY ’03:1st half half-year Current assets 2,758 2,858 2,829 -29 Cash and deposits 298 373 293 -80
Slide 16: Consolidated inventories
Consolidated inventories (Six months ended (Six months ended (Six months ended (¥100 million) Sep. 30, 2002) Mar. 31, 2003) Sep. 30, 2003) Y.O.Y Excluding effect Y.O.Y in local FY ’02:1st half FY ’02: 2nd half FY ’03:1st half of FOREX, etc. currencies Japan 409 380 362 -18 -18 <Non- 244 184 172 -12
Slide 17: Consolidated capital expenditures
Consolidated capital expenditures (Six months ended (Six months ended (Six months ended (Six months ending Sep. 30, 2002) Mar. 31, 2003) Sep. 30, 2003) Mar. 31, 2004) (¥100 million) FY ’02:1st half FY ’02: 2nd half FY ’03:1st half FY ’03: 2nd half <Forecast> Total capital 132 98 108 132 expenditures
Slide 18: Consolidated balance sheets
Consolidated balance sheets (¥100 million) (Six months ended (Six months ended (Six months ended Difference from Sep. 30, 2002) Mar. 31, 2003) Sep. 30, 2003) the previous FY ’02:1st half FY ’02:2nd half FY ’03:1st half half-year Current liabilities 2,314 2,274 2,260 -14 Notes and accounts payables 8
Slide 19: Consolidated interest bearing debts
Consolidated interest bearing debts (¥100 million) D/E ratio (times) 1.57 1.43 1.31 1.32 1.21 1.08 2,724 2,614 2,678 2,629 2,458 2,478 556 514 554 561 403 Overseas 2,168 2,164 2,060 2,055 2,068 Japan FY 1999 (Year-end) FY 2000 (Year-end) FY 2001 (Year-end) FY 2002 (Year-end) FY(Interim) 2003 FY 2003
Slide 20: Cash flow (FY 2003: 1st half)
Consolidated cash flow (FY 2003: 1st half) ¥100 million (Excluding the effect of exchange rate fluctuations) (1) Cash flow provided by (2) Cash flow used in (3) Cash flow used in Operating activities +123 Investing activities -140 Financing activities -56 133 Depreciation Source of Funds Ordinary in
Slide 21: Forecasts for the Year Ending March 31, 2004
Forecasts for the Year Ending March 31, 2004 20
Slide 22: Consolidated business forecasts for the year ending March 31, 2004
Consolidated business forecasts for the year ending March 31, 2004 Year ended Year ending March 31, 2003 March 31, 2004 FY 2002 FY 2003 Y.O.Y (¥100 million) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Net sales 2,607 2,621 5,228 2,538 2,5
Slide 23: Consolidated net sales forecast – By customer location
Consolidated net sales forecast –By customer location– Year ended Year ending March 31, 2003 March 31, 2004 (¥100 million) FY 2002 FY 2003 Y.O.Y (%) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Total 2,607 2,621 5,228 2,538 2,542 5,080 -2.
Slide 24: Consolidated net sales forecast – By business segment
Consolidated net sales forecast –By business segment– Year ended Year ending March 31, 2003 March 31, 2004 (¥100 million) FY 2002 FY 2003 Y.O.Y (%) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Total 2,607 2, 621 5,228 2,538 2,542 5,080 -2.
Slide 25: Consolidated net sales forecast – By geographical segment
Consolidated net sales forecast –By geographical segment– Year ended March 31, 2003 Year ending March 31, 2004 FY 2002 FY 2003 (¥100 million) <Actual> <Actual> <Actual> <Actual> <Forecast> <Forecast> 1st half 2nd half Total 1st half 2nd half Total Sales 1,920 2,035 3,955 1,868 1,955 3,823 Japan Oper
Slide 26: Consolidated net sales forecast – By business segment
Consolidated net sales forecast –By business segment– Revised Revised (¥100 million) forecast forecast 1st half 2nd half (Aug. 07, ’03) (Oct. 31, ’03) Total Sales 4,980 5,080 2,538 2,542 Operating income 230 230 95 135 Bearings Sales 3,218 3,245 1,641 1,604 Operating income 206 211 97 114 Automotive
Slide 27: Profitability of the Precision Machinery and Parts Business
Profitability of the Precision Machinery and Parts Business (¥100 million) FY ’02: FY ’03: FY ’03: FY ’03: FY ’03: 2nd half 1st half 1st half 1st half 2nd half <Actual> <Actual> <Initial <Actual> <Reviewed forecast> forecast> Sales 184 197 200 197 253 Operating income -29 -15 0 -15 +15 (Difference f
Slide 28: New Developments in NSK's Needle Bearing Business
New Developments in NSK’s Needle Bearing Business 27
Slide 29: New Developments in NSK's Needle Bearing Business (Agenda)
New Developments in NSK’s Needle Bearing Business (Agenda) 1/5 NSK’s Position in the Needle Bearing Market Current Status of the Needle Bearing Market Main Applications for Automotive Needle Bearings NSK’s Global Approach to the Needle Bearing Business 28
Slide 30: NSK's Position in the Needle Bearing Market
NSK’s Position in the Needle Bearing Market 2/5 NSK’s Global Bearing Sales by Industry Breakdown of Automotive Bearing Sales 2002 Hub unit bearings 24% Others ¥160 48% General billion Needle industrial ¥320 Automotive bearings 16% bearings billion bearings Tapered roller bearings 50% 50% 12% Sold on
Slide 31: Current Status of the Needle Bearing Market
Current Status of the Needle Bearing Market 3/5 Domestic Market Share of Global Market Share of Needle Bearings Needle Bearings 2002 Others 20% B Others 31% NSK 30% ¥76 36% ¥300 A billion 10% billion A NSK 33% 10% C 30% Automotive ¥25 billion General industrial ¥5 billion 30
Slide 32: Main Applications for Automotive Needle Bearings
Main Applications for Automotive Needle Bearings 4/5 <Global Demand from Japanese Auto Makers> Automatic Transmission Unit Market Share of Needle Bearings for Automatic Transmission Units Others 16% A 12% ¥23 NSK 54% billion Number of Needle Bearings used: 15 24 D 18% Market Trend Japanese automatic
Slide 33: NSK's Global Approach to the Needle Bearing Business
NSK’s Global Approach to the Needle Bearing Business 5/5 1963 Start production at a joint venture company with The Torrington Company (NSK’s sales and production were restricted to Japan) 2000 Our major Japanese customers begin transfer of production to overseas production sites (Global expansion of
Slide 34: Building on the Business Restructuring Phase to Enter a New Stage of Growth and Expansion
Building on the “Business Restructuring” Phase to Enter a New Stage of Growth and Expansion 33