business results for q2, forecast for fy2019 and the 6 mid ... · forecasted business environment...
TRANSCRIPT
December, 2019
NSK Ltd.
Cautionary Statements with Respect to Forward-Looking StatementsStatements made in this report with respect to plans, strategies and future performance that are not historical fact are
forward-looking statements. NSK cautions that a number of factors could cause actual results to differ materially from
those discussed in the forward-looking statements.
Note : This document is an English translation of material written initially in Japanese.
The Japanese original should be considered the primary version
Business Results for Q2, Forecast for FY2019
and The 6th Mid-Term Management Plan
Copyright NSK Ltd. All Rights Reserved. 1
Contents
1. Business Results for Q2
2. Business Forecast for FY2019
3. The 6th Mid-Term Management Plan
(Supplementary Information)
Copyright NSK Ltd. All Rights Reserved. 2
1.Business Results for Q2
Copyright NSK Ltd. All Rights Reserved.
Business Environment
Summary of Business Results
3
Summary of Consolidated Business Resultsfor the Six Months Ended September 30, 2019
YOY
Sales : ¥ 434.8 billion (-¥ 74.8 billion / -14.7%)
Segment Income* : ¥ 16.7 billion (-¥ 29.7 billion / -63.9%)
Operating Income : ¥ 15.8 billion (-¥ 29.2 billion / -64.9%)
(O.I. %) (3.6%) (-5.2p)
Net Income Attributable toOwners of the Parent :
¥ 11.8 billion (-¥ 19.1 billion / -61.8%)
✓ Consolidated Business Results for FY2019: 1H (Apr.-Sep.)
*Segment Income : Operating income before deduction of other operating expenses
✓Uncertainty and stagnation of world economy persisted due to the prolonged US-China trade friction.
✓Demand decrease in both the industrial machinery and automotive businesses continued.
✓Exchange rate : further appreciation of the yen, primarily in CNY and EURO.
✓Decreased in both sales and operating income year-on-year mainly due tovolume decline.
✓Interim dividend :¥20/per share (same amount as the interim dividend in FY18; as planned.)
Copyright NSK Ltd. All Rights Reserved. 4
(Billions of yen)
FY2018 FY2019
1st half
<Actual>
1st half
<Actual>
Increase/
Decrease
YOY
Difference
YOY
1st half<FCST>
Sales 509.6 434.8 -74.8 -14.7% 464.0
Operating income 45.0 15.8 -29.2 -64.9% 25.0
<%> <8.8%> <3.6%> <5.4%>
Income before income taxes 45.1 15.6 -29.6 -65.5% 25.0
Net income attributable to owners of the parent 30.9 11.8 -19.1 -61.8% 19.0
(Ex. rate: 1USD=)
( 〃 1EUR=)
( 〃 1CNY=)
110.27
129.84
16.75
108.63
121.41
15.68
-1.64
-8.43
-1.07
-1.5%
-6.5%
-6.4%
110
125
16.5
*Reference
Segment income 46.4 16.7 -29.7 -63.9% 26.5
<%> <9.1%> <3.8%> <5.7%>
Major Indexes
ROE 11.4% 4.5%
Net D/E ratio (times) 0.23 0.28
Inventory turnover (times) 6.8 5.5
Summary of Consolidated Business Resultsfor the Six Months Ended September 30, 2019
*Segment Income : Operating income before deduction of other operating expenses
Copyright NSK Ltd. All Rights Reserved.
(Billions of yen)
FY2018
1st half
<Actual>
FY2019
1st half
<Actual>
Increase/
Decrease
YOY
Difference
YOY
FY2019
1st half<FCST>
Sales 135.9 119.7 -16.2 -11.9% 129.0
Industrial MachineryBearings
104.7 97.2 -7.5 -7.2% 103.0
Precision Machineryand Parts
31.2 22.5 -8.7 -27.9% 26.0
Operating
Income <%>
16.7<12.3%>
8.3<6.9%>
-8.4 -50.3% 12.0<9.3%>
(Ex. rate:1USD=)
( 〃 1EUR=)
( 〃 1CNY=)
110.27
129.84
16.75
108.63
121.41
15.68
-1.64
-8.43
-1.07
-1.5%
-6.5%
-6.4%
110
125
16.5
5
53.4 51.3 53.5 52.1 49.0 48.2
15.9 15.3 14.7 13.811.9 10.6
69.366.6 68.2 65.9
60.8 58.9
8.8 7.9 8.2 7.9
4.93.4
Q1 Q2 Q3 Q4 Q1 Q2
Ind BRG Precision O.I.
FY19FY18
12.7% 11.9% 12.1% 12.0%8.0% 5.8%
O.I. (%)
1USD= 109.07 111.47 112.91 110.19 109.90 107.36
1EUR= 130.06 129.62 128.79 125.13 123.49 119.33
1CNY= 17.13 16.37 16.33 16.33 16.07 15.29
Business Results: Industrial Machinery Business
✓Bearings: sales decreased due to sluggish sectors including capital goods (machine tools, robots) and consumer goods (home appliances), while infrastructure-related (wind turbines, railcars) remained robust.
✓Precision: Strongly affected by stagnation in sectors such as semiconductors and machine tools as well as customer inventory adjustment.
✓ Operating income decreased due to volume decline and product mix.
Copyright NSK Ltd. All Rights Reserved.
FY2018
1st half
<Actual>
FY2019
1st half
<Actual>
Increase/
Decrease
YOY
Difference
YOY
FY2019
1st half<FCST>
Sales 357.6 302.2 -55.4 -15.5% 321.0
AutomotiveBearings 176.5 162.2 -14.3 -8.1% 172.0
AutomotiveComponents 181.1 139.9 -41.1 -22.7% 149.0
Operating
Income <%>
26.7
<7.5%>
7.1
<2.3%>
-19.6 -73.6% 13.0
<4.0%>
(Ex. rate:1USD=)
( 〃 1EUR=)
( 〃 1CNY=)
110.27
129.84
16.75
108.63
121.41
15.68
-1.64
-8.43
-1.07
-1.5%
-6.5%
-6.4%
110
125
16.5
6
1USD= 109.07 111.47 112.91 110.19 109.90 107.36
1EUR= 130.06 129.62 128.79 125.13 123.49 119.33
1CNY= 17.13 16.37 16.33 16.33 16.07 15.29
89.4 87.1 88.2 84.2 82.6 79.6
93.8 87.2 83.576.2 72.6 67.3
183.3 174.3 171.6
160.5 155.2 147.0
15.3 11.4
11.8 6.4 5.1
2.0
Q1 Q2 Q3 Q4 Q1 Q2
Auto BRG Auto Comp O.I.
FY18 FY19
8.3% 6.6% 6.9%4.0% 3.3% 1.4%
O.I. (%)
Business Results: Automotive Business
✓Vehicle production volume declined: -12% in China, -20% in India YOY.
✓Automotive components: Volume decrease in AT-related products toward China. EOP in steering business.
✓Operating income decreased, largely affected by volume decline despite the reduction of labor cost.
Copyright NSK Ltd. All Rights Reserved. 7
2.Business Forecast FY2019(Updated and disclosed on November 5th)
Copyright NSK Ltd. All Rights Reserved.
Forecasted Business Environment
Business Forecast
8
Summary of Consolidated Business Forecastfor the Year Ending March 31, 2020
✓ Revision to original business forecast
vs. May forecast
Sales : ¥ 860.0 billion ( -¥ 85.0 billion / -9.0%)
Operating Income : ¥ 32.0 billion ( -¥ 31.0 billion / -49.2%)
(O.I. %) (3.7%)Net Income Attributable toOwners of the Parent :
¥ 21.0 billion ( -¥ 24.0 billion / -53.3%)
✓ 2nd half: Reviewed exchange rate assumptions: USD=¥108 (originally ¥110),
EUR=¥120 (originally ¥125), CNY=¥15.3 (originally ¥16.5)
✓ FY19 full-year dividend (forecast) remains unchanged at ¥40 per share
(Interim: ¥20, 2nd half: ¥20).
✓Delay in economic recovery.✓Industrial Machinery: Demand adjustment in machine tools, electrical,
and semiconductors expected to be sustained.✓Automotive: Global production volume to fall below 90 million. Decrease
primarily in China and India.
Copyright NSK Ltd. All Rights Reserved. 9
FY2018 FY2019
(Billions of yen)
Full year<Actual>
1st half<Actual>
2nd half<Revised FCST>
Full year<Revised FCST>
Increase/
Decrease
YOY
Difference
YOYFull year<May FCST>
Sales 991.4 434.8 425.2 860.0 -131.4 -13.3% 945.0
Operating income<%>
79.3
<8.0%>
15.8
<3.6%>
16.2
<3.8%>
32.0
<3.7%>
-47.3 -59.6% 63.0
<6.7%>
Income before income taxes 79.2 15.6 15.9 31.5 -47.7 -60.2% 62.5
Net income attributable to owners of the parent 55.8 11.8 9.2 21.0 -34.8 -62.4% 45.0
(Ex. rate: 1USD=)
( 〃 1EUR=)
( 〃 1CNY=)
110.91
128.40
16.54
108.63
121.41
15.68
108.00
120.00
15.30
108.32
120.71
15.49
-2.59
-7.69
-1.05
-2.3%
-6.0%
-6.3%
110
125
16.5
Segment income 83.3 16.7 18.3 35.0 -48.3 -58.0% 66.0
<%> <8.4%> <3.8%> <4.3%> <4.1%> <7.0%>
Summary of Consolidated Business Forecastfor the Year Ending March 31, 2020
Segment Income : Operating income before deduction of other operating expenses
Copyright NSK Ltd. All Rights Reserved.
(Billions of yen)
FY2018 FY2019
Full year<Actual>
1st half<Actual>
2nd half<Revised
FCST>
Full year<Revised
FCST>
Increase/
Decrease
YOY
Difference
YOYFull year<May FCST>
Total Sales 991.4 434.8 425.2 860.0 -131.4 -13.3% 945.0
Operating income 79.3 15.8 16.2 32.0 -47.3 -59.6% 63.0
<%> 8.0% 3.6% 3.8% 3.7% 6.7%
IndustrialMachineryBusiness
Sales 270.0 119.7 119.3 239.0 -31.0 -11.5% 265.0
Industrial Machinery Bearings 210.3 97.2 98.3 195.5 -14.8 -7.0% 210.0
Precision Machinery and Parts 59.7 22.5 21.0 43.5 -16.2 -27.2% 55.0
Operating income 32.9 8.3 8.7 17.0 -15.9 -48.3% 29.0
<%> 12.2% 6.9% 7.3% 7.1% 10.9%
AutomotiveBusiness
Sales 689.7 302.2 292.3 594.5 -95.2 -13.8% 650.0
Automotive Bearings 348.9 162.2 162.8 325.0 -23.9 -6.9% 352.5
Automotive Components 340.8 139.9 129.6 269.5 -71.3 -20.9% 297.5
Operating income 44.9 7.1 8.4 15.5 -29.4 -65.5% 33.0
<%> 6.5% 2.3% 2.9% 2.6% 5.1%
Others Sales 62.9 25.5 26.5 52.0 -10.9 -17.4% 59.0
Operating income 5.6 1.2 1.3 2.5 -3.1 -55.4% 4.0
<%> 8.9% 4.8% 4.9% 4.8% 6.8%
Eliminations (sales) -31.2 -12.5 -13.0 -25.5 +5.7 -29.0
Other operating expenses / Adjustments -4.2 -0.8 -2.2 -3.0 +1.2 -3.0
10
Forecast by Business Segment
Copyright NSK Ltd. All Rights Reserved.
Industrial Machinery Business -Business Environment-
100.0 108.8 104.7 105.6 97.2 98.3
26.9 30.5 31.2 28.5
22.5 21.0
126.9
139.3 135.9 134.1
119.7 119.3
10.2
18.1 16.7 16.2
8.3 8.7
1H 2H 1H 2H 1H 2H
Ind BRG Precision O.I.
FY19FY18FY17
8.1%
13.0% 12.3% 12.0%
6.9% 7.3%
O.I.(%)
Sales / Operating Income
Demand recovery delay.
Infrastructure: robust
Product mix worsened.
High Fixed cost.
-Sales initiatives: Capture demand in robust sectorsand aftermarket proactively.
-Fixed cost measures: Maximize operation andhuman resources structures. (transfer personnel across plants)
-Stick to CF: Reduce inventory, curb capital expenditure. -Measure against exchange rate:
Local procurement (Non-Japan),Global procurement(Japan) 11
RevisedFCST
Down from May Forecast Up from May Forecast
[Demand trend by Sector] ↑ Increase, →Unchanged, ↓Decrease
Sector
Actual 20/3 2H Forecast Forecast
20/3 1H
vs.
19/3 2H
20/3 2H vs. 20/3 1H 21/3 1H
vs.
20/3 2HAs of
May 2019
As of
Oct. 2019
Cap
ital g
oo
ds
Pre
cis
ion
Eq
uip
men
t
Machine Tools ↓↓ ↑↑ ↓ →
Semicon-ductors ↓↓ ↑↑ → ↑
Robotics ↓↓ ↑ ↓ →Injection Molding ↓ ↑↑ ↓ →
Motors ↓ ↑ → ↑Fluid
Machinery ↓ ↑ → ↑Steel Plant Facilities → → → ↓
Agricultural Machinery ↓ → → →
Infra
stru
ctu
re
Wind Turbines → ↑ ↑↑ →
Railcars ↑ → ↑↑ →Mining /
ConstructionMachinery
↓ → ↓ →
Co
ns
u-m
er
go
od
s
Home Appliances → → ↓ ↑
Aftermarket → → → →
Copyright NSK Ltd. All Rights Reserved.
Automotive Business -Business Environment-
Global Vehicle Production Volume
170.6 180.4 176.5 172.4 162.2 162.8
181.6 191.1 181.1
159.7 139.9 129.6
352.1 371.4
357.6 332.1
302.2 292.3
31.2
34.7
26.7
18.2
7.18.4
1H 2H 1H 2H 1H 2H
Auto BRG Auto Comp O.I.
FY19FY18FY17
8.9% 9.4% 7.5%5.5%
2.3% 2.9%
O.I.(%)
Sales / Operating Income
Economic environment deterioration.
Auto market slowdown.
High fixed cost.
Decrease in EPS.
-Leverage human resources for productivity improvement activities.
-Build solid supply chain (dual source)Prepare for trade/exchange rate risks.
-Curb capital expenditure.-Continue development activities towardregrowth in EPS business.
12
(unit : M)
FY 19 FcstFY15Act
FY16Act
FY17Act
FY18Act (in the
planning phase)
(as of Oct. 2019)
Source: IHS Automotive, NSK Estimates
Production Volume by Japanese Automakers(unit : M)
FY 19 FcstFY15Act
FY16Act
FY17Act
FY18Act (in the
planning phase)
(as of Oct. 2019)
RevisedFCST
9.0 9.1 9.4 9.5 9.5 9.6
17.7 17.9 16.9 16.8 16.8 16.5
21.0 21.9 22.2 21.7 21.8 21.0
24.1 27.5 27.6 25.9 27.5 23.7
3.94.1 4.0 4.2 4.3
4.0
13.513.9 15.0 14.7 15.2
12.9
89.294.4
95.1 92.8 95.187.7
0.0
20.0
40.0
60.0
80.0
100.0
Japan North America Europe China ASEAN6 Others
9.0 9.1 9.4 9.5 9.5 9.6
18.7 19.4 19.9 19.8 20.5 19.4
27.7 28.5 29.3 29.3 30.0 29.0
0
10
20
30
40 Non-Japan Japan
Copyright NSK Ltd. All Rights Reserved. 13
3. The 6th Mid-Term Management Plan(Announced on May 14th)
Copyright NSK Ltd. All Rights Reserved.
Provide values through evolution of MOTION & CONTROLTM
ESG management
Utilization of robust managerial resources
Business growth and profitability
Value created
<NSK’s 7 key SDGs>
NSK contributes to a safer, smoother society and helps protect the global environment
through its innovative technology integrating Motion & ControlTM.
As a truly international enterprise, we are working across national boundaries to improve relationships between people
throughout the world.
<Mission Statement>
-Safety, Quality, Compliance,
and Environment
-Corporate governance
-Personnel, Technology,
Organization, Information
-Balance investment in future
growth with shareholder returns
under a stable financial structure
Establish corporate foundation for sustainable growth (Ideal structure of NSK in 2026)
14
Vision for 2026 :Establish a corporate foundation for sustainable growth
3 key management tasks
-Environmental contribution(low friction, high efficiency, safe)
-Improvement of transmissionefficiency
-Contribution to an advanced technological society
-Realization of a more prosperous society
-Growth of a wide range of industries-Advancement in mobile society-Improvement of shareholder value
Copyright NSK Ltd. All Rights Reserved.
949.2 1,020.3 991.4 945.0
1,000.0
1,500.0
5th MTP (Results)
FY16 FY17 FY18
Embark on new chapter in evolution toward next 100
years
6th MTP
FY19 FY20 FY21
-New initiatives targeting growth
-Enhance managerial resources
-Contribute to the environment and society
Build business base and
strengthen resources in
preparation for next growth
phase -ESG management
-Utilization of robust managerial resources
-Business growth and profitability
Establish corporate foundation
for sustainable growth.Evolution of
MOTION & CONTROLTM
Secure sales of ¥1 trillion and profitability
6.7%8.0% 8.0%
(Billions of yen)
VISION 2026
Au
tom
otiv
e
Bu
sin
es
sIn
du
stria
l Mach
inery
B
usin
ess, O
thers
CAGR +3% Double-digit profitability
-Respond to changes in business environment
-Rebuild profit base
-Develop new products, target new fields
Sustained Growth
Transition to growth with profitability
Challenge next growth phase
15
(as of May 2019)
Positioning of the 6th MTP toward 2026
Copyright NSK Ltd. All Rights Reserved.
Safety, Quality, Compliance, Environment
New initiatives targeting growth
Enhance managerial resources
Op
era
tion
al
Excelle
nce
Contribute to
the environment and society
Personnel, Technology, Organization, Information
Build business base and strengthen resources in preparation for next growth phase
Co
nsta
nt p
urs
uit o
f co
mp
etitiv
en
ess
Secure sales of ¥1 trillion and profitability
6th MTP Concept -Strategy House-
16
Cre
atio
n o
f new
va
lue
Ch
alle
ng
ing
Inn
ovatio
n
NSK Core Values
Copyright NSK Ltd. All Rights Reserved. 17
Growth
Profitability
Efficiency
Financial
Stability
Shareholder
returns
Capital
expenditure
R&D
Management Targets6th MTP
5th MTP(FY18)
Results
Sales/
Growth ratio
Operating
Income %
ROE
Net D/E ratio
Equity ratio
Payout ratio
Share buyback
Capital expenditure(3-year total)
R&D
Expenses
¥991.4 billion
8.0%
10.4%
0.27 times
49.4%
(3-year total)
(Share buyback)
¥35.0 billion
36.3%
¥208.5 billion
(3-year total)
¥86.3 billion
Sales growth
2%/year
0.3 times
50%
Payout ratio30 - 50%
Cash dividend¥40/share
¥180.0billion
vs. Sales
3 - 4%
Management Targets6th MTP
Secure stable profitability
ROE exceeding cost of capital
Maintain an A-level credit ranking
Continue stable dividendAcquisition of treasury shares
Agile capital policy
Investments to underpin
sustainable growth
Continue developing technologies for further growth
8% or more
10% or more
or more
Industrial Machinery:Achieve sales growththat surpasses market growth
Automotive Brgs:Achieve sales growththat surpasses growth in globalvehicle production volume.
Automotive Comps: Secure orders torestart growth in steering business.
Copyright NSK Ltd. All Rights Reserved.
Infrastructure
Automation,
Labor-saving
Environmental
protection measures
×
Core productsNew
productsAftermarket
Growth Area
Products, Services
✓
✓
✓
✓
✓
+
Industrial Machinery Business
Consumer goodsWind turbines / Railcars
/ Construction
18
6th MTP<Strategy by
business segment>
Social needs and technological innovation
Capital goodsPrecision equipment
(Machine tools, Robots etc.)
New businesses
Smart technology
Higher-performance robotsFactory automation
Electrification, next-generation battery technology, renewable energy
Railway: Improved safety and comfortSmart innovation in construction and agricultural machinery
IoT, next-generation communications (5G)
Condition monitoring tools, remaining life diagnosis technology
ICT equip / High-functionality and energy-efficient home appliances
[Future Vision]
Evolve and construct new business foundation in response to changes in social needs- Growth exceeding economic cycle -
Copyright NSK Ltd. All Rights Reserved.
FY18 FY26
GAM
Precisionproducts
BearingsBearings for
Industrialinfrastructure
5 initiatives targeting growth
1
2
GAM
CMS
Actuators
<Growth strategy>
Expand business foundation through growth drivers such as
value provision, brand power and products + services.
Growth drivers
Brand
Industrial Machinery Business
-Wind power -Railways -Construction
-Information and communications-High-performance, energy-saving home appliances
FY26
Sales: +50%(vs. FY18)
Capture demand in growing sectors
Capture demand in sectors where markets expand reflecting social needs.
6th MTP<Strategy by
business segment>
Further expand NSK’s presence in demand areas including machine tools, robotics and automation.
Contribute to higher specs, environmental performance, labor-saving and reduction of downtime through NSK’s core precision products.
Provide values leveraging NSK’s strength, precision technology
19
Main spindle
・Rotation accuracy
・Heat-proof
・High-rigidity
Precision positioning
・Longer
precision life
・High-speed less noise
・Low abrasion
Condition monitoring
・Reduction of downtime
New proposal and contribution to required performance (Machine tools)
Main
spindleCMS
Core precisionproducts
Comprehensive
Product and
service-based
approach
Shift from
price-based to
value-based
approach
Copyright NSK Ltd. All Rights Reserved.
Industrial Machinery Business6th MTP<Strategy by
business segment>
4
5
Establish industrial actuators as new core product3 Leverage NSK’s strengths
to expand GAM business
Construct new business utilizing condition monitoring technology
Market expands as a key component supporting electrification
(Competitive advantages)Optimal design using NSK-produced component parts.Ensure high-quality, high-reliability, and high-performance.
Product-based + Solution-based businessContribute to customers’ productivityand quality improvement.Provide technology service and solutionservices
Establish CMS Development Center⇒ integrate business development
and engineering development
Product-
based
business
Solution-based
business by
providing
engineering and
solution services
20
-For railcars, construction, robots and medical use-Need for automation accelerates,
electrification in pneumatic/hydraulic devices
-Improved comfort, safety and environmental performance
Deliver unit/system products by leveraging NSK’s competitive advantage in component parts
Continue promoting 4 fundamental policies
- High-reliability products- Engineering support, service
response->Reduce end-user maintenance
costs
NSK’sstrengths
Strengthen channel
management
Cultivate
specialists
Supply/Logistics/Inventory
Promote utilization of ITAIP asset efficiency
program
Vibration control actuator(L: Actuator, R: Driver)
Customer/ End user
Improve productivity
Improve quality
Smart shop floor
Copyright NSK Ltd. All Rights Reserved.
Automotive Business6th MTP<Strategy by
business segment>
Powertrain
productsHUB bearings
Bearings for
in-vehicle motorsSteering Actuators
Electrification of power source
and in-vehicle parts
94 95 93 96 97 100107
116
4% 5% 7% 10%16%
21%
38%
54%
0%
20%
40%
60%
80%
100%
0
20
40
60
80
100
120
FY16 FY17 FY18 FY19 FY20 FY21 FY24 FY30
Electrification ratio (Right axis)
Global vehicle production increases moderately. Electrification ratio grows
Unit: Million
vehicles
C A S EConnected Autonomous Shared Electric
Advanced steering/control functions
Technology to support mechanical parts
High-efficiency, weight reduction, noise reduction
Areas NSK contributes to
×
21
(Source:IHS Automotive, NSK forecast in May 2019)
Vehicle needs /
technological innovation
Enviro
nmentSafety Comfort
Conve
nience
Mobility
Global vehicle production
[Future Vision]
Establish new presence by responding to innovations in vehicle technology- Achieve sales growth that surpasses growth in global vehicle production -
Copyright NSK Ltd. All Rights Reserved.
1 5 initiatives targeting growth
1 Expansion in Powertrain business
FY26
Sales: +50%(vs. FY18)
2 4 8 14 5 17
33 49
87 79
66 53
93 100 107
116
FY18 FY21 FY24 FY30
EV HEV ICE
EV
HEV
ICE
Automotive Business6th MTP<Strategy by
business segment>
Unit: Million
vehicles
Vehicle production volume forecast by
power sourceRespond to diversified powertrain in line
with shift to electric-powered vehicles
22
ICE
HEV
Respond to expansion in automatic
transmission (AT) systems and multistep AT
Increased variation in bearings used due to
diversification in transmission systems.-Deliver value through packaged optimized
design proposals.
EV
New products: Traction drive unit/systems
Technology proposals for motor reducers
and 2-speed transmissions-Improve electric-efficiency through lightweight low-torque products, noise reduction
AT
ICE+HEV: demand expansion
to continue-Higher installation rate, multistep AT,
Largest customer increasing volume
-Increasing technological requirements
Compact, lightweight units
More efficient friction control
(Source:IHS Automotive, NSK forecast)
Copyright NSK Ltd. All Rights Reserved.
Automotive Business6th MTP<Strategy by
business segment>
Differentiate through technological
capability and improve electrical
efficiency
low noise,
low torque
Establish supply
structure
Improve safety, comfort and convenienceElectric brakes, fan motors, sliding seats
2
3
Expand sales by leveraging
engineering ability
High-reliability, low torque, high-load
4
5 Ball screws for brakes
Develop new applications
-Steer-by-wire etc.
FY18 FY21 FY24 FY30
Number of in-vehicle motors
6,000
8,000
4,000
(NSK forecast)(Millions of
units)
23
Acceleration in autonomous driving
technology and electrification
Steering & Actuator businessExpand in-vehicle
motor business
Dramatic increase in in-vehicle motors due to electrification
Expand HUB bearing business
Growing need for safety and fuel efficiency
Expand actuator business
Extend product range Leverage “core assets” of mechanical
parts and software
・Reduce design man-hours, lead time
・Improve efficiency in R&D costs per project
Utilize strategic alliances
Restart growth in steering business
Experimental SbW vehicle with next-generationsteering control software
Steering & Actuator Sales
6th MTP
FY26
Sales: +80%(vs. FY18)
FY26
Sales: +30%(vs. FY18)
FY26
Sales: +30%(vs. FY18)
Copyright NSK Ltd. All Rights Reserved.
Finance Strategy / Policy on Shareholder Returns
- Net D/E ratio of around 0.3 times
- Ratio of net worth to total capital of around 50%
Maintain an A-level credit rating to support growth and
enable the company to withstand cyclical impact
Stabilization of
shareholder returns
Growth with profitability
Maintenance in stabilization of financial
base
Balance investment in future growth with shareholder returnsunder a stable financial structure
- ROE 10% or morePursuit of capital efficiency
exceeding the cost of capital
- Payout ratio 30 - 50%¥40/share or more (6th MTP)
- Acquisition of treasury shares
Agile capital policiesTotal return ratio (3 years) approximately 50%
24
6th MTP
Copyright NSK Ltd. All Rights Reserved.
Contribute to the environment and society
Environment
E
Society
S
Governance
G
[SDGs Declaration]
25
EnvironmentalManagement
Safety management
Compliance
Quality management
Governance
Safety, Quality, Compliance, Environment
New initiatives targeting growth
Enhance managerial resources
Op
era
tion
al
Ex
ce
llen
ce
Ch
alle
ng
ing
Inn
ova
tion
Contribute to
the environment and society
Personnel, Technology, Organization, Information
Build business base and strengthen resources in preparation for next growth phase
Secure sales of ¥1 trillion and profitability
NSK Core Values
Initiatives in the 6th MTP
- Contribute to the environment and society-
(Supplementary Information)
ESG management: NSK will fulfill its responsibilities to environmental and societal issues by strengthening managerial resources and NSK’s core values + corporate governance.
In line with our Mission Statement, NSK will work to resolve societal issues by conducting sincere and responsible business operations and achieving innovation in our products and services,
in order to help realize a sustainable society.We will uphold the spirit of all 17 SDGs, and have selected seven SDGs that are particularly
interlinked with our business, which we will place priority on tackling.
・Strengthen group governance
・Hold fruitful dialogues with stakeholders
・Reduction in CO2 emissionsSBT target:- 60% by 2050 (vs. 2017)
・Products that contribute to the environment by offsetting CO2 emissions・Effective use of resources : achieve 99% recycling rate at global plants
・Create quality and safety –focused culture which contributes to safety and peace of mind for market and customers
・Create an organization that is trusted by society and allows employees to work with vibrancy and achieve their full potential
Copyright NSK Ltd. All Rights Reserved. 26
(Supplementary Information)
Copyright NSK Ltd. All Rights Reserved.
Industrial Machinery Business
Capture Demand in Growth Sectors : Railcars
地域別鉄道事業規模推移
High speed Safety
Extension of travel
distance
High-reliabilityHigh-performance
bearings
MRO
・OEM business receipt of first order.
・MRO business‐SNCF bearing for axle
shaft receipt order.
・Further expansionin Japan.・Building achievements
overseas.
Extend NSK presence multidirectionally
Actuator
CMS
NSK’s strengthsHigh-reliability, engineering analysis capability, track record in Asia
GAM sales expansion strategy
Comfort
Expand our
share in major
US paper
manufacturer
Global demand of
same customer
Sales expansion 1
Order Receipt
Improve brandpower
EU
China
Actuator:Vibration control CMS:-Early detection
of abnormalities.-Predictive maintenance.
<NSK’s strengths>-High-reliability products(severe usage environment [high temperature environments].)-Engineering support, service response.->Reduce end-user maintenance costs.
Paper
Heavy industry etc.NSK vibration control actuator
(left: Actuator, right: Driver) Other sectors
Source:SCI Verkehr, NSK prediction
26
Expansion in the global market
・CRRC-Entry into high-speed railway.-Expand market share insubway business.
27
(Global Aftermarket)
China:Expansion of railroads
EU :Higher performance, CMS needs
Europe
China
2022
23(単位:兆円)
World railway business scale
(Unit: Trillion Yen)
*Including new construction, maintenance, operation of vehicles
Sales expansion 2
Sales expansion 3
Enhance inventory
Effects to paper market of NA region->Receipt of order from one customer
Sales activity for another
customer underway
Effects to global
paper market
Accelerate initiatives
(Status of Initiatives)
Copyright NSK Ltd. All Rights Reserved.
Automotive Business
Traction Reducer+Ultrahigh speed motor.Compact, light-weight, Noise reduction
Further expansion in electric-powered vehicles.
Response to electrification
FY30 forecast: electric-powered vehicles
ratio 57%(+4ppt)
Ball screws for brake booster :Steady sales activities
EV
HEV
Continue EPS sales activities.
Cooperation agreement with VW Group Components
Enhanceengineering skill Expand the lineup
Share management
resources
Speed up
development
・Column-type EPS:
・Rack-type EPS:
Roll-out to
other
OEMs.
・International standard on Advanced Emergency Braking System was formed (June 2019).・Shorten braking start time from detection
-> improve superiority in ball-screw type.
Steering & Actuator Sales
Growth in Steering & Actuator Business
第6次中計
Actualize regrowth scenario
in the 7th MTP ・Establish a projectteam.・Joint development of new EPS products.
Demand expansion
EPS
BS
Response to diversified powertrain.
Development in Seamless 2-speed e-axle concept.
Increased variation in bearing used.
-> Sure to capture business opportunities.
*Traction Reducer:Response to prototype requestsfor 2 customers are underway
28
Two-speed transmission
Torque sensor+electric shift actuator+FP/SP
Increase acceleration and maximum speed, extend drive
distance, shock-free gear changing
6th MTP
Enhance competitiveness by leveraging core assets.
Changes in customer developmentschedule.
Highly responsive
(Status of Initiatives)
Copyright NSK Ltd. All Rights Reserved.
NSK’s Contribution to the Environment
Maximize the environmental contribution through products and minimize the environmental impact from business activities
Global environment conservation committee
The highest decision-making body for environmental management.Safety Quality Compliance Environment
President
and CEO
CO2 emissions reduction through business activitiesCO2 emissions reduction
through products
1. Innovation in manufacturing engineering
Contribution through products
・Smart factory.
・Introduction of new-heattreatment technology.
・Install photovoltaic equipment.・Promote the purchase of
renewable energy (water,wind).
FY2018 Greenhouse gases (CO2 equivalent) Emissions (Scope1,2) 980 kt Contribution 1,390 kt
Goals
Heat treatment facility Heat pump chiller Steering plant in Thailand
29
・Reduction in CO2 emissions. Target:- 60% by 2050 (vs. 2017)
・Products that contribute to the environment by offsetting CO2 emissions.
・Effective use of resources : achieve 99% recycling rate at global plants.
Common value standard to take top priority in management decision-making and actions.
Added environment to NSK’s core values Shift to organizational structure under the direct control of the CEO
2. Promotion of energy-saving and fuel conversion
3. Utilization of renewable energy
・Upgrade to high-efficientfacilities.・Change heat source for air
conditioning.
・Calculation on the amount of contribution.-Formulate guidelines
Improvement in base performance of products.
+Contribution to energy diversification applications.
-Promote development of environmentally friendlyproducts.
NSK Eco-Efficiency Indicators (Neco)
(Status of Initiatives)
Copyright NSK Ltd. All Rights Reserved.
560.4 545.8
240.6 285.0
285.4 234.1
1,086.5 1,064.9
Current liabilities Non- Current liabilities Total equity
578.8 583.5
507.6 481.3
1,086.5 1,064.9
Non-Current assets Current assets
Assets Liabilities / Total equity
-21.6
-26.3
+4.7
-21.6
-51.3
-14.6
+44.3
Ex. Rate FY18 End of Q4 FY19 End of Q2
1USD= 111.01 107.96
1EUR= 124.56 118.04
1CNY= 16.48 15.14
49.4% 49.3%
30
(Results of 1st Half of FY2019)
Consolidated Balance Sheet
Change from
Q4 FY18
Change from
Q4 FY18(Billions of yen)
(Billions of yen)
FY18 FY19
End of Q4 End of Q2
FY18 FY19
End of Q4 End of Q2
Ratio of equity attributable to owners of the parent to total assets
Copyright NSK Ltd. All Rights Reserved.
13.9
29.1
11.1
13.1
24.9
10.5
27.1
54.0
21.7
Japan Non-Japan
Inventories
Interest-bearing debt
63.3 64.9
96.2 92.7
159.5 157.6
6.6 5.5
Japan Non-Japan Inventory turnover
Capital Expenditure
Depreciation and Amortisation
238.6 248.6
36.2 31.5274.8 280.1
0.27 0.28
Japan Non-Japan Net D/E ratio
10.6 11.4 12.6
13.3 13.4 14.2
23.9 24.9 26.8
Japan Non-Japan
31
(Results of 1st Half of FY2019) Inventories / Interest-Bearing Debt,Capital Expenditure / Depreciation and Amortisation
(Times)
(Billions of yen) (Billions of yen)
(Billions of yen)(Billions of yen)
FY18 End of Q4 FY19 End of Q2
FY18 End of Q4 FY19 End of Q2
FY18 FY18 FY19
1st Half 2nd Half 1st Half
FY18 FY18 FY19
1st Half 2nd Half 1st Half
Copyright NSK Ltd. All Rights Reserved.
FY20181st half
<Actual>
FY20191st half
<Actual>
FY2019Full year
<FCST>(Billions of yen)
Capital Expenditure 81.1 21.7 60.0
Depreciation and
Amortisation 48.8 26.8 52.0
R&D Expenses(on a statutory basis)
19.0 9.2 19.0
R&D Expenses (on a managerial basis) 32.4 15.9 32.0
6th MTPFY2019-FY2021<Original Plan>
180.0
160.0
ー
vs. Sales
3 – 4%
32
(Supplementary Information) Capital Expenditure,
Depreciation and Amortisation, R&D Expenses
Copyright NSK Ltd. All Rights Reserved. 17
Numerical Targets / Results
FY18Original Plan
FY18
Actual
Sales ¥1 trillion¥991.4
billion
Operating
Income
¥100.0
billion
¥79.3
billionNet Income
attributable to owners of the
parent
¥70.0
billion
¥55.8
billion
Operating
Income %10.0% 8.0%
ROE10.0% or
more10.4%
Net D/E ratio 0.3 times 0.27 times
Exchange rateUSD=105
EUR=120
CNY=16.7
USD=110.9
EUR=128.4
CNY=16.5Achievements and Shortcomings
33
Embark on new chapter in evolution towards next 100 years
Business Foundation as 1 trillion Yen Company
NSK Vision 2026 Setting the Future in Motion
Industrial Machinery ・ Automotive
Sustainable Growth
Deliver new value to societyWork together with stakeholders
Reconstruct profit base
Increase and stabilize profitability
Monozukuri, quality, personnel
Expand into new growth fields
Growth in core businesses
New products, new fields
Operational
Excellence
Innovate
and Challenge
Safety ・ Quality ・ Compliance
Review of the 5th MTP
Concept of the 5th MTP
●Growth in powertrain business and recovery in industrial machinery business (FY2017 reached a record-high performance)
●Developed and proposed new technologies and products●Started smart-factory model-line operations ●Expanded initiatives to address social issues (ESG, SDGs)●Strengthened shareholder returns. Total return ratio 57% (3-year total)
●¥1 trillion sales and a double-digit operating profit ratio remains an ongoing challenge●Delay in EPS growth restart scenario ●Productivity improvements leveraging ICT
(Supplementary Information)
Copyright NSK Ltd. All Rights Reserved. 34
Automotive Business
689.7 70%Industrial Machinery Business
270.0 27%
Others
(Billions of yen)FY2018
Total 991.4
Steel Ball
FY2018 Sales Breakdown by Business Segment
(Supplementary Information)
Precision
59.7
6%
Ind Brg
210.3
21%
Auto Brg
348.9
35%
Auto Comp
340.8
35%
Others
31.7
3%
Copyright NSK Ltd. All Rights Reserved. 35
323.4 289.5354.5 363.8 333.3 329.1 328.8 318.4 330.5 372.1 367.5 356.0
78.870.6
85.5 86.3 103.4 134.5 164.8 183.7 165.2155.5 157.6 151.5111.9
98.5
102.2 108.0 102.7124.6
133.8 131.8 121.9137.9 130.1 121.5133.6
128.982.6 89.1 91.4
167.2210.2 204.4 201.2
212.1 195.0176.5
85.7 86.1 102.0
116.3
137.2 137.0 130.4142.8
141.1139.5
647.6587.6
710.4 733.2 732.8
871.7
974.9 975.3 949.21,020.3 991.4
945.050.1% 50.7% 50.1% 50.4%
54.5%
62.2%
66.3% 67.4%65.2%
63.5% 62.9% 62.3%
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Japan The Americas Europe China Other Asia Non-Japan ratio
( Asia)
Japan
50%
Asia
21%
Europe
17%
Japan
38%
The Americas
16%
Europe14%
The
Americas
12%
(Billions of yen)
China19%
Other Asia13%
Japan
37%
The Americas
16%
Europe13%
China20%
Other Asia14%
Business Trends – Sales by Customer Location –
Forecast
(Supplementary Information)
Copyright NSK Ltd. All Rights Reserved. 36
522.8 522.2 581.0
628.5
717.2 772.0
647.6 587.6
710.4 733.2 732.8
871.7
974.9 975.3 949.2
1,020.3 991.4
17.8
26.0
38.3 42.6
62.4 69.3
22.1
11.3
43.5 44.4
32.4
68.0
97.3
65.3
97.9
79.3
0
20
40
60
80
100
120
0
200
400
600
800
1,000
(Billions of yen)
$ 125 116 108 110 117 115 101 93 86 79 83 100 110 120 108 111 111
EURO 118 131 134 137 150 162 145 131 113 109 107 134 139 133 119 130 128
Operating Income %
Operating Income (Right)Sales (Left)94.7
FY07 FY08FY05 FY06FY03 FY04FY02 FY09 FY10 FY11 FY12 FY13 FY14 FY15
・Select & Focus Strategies・Assembly of Streamlined Competitive Business Units
(Billions of yen)
・Growth Strategies
・Improve Profitability
・Respond to Paradigm Shifts
・Reorganize Business Structure
Developing Corporate
Fundamentals to Support a
1 trillion Yen Company
Embark on new
chapter in evolution
towards next 100 years
FY16 FY18
IFRSJP GAAP
1st MTP 2nd MTP 3rd MTP 4th MTP 5th MTP
FY17
-1.4%
8.0%
11.9% 12.1%14.0%
16.1%
1.8%
2.0%
10.3% 10.6%
5.2%
9.2%
15.3% 14.9%
9.9%
13.9%
10.4%
3.4%
5.0%6.6% 6.8%
8.7% 9.0%3.4%
1.9%6.1% 6.1%
4.4%7.8%
10.0% 9.7%6.9%
9.6% 8.0%
ROE
The 5th Mid-term Plan
Business Trends – Consolidated Business Trend –
(Supplementary Information)
Copyright NSK Ltd. All Rights Reserved.
Copyright : NSK Ltd. All rights reserved for all pages.