CONSOLIDATED BUSINESS RESULTS

Transcription

1 CONSOLIDATED BUSINESS RESULTS FOR THE FIRST QUARTER ENDED JUNE 3, 29 JULY, 3 29 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. 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.

2 1 Contents Consolidated Business Results for FY 29:Q1 Topics Acceleration of Restructuring Global Production Sites Establishment of Precision Machinery and Parts Subsidiary in China (Supplementary Information) P2~P15 P18 P19

3 Consolidated Business Results for FY 29:Q1 2

4 Summary of Consolidated Business Results for FY 29:Q1 Business Results for FY29 9:Q1 Demand from machine tool and industrial machinery manufacturers decreased compared to FY28:4Q, due to delayed economic recovery and continued inventory adjustment. Inventory adjustment by automakers progressed. Signs of a recovery ery in production was seen due to the positive effects of stimulus policies implemented by governments around the world. Demand from liquid crystal display and semiconductor production manufacturers remained stagnant due to reduced capital investment. Net Net sales totaled billion (39.5% decrease YOY) Operating loss 4.5 billion due to substantial volume reduction and the appreciation of the Japanese yen although profitability countermeasures and reduction of external procurement costs contributed positively to results. Net Net sales increased and operating loss shrank compared to FY28:Q4. Expected Business Performance for FY 29: 9:Q2 Although inventory adjustment by industrial machinery manufacturers is expected to be moderate, a delay in demand recovery is expected. Automobile production is expected to continue in a recovery phase e from Q1. We We will continue to implement comprehensive profitability improvement measures in this severe environment 3 No revision has been made to the first half and full year forecast for FY 29 announced on May 12, 29

5 Summary of Consolidated Business Results for FY 29:Q1 ( 1 Million) 9/3 1/3 Q1 1st half < Actual > Q1 Increase /decrease YOY % 1st half (Forecast) (Forecast) Sales 1,915 3,833 6,476 1, % 2,5 5,5 Operating income <%> <8.%> <7.5%> <3.4%> <-3.9%> <-2.8%> <.5%> Ordinary income Profit before tax Net income (Rate: 1US$=) ( 14.4) ( 15.95) ( 1.74) ( 97.13) ( 95) ( 95) ( 1EURO=) ( ) ( ) ( ) ( ) ( 125) ( 125) 4

6 Quarterly Business Performance 25 (1 Million) 2 1,915 1,918 Sales ,532 1,111 1, Q 2Q 3Q 4Q 1.3 1Q (1 Million) 25 Opertaing income Ordinary income 8.% 7.% Net income Operating income margin /3 期 1Q 133 2Q 127 3Q 3.% 4Q 9/3 期 1Q 2Q % % /3 1Q 2Q 3Q 4Q 1/3 1Q 1US$= EURO=

7 6 ( 1 Million) 9/3 1/3 Total Results by Business Segment Q1 1st half Q1 Increase/ decrease YOY % 1st half (Forecast) (Forecast) Sales 1,915 3,833 6,476 1, % 2,5 5,5 Operating income % 8.% 7.5% 3.4% -3.9% -2.8%.5% Industrial machinery bearings Sales 67 1,217 2, % 85 1,85 Operating income % 13.5% 13.3% 9.3% -3.% 4.1% 7.% Automotive products Sales 1,8 2,141 3, % 1,4 3,1 Operating income % 5.7% 5.1% 1.9%.% -1.4% 1.1% Precision machinery & parts Sales Operating income Sales % Operating income % 9.4% 9.6%.9% -29.% -3.% -18.6% Others Sales % Operating income % 6.7% 5.9% 1.6% -9.3% -8.3% -5.4% Eliminations (sales) Eliminations/corporate

8 Results by Business Segment -Industrial Machinery Bearings ( 1 Million) Sales ( 1 Million) Operating income/margin % 13.1% % % -3.% /3 1Q 2Q 3Q 4Q 1/3 1Q Global demand from machine tool, industrial machinery and constructing machine manufacturers remained stagnant due to sluggish capital investment and continued inventory adjustment. In the aftermarket sector, sales for r Q1 decreased by 42.2% YOY due to inventory adjustment by distribution networks, despite continued sales expansion measures including expansion of sales channels in emerging markets. Although net sales decreased due to a delay in demand recovery, operating loss shrank compared to FY28:Q4. Although reduction of external procurement costs, profitability improvement countermeasures and an increase in sales price contributed d positively to results, operating income decreased by 9.2 billion YOY due to volume reduction and the appreciation of Japanese yen. Compared to FY28:Q4, operating loss shrank k due to cost reduction above and reduced depreciation and amortization by decreased capital investment and weaker Japanese yen. -5 9/3 1Q 2Q 3Q 4Q 1/3 1Q

9 Results by Business Segment -Automotive Products 14 Sales ( 1 Million) ( 1 Million) 1 Operating income/margin ,8 1, % % % % % /3 1Q 2Q 3Q 4Q 1/3 1Q 9/3 1Q 2Q 3Q 4Q 1/3 1Q 8 Inventory adjustment by automakers has come almost full circle and a stimulus policies implemented by governments around the world also contributed to increased automobile production compared to FY28:4Q. However, global demand from automakers akers remained stagnant. As a result, operating income decreased by 34.5% YOY. Although reduction of external procurement costs and profitability improvement countermeasures contributed positively to results, operating income decreased by 6.1 billion YOY due to volume reduction, the appreciation of Japanese yen and a decline in sales price. However, profitability improved substantially ly due to cost reduction above and reduced depreciation and amortization by shrunk capital investment.

10 Results by Business Segment -Precision Machinery and Parts ( 1 Million) ( 1 Million) % 15 Sales 19 Operating income/margin % -2.6% % -29.% Although increased capital investment in Japan contributed to an increase in sales of exposure equipment for LCD panel production, demand from machine tool, semiconductor production makers and liquid crystal production equipment and injection molding machine manufacturers remained sluggish. As a result, sales for Q1 decreased by 58.% YOY. The effect of reduced sales of exposure equipment for LCD panel production was substantial compared to 4Q last year while orders of linear-motion and mechatoronic products are increasing gradually. Although profitability improvement countermeasures contributed positively p to results, operating income for Q1 decreased by 3.2 billion YOY due to a lower sales volume of linear-motion and mechatronic products. However, operating loss shrank compared to Fy28:Q4 by profitability improvement countermeasures and d optimizing product mix. -3 9/3 1Q 2Q 3Q 4Q 1/3 1Q 9/3 1Q 2Q 3Q 4Q 1/3 1Q

11 Results by Geographical Segment ( 1 million) 9/3 1/3 Total Japan Sales Eliminations/ corporate 1 Q1 1st half Q1 Increase/ decrease YOY % 1st half (Forecast) (Forecast) Sales 1,915 3,833 6,476 1, % 2,5 5,5 Operating income % 8.% 7.5% 3.4% -3.9% -2.8%.5% Sales 1,386 2,815 4, % 1,83 3,98 Operating income % 6.4% 5.8% 1.4% -5.2% -2.7%.1% Americas Sales % 3 69 Operating income % 3.2% 4.4% 1.2% -3.2% -3.3%.7% Europe Sales , % Operating income % 5 2 % 9.4% 8.5% 8.2% 6.2% 1.1% 2.2% Asia Sales , % Operating income income % 15 6 % 1.9% 11.% 8.8% 1.8% 3.6% 6.5% Eliminations (sales) , ,

12 Results by Geographical Segment Japan Left:Sales Right:Operating income :Margin The Americas Operating income decreased YOY due to volume reduction and Although operating income decreased by 1.3 billion YOY due the appreciation of the Japanese yen, compared to FY28:Q4, to volume reduction caused by sluggish demand from profitability improvement countermeasures, reduction of automakers in North America and industrial machinery external procurement costs and reduced depreciation and manufacturers, inventory adjustment by automakers amortization and weaker Japanese yen contributed to decreased ( 1 Million) progressed and increased sales contributed to shrunk operating loss. ( 1 Million) operating loss ( 1 Million) 1,386 1,429 ( 1 Million) 1, /3 1Q 2Q 3Q -15 4Q 1/3 1Q 9/3 1Q 2Q 3Q 4Q 1/3 1Q Europe Asia Due to volume reduction, operating income decreased by Operating income decreased by 2.9 billion YOY due to volume 2.1 billion YOY, although profitability improvement reduction in sales to automobile and industrial machinery countermeasures and reduced depreciation and amortization manufacturers in China, South Korea and ASEAN regions. positively impacted results compared to FY28:Q4. However, It-related sales and increased sales to automakers in ASEAN regions contributed to results compared to FY28:Q4. ( 1 Million) ( 1 Million) ( 1 Million) ( 1 Million) /3 1Q 2Q 3Q 4Q 1/3 1Q 9/3 1Q 2Q 3Q 4Q 1/3 1Q

13 Results by Customer Location ( 1 Million) 9/3 1/3 Q1 1st half Q1 Increase/ decrease YOY % 1st half (Forecast) (Forecast) Sales 1,915 3,833 6,476 1, % 2,5 5,5 Japan 955 1,929 3, % 1,24 2,71 Non-Japan 96 1,94 3, % 1,26 2,79 (Ratio of non-japan sales to consolidated net sales to consolidated net sales) (5.1%) (49.7%) (5.1%) (51.3%) (5.4%) (5.7%) The Americas % 3 69 Europe , % Asia , % 53 1,17 12

14 Results by Customer Location 2,5 2, 1,5 1, 13 ( 1 million) Japan Europe 1,915 1, , Net sales by customer location Quarterly business performance The Americas Asia 1,111 1, /3 1Q 2Q 3Q 4Q 1/3 1Q Asia: : Although sales to automobile and IT-related sectors entered a recovery phase compared to FY28:Q4, reduced sales of exposure equipment for LCD panel production negatively affected the results. Europe:Although sales for industrial machinery manufacturers decreased due to a delay in demand recovery, sales to automakers increased compared to FY28:Q4, due to favorable stimulus policies. The Americas: : Sales to industrial machinery manufacturers and the aftermarket sector in North and Latin America were stagnant. However, sales to automakers in North America increased compared to FY28:Q4 due to progressed inventory adjustment. Japan:Sales to the railway sector were robust, while sales to machine tool, construction machinery and general industrial machinery manufacturers remained stagnant. Although sales of linear-motion and mechatoronic products were sluggish, the orders are increasing gradually. Sales of automakers increased compared to FY28:Q4, due to favorable stimulus policies and inventory adjustment.

15 Consolidated Balance Sheet ( 1 Million) 8,52 Assets Non-current assets Current assets ( 1 Million) Change from 4Q Liabilities and net assets Net assets Current liabilities 8,52 Non-current liabilities Ratio of net worth to total capital Change from 4Q 4,154 7,442 7,583 3,696 3, ,911 7,442 7,583 2,13 2, ,5 34.6% 2, % 2, % -97 4,366 3,746 3, ,19 2,488 2, /3 End of 1Q 9/3 End of 4Q 1/3 End of 1Q /3 End of 1Q 9/3 End of 4Q 1/3 End of 1Q Exchange rate: upper=us$ lower= EURO Exchange rate: upper=us$ lower=euro

16 Inventories Interest-bearing Debt Inventories Interesting-bearing debt (times) Japan The Americas Inventory turnover 7.1 Asia Europe Japan Non-Japan Net D/E ratio (times).55 3,232 3,244 ( 1 Million) 1, , , ( 1 Million) 2, , , , /3 End of 1Q 9/3 End of 4Q 1/3 End of 1Q 9/3 End of 1Q 9/3 End of 4Q 1/3 End of 1Q

17 Capital Expenditure, Depreciation ( 1 Million) ( 1 Million) 7 Japan 55 Americas 5 Europe 11 Asia '9/3 Capital Expenditure Japan 245 Americas 22 Europe 35 Asia Japan 22 Americas 3 Europe 1 Asia Depreciation Japan 115 Americas 12 Europe 13 '1/3 Asia 6 Plan 2 1Q *Excluding intangible assets Japan 55 Non-Japan 35 Japan 249 Non-Japan 136 Plan Japan 56 Non-Japan Q *Excluding intangible assets 16 '9/3 '1/3

18 Topics 17

19 Acceleration of Restructuring Global Production Sites Bearings Global:Reduce costs by manufacturing in best location Japan:Enhance manufacturing capability for roller bearings Japan NSK FUKUSHIMA CO., LTD. USA Clarinda Plant UK Peterlee Plant Japan NSK NEEDLE BEARING Ltd. Precision Machinery and Parts Improve productivity through restructuring global production sites Japan Domestic restructuring NSK PRECISION CO., LTD. NSK KYUSHU CO., LTD. small-sized bearings normal-sized bearings automotive bearings tappet roller bearings Transfer some product types Indonesia NSK Indonesia China Kunshan NSK Japan Ishibe Plant China Changshu NSK Expand into emerging markets China Establishment of a new subsidiary in China Roller bearings: main plant Fujisawa Plant Automotive Components Enhance productivity by restructuring European production sites Restructuring of production for our European Steering Business UK Peterlee Steering Plant Plant Closure Transfer some roller bearing types Concentra tion of production Saitama Plant NSK FUKUSHIMA CO., LTD. Polska Walbrzych Plant 18 Improve productivity through organization and concentration of global production sites

20 Establishment of Precision Machinery and Parts Subsidiary in China Company Profile Shengyang Company Name :Shenyang NSK Precision Co., Ltd. Location:Shenyang City, Liaoning Province, China Capital:$35 million (approximately 3.5 billion) Equity investment ratio:nsk(1%) Outline of Business :sales and manufacture of precision machinery and parts Start of Operations:April 21(provisional) Objective: - Expand sales expansion activities in China, emerging markets - Build foundation of global supply chain - Improve competitiveness and profitability Rendering of new factory in China 19

21 Supplementary Information Research & Development, Employees ( 1 Million) 9/3 1/3 Research & development Q1 Q2 Q3 Q4 Q1 (Plan) (No. of employees) 9/3 1/3 Q1 Q2 Q3 Q4 Q1 Employees 25,836 26,24 25,46 24,5 23,823 Japan 11,27 11,234 11,242 11,155 11,491 The Americas 3,44 3,4 2,77 2,38 2,326 Europe 4,277 4,372 3,954 3,542 3,235 Asia 7,245 7,414 7,53 7,45 6,771 2

22 Supplementary Information Forecasts by Business Segment ( 1 Million) 9/3 1/3 1st half 2nd half 1st half <Forecast> 2nd half <Forecast> <Forecast> Increase/ decrease YOY Sales 3,833 2,643 6,476 2,5 3, 5,5-976 Industrial machinery bearings 1, , , 1, Automotive products 2,141 1,384 3,525 1,4 1,7 3,1-425 Automotive bearings 1, , ,71-19 Automotive components , , Precision machinery & parts Others Eliminations Operating income 286 <7.5%> -65 <-2.5%> 221 <3.4%> -7 <-2.8%> 1 <3.3%> 3 <.5%> -191 Industrial machinery bearings 162 <13.3%> 33 <3.7%> 195 <9.3%> 35 <4.1%> 95 <9.5%> 13 <7.%> -65 Automotive products 18 <5.1%> -4 <-2.9%> 68 <1.9%> -2 <-1.4%> 55 <3.2%> 35 <1.1%> -33 Precision machinery & parts 3 <9.6%> -25 <-9.5%> 5 <.9%> -45 <-3.%> -2 <-1.%> -65 <-18.6%> -7 Others 18 <5.9%> -1 <-4.5%> 8 <1.6%> -15 <-8.3%> -5 <-2.6%> -2 <-5.4%> -28 Eliminations/ Corporation