NSK REPORT 2017
Year ended March 31, 2017
Integrated Report
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NSK used environmentally friendly paper and printing methods for this publication.
CAT. No. E8410 2017 AX-10 Printed in Japan ©NSK Ltd. 2017
Mission Statement
Management Principles
Action Guidelines
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.
1 To provide our customers with innovative and responsive
solutions through our world leading technologies.
2 To provide challenges and opportunities to our employees,
utilizing their skills and encouraging their creativity and
individuality.
3 To identify the needs of the present and future, and to meet
these needs by being flexible, agile, and dynamic.
Beyond Limits, Beyond Today
Beyond Frontiers
Adopting a global perspective in all aspects of
NSK's operations.
Beyond Individuals
Accomplishing and growing beyond personal ideas.
Beyond Imagination
Transcending conventional ideas and adopting
a flexible and inquisitive approach to exceed
present limitations.
4 To contribute to the communities in which we operate.
Beyond Perceptions Welcoming change and encouraging creative
5 To manage our business from an international perspective
and to develop a strong presence throughout the world.
synergies.
Challenging the Future Looking beyond the short term and accepting
the challenge of new opportunities.
CONTENTS
The Complete Picture of NSK
01
02
04
06
10
14
Mission Statement
The Pioneering Spirit that Has Endured
Throughout the 100 Years of NSK
NSK’s Business
Corporate Value Creation Model
NSK’s Business Activities and Corporate Value Creation
Financial and Non-Financial Highlights
Creating Corporate Value (Growth Strategies)
18
24
26
To Our Stakeholders
Looking Back on Past Mid-Term Management Plans
The Fifth Mid-Term Management Plan
Corporate Value Results
28
32
Review of Operations
28 Industrial Machinery Business
30 Automotive Business
Financial Strategy / Policy on Shareholder Returns
The Underlying Strength of Corporate Value
34
38
42
58
Fundamental Technologies and R&D
Global Business Platform
CSR / ESG Management
Management
Data Section
60
64
66
68
70
72
Consolidated Financial Statements
Analysis of Business Results for the Year Ended March 31, 2017
Basic Knowledge of Bearings
Glossary
NSK Group
Information for Investors / Company Data
73 Third-Party Assurances
NSK Report 2017 Editorial Policy
The NSK Report 2017, which provides a complete picture of the Company together with the story and results of efforts to
create corporate value as well as a comprehensive account of NSK’s underlying strengths, is designed to provide all
stakeholders with a deeper understanding of the Company. This Report provides a concise summary of all information
deemed important in the Group’s efforts to create corporate value. For more detailed information about the NSK Group’s
products, business activities, and financials, we ask that you refer to the Company’s website. Detailed information about
NSK’s approach to and initiatives in corporate social responsibility (CSR) can be found in the CSR section of our website and
in our CSR Report. In putting together this Report, we referred to the International Integrated Reporting Framework of the
International Integrated Reporting Council (IIRC).
Disclaimer
Statements made in this integrated report with respect to plans, strategies and future performance that are not historical
facts are forward-looking statements. NSK cautions that a number of factors could cause actual results to differ materially
from those discussed in forward-looking statements.
This document is an English translation of NSK Report 2017 dated September 1, 2017, that was originally prepared in
the Japanese language, and it is provided for convenience purposes only. Therefore, this document does not include any
event that has occurred, or has been found to have occurred, on or after September 1, 2017. NSK makes no representation
or warranty that this document is a complete or accurate translation of the original Japanese text, and it is not intended to be
relied upon. In the event that there is a discrepancy between the Japanese and English versions, the Japanese version shall
prevail. This document is not intended and should not be construed as an inducement to purchase or sell stock in NSK.
Mission
Statement
Management Principles /
Action Guidelines
NSK Vision 2026
SETTING THE FUTURE IN MOTION
We bring motion to life,
to enrich lifestyles,
and to build a brighter future.
Dedicated to uncovering society's needs,
we set ideas in motion,
to deliver solutions beyond imagination.
We're NSK.
And, we're setting the future in motion.
NSK REPORT 2017
01
CONTENTS
The Complete Picture of NSK
Mission Statement
The Pioneering Spirit that Has Endured
Throughout the 100 Years of NSK
NSK’s Business
Corporate Value Creation Model
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
NSK’s Business Activities and Corporate Value Creation
Financial and Non-Financial Highlights
working across national boundaries to
improve relationships between people
throughout the world.
01
02
04
06
10
14
18
24
26
34
38
42
58
60
64
66
68
70
72
Creating Corporate Value (Growth Strategies)
To Our Stakeholders
Looking Back on Past Mid-Term Management Plans
The Fifth Mid-Term Management Plan
Corporate Value Results
28
Review of Operations
28 Industrial Machinery Business
30 Automotive Business
32
Financial Strategy / Policy on Shareholder Returns
The Underlying Strength of Corporate Value
Fundamental Technologies and R&D
Global Business Platform
CSR / ESG Management
Management
Data Section
Consolidated Financial Statements
Analysis of Business Results for the Year Ended March 31, 2017
Basic Knowledge of Bearings
Glossary
NSK Group
Information for Investors / Company Data
73 Third-Party Assurances
NSK Report 2017 Editorial Policy
The NSK Report 2017, which provides a complete picture of the Company together with the story and results of efforts to
create corporate value as well as a comprehensive account of NSK’s underlying strengths, is designed to provide all
stakeholders with a deeper understanding of the Company. This Report provides a concise summary of all information
deemed important in the Group’s efforts to create corporate value. For more detailed information about the NSK Group’s
products, business activities, and financials, we ask that you refer to the Company’s website. Detailed information about
NSK’s approach to and initiatives in corporate social responsibility (CSR) can be found in the CSR section of our website and
in our CSR Report. In putting together this Report, we referred to the International Integrated Reporting Framework of the
International Integrated Reporting Council (IIRC).
Disclaimer
Statements made in this integrated report with respect to plans, strategies and future performance that are not historical
facts are forward-looking statements. NSK cautions that a number of factors could cause actual results to differ materially
from those discussed in forward-looking statements.
This document is an English translation of NSK Report 2017 dated September 1, 2017, that was originally prepared in
the Japanese language, and it is provided for convenience purposes only. Therefore, this document does not include any
event that has occurred, or has been found to have occurred, on or after September 1, 2017. NSK makes no representation
or warranty that this document is a complete or accurate translation of the original Japanese text, and it is not intended to be
relied upon. In the event that there is a discrepancy between the Japanese and English versions, the Japanese version shall
prevail. This document is not intended and should not be construed as an inducement to purchase or sell stock in NSK.
Mission Statement
Management Principles
Action Guidelines
1 To provide our customers with innovative and responsive
solutions through our world leading technologies.
2 To provide challenges and opportunities to our employees,
utilizing their skills and encouraging their creativity and
individuality.
3 To identify the needs of the present and future, and to meet
these needs by being flexible, agile, and dynamic.
Beyond Limits, Beyond Today
Beyond Frontiers
Adopting a global perspective in all aspects of
NSK's operations.
Beyond Individuals
Accomplishing and growing beyond personal ideas.
Beyond Imagination
Transcending conventional ideas and adopting
a flexible and inquisitive approach to exceed
present limitations.
4 To contribute to the communities in which we operate.
Beyond Perceptions Welcoming change and encouraging creative
5 To manage our business from an international perspective
and to develop a strong presence throughout the world.
synergies.
Challenging the Future Looking beyond the short term and accepting
the challenge of new opportunities.
Mission
Statement
Management Principles /
Action Guidelines
NSK Vision 2026
SETTING THE FUTURE IN MOTION
We bring motion to life,
to enrich lifestyles,
and to build a brighter future.
Dedicated to uncovering society's needs,
we set ideas in motion,
to deliver solutions beyond imagination.
We're NSK.
And, we're setting the future in motion.
NSK REPORT 2017
01
The Complete Picture of NSK
The Pioneering Spirit that Has Endured Throughout the 100 Years of NSK
In 1916, NSK was established as Japan’s first manufacturer of bearings in Osaki-cho, Ebara-gun, Tokyo (the
site of its current headquarters: today Osaki, Shinagawa-ku, Tokyo). In the 100 years since, the Company has
developed an array of innovative technologies, contributed to the reduction of energy loss, and underpinned
the development of industry worldwide through its expansion in overseas operations.
While the wording used has evolved to match the times, the spirit that has supported NSK’s from its
founding to the present day is its consistent stance of “contributing to society through technology.”
I want to produce bearings domestically to raise the standard of
Japanese manufacturing and bring the country in line with advanced nations.
1916
The Vision of Founder Takehiko Yamaguchi
Having graduated from the Tokyo Vocational School (now the Tokyo Institute of
Technology), Takehiko Yamaguchi joined the Ministry of Agriculture and Commerce
where, as an assistant examiner for the Japan Patent Office, he was responsible for
machinery inspections and wanted to see the advanced machinery industries in
advanced countries, such as the United States and those in Europe. At around that time,
through the recommendation of an acquaintance, Korekiyo Takahashi, who would later
become Prime Minister, Yamaguchi joined the Yasuda Bank owned by Zenjiro Yasuda,
who was trying to start up a business manufacturing nails, and set off on a tour of
Europe and the United States to conduct a technical research survey on Western nails
and the purchase of state-of-the-art equipment. During his inspections of factories in
each country, from the United States to the United Kingdom, Belgium, Germany and
France, Yamaguchi became keenly aware of the gap in the level of technology between
the Japanese machinery industry and that of Western nations.
After returning to Japan, Yamaguchi worked as chief engineer at Yasuda’s nail
manufacturing works before moving to an executive position at a Yasuda Bank–affiliated
company, where he cultivated his entrepreneurial spirit and strove to develop Japan’s
precision machinery industry. He established Yamatake Shokai Co., Ltd., which primarily
imported and sold machine tools and measuring instruments, and Nippon Sanso
Limited Partnership Company, aiming to capitalize on imported machinery to enter the
oxygen welding business.
Along with screws and gears,
the rolling bearings that support the
rotating shafts of machines are the
vital parts referred to as the three
major machine elements, and modern
bearing manufacturing companies had
been established in Europe and the
United States in the latter half of the
1880s. One after the other, companies
such as New Departure Manufacturing
Company (1889), Hyatt Roller Bearing
Company (1892) and The Timken
Replica bearings created based on the
oldest blueprints in existence at the Company.
Company (1899) in the United States, The Hoffmann Manufacturing Company in the
United Kingdom (1898) and SKF in Sweden (1907) commenced production. Of these, the
first bearings introduced to Japan were those made by SKF.
With a vision of advancing into the manufacture of precision machine tools,
Yamaguchi established Nippon Seiko Limited Partnership Company in 1914 with the aim
of selling “goods that have screws, various types of gears, general machinery tools and
other machine manufacturing.” At that time, only a small number of bearings were
imported for maintenance purposes, and the difficult research and trial production
process was started in conjunction with the Navy, which viewed bearings as an important
machine element. Driven by the strong desire to “develop domestically produced
bearings by all necessary means,” without adequate machinery and sufficient materials,
repeated trial and error finally led to the completion of Japan's first bearing in 1915.
On the back of this success, in 1916 Yamaguchi founded NSK Ltd. with the aim of
producing bearings in Japan.
Following the Footsteps of NSK
Founder Takehiko Yamaguchi through
to NSK’s Foundation (Brief Resumé)
1869 Born in Satsuma (now Kagoshima Prefecture)
1886 Moves to Tokyo and makes the acquaintance of
Korekiyo Takahashi, who provides him with a
variety of support
1891 Graduates from the Tokyo Vocational School
(now the Tokyo Institute of Technology), joins
the Ministry of Agriculture and Commerce with
responsibility for machinery inspections at the Japan Patent Office
1895 Joins Yasuda Bank
Departs on an inspection tour of Europe and the United States to conduct a
research survey of nail technologies and to purchase state-of-the-art machinery
1897 Returns to Japan, works as chief engineer for Zenjiro Yasuda’s nail
manufacturing works (now Yasuda Kogyo Co., Led.)
1906 Establishes Yamatake Shokai Co., Ltd. (now Azbil Corporation) to handle
the import and sales of types of machine tools and measuring instruments
1910 Establishes the oxygen manufacturing business Nippon Sanso Limited
Partnership Company (now Taiyo Nippon Sanso Corporation)
1914 Establishes Nippon Seiko Limited Partnership Company
1915 Perfects Japan’s first domestically produced bearings
1916 Founds NSK Ltd.
The Foresight in Declaring “Companies Exist to Serve Society”
1962
Company Creed―the NSK Spirit
Taking office as NSK’s fourth president in 1948, Hiroki Imazato
promoted the rationalization and modernization of manufacturing
facilities, the expansion of bearing applications and the development of
new products other than bearings. At the same time, he worked to
strengthen and expand the Company’s domestic sales network and
export operations and brought about the expansion of its business
scope. Then, in 1962, Imazato established the Company Creed, a
summary of his key messages to NSK employees.
Imazato stated in writing that: “a company whose only goal is the
pursuit of profit, and who fails to fulfil their social responsibility, will
not survive.” This company creed, based on the previous “4S
Principles” that had been followed by employees at the time, served as
an employee code of conduct and a guideline for businesspeople. To
further instill this spirit, Imazato created and distributed a pamphlet
entitled “NSK Spirit: Living the Company Creed” to all employees.
02
NSK REPORT 2017
Company Creed―the NSK Spirit
Following NSK’s proud history, we shall:
1. Always remain sincere, humble, and act in a manner
worthy of industrialists.
2. Thus, we shall respect the role the company plays in
society, work tirelessly to innovate and improve, and
devote ourselves to refining technology.
The 4S Principles are to serve as a guideline to help
employees put the NSK Spirit into practice.
Speed
Service
Spirit
System
1991
Under the MOTION & CONTROL™ Banner
NSK Corporate Philosophy
On November 8, 1991, which marked the 75th anniversary of our founding,
we established and communicated the “NSK Corporate Philosophy” both
internally and externally. Over a two-year period, a committee of young
employees tasked with creating a more attractive NSK took reviewed the
company’s mission, raison d’être and business domains. Consisting of a
mission statement, management principles, action guidelines and a
corporate message, the NSK Corporate Philosophy represents the key
message that NSK communicates to society as well as a shared mindset
and action guidelines for all employees.
The mission statement defines the “spirit,” “direction” and “ideal
image” of NSK in the 21st century and outlines the management efforts, actions and manner
through which the company will contribute to society. We also
decided to summarize our mission statement, business domain
and ideal image as a catchphrase in our corporate message:
Responsive and Creative Motion & ControlTM. The thoughts
encapsulated in the Corporate Philosophy are indicated in the
words of Toshio Arata, who was NSK’s president at that time.
What kind of company is NSK aiming to become? What is
needed and how do you communicate so that NSK becomes
an excellent company that is loved and respected?
Compared to other Japanese companies, NSK has
expanded overseas from an early stage and worked to achieve
globalization by promoting the localization of production. We
can say with confidence and pride that these efforts in regional
communities are highly appreciated. NSK’s products are by no
means high profile in the eyes of the general public, yet they
are indispensable to modern industry. We contribute to society
by means of our technologies and the quality of our products.
This will continue to be the primary reason that NSK is needed
in any region on the planet. Developing and actively proposing
new technologies based on the precision technologies we have
cultivated in bearings is becoming an increasingly important
task. It is also necessary for each of us to extend our
respective strengths, challenge the possibilities, and create an
in-house environment that is filled with initiative and creativity.
NSK President Toshio Arata, November 1991
2016
Embarking on a New Chapter of Evolution toward the Next 100 Years
NSK Vision 2026: Setting the Future in Motion
mind-set.̶for example, in our mindset, behavior and
decision-making criteria. Although NSK’s products are not
Created in the build-up to November 8, 2016, the Company’s 100th
finished goods, we are connected with society via the
anniversary, NSK Vision 2026 is a statement of what NSK will
manufacturers of machinery and equipment and the variety of
achieve in the 10 years through to 2026. NSK Vision 2026 also
finished products they produce.
indicates the state we should ideally attain over the mid- to
long-term to become a company that continues to contribute to
society and grow sustainably.
In order to become a world-leading corporation that
continues to provide high value to customers and society at a time
when the social and market environments continue to undergo
significant change, we must constantly generate originality and
value that only NSK can deliver.
Creating new products and
services will require thinking
not only about the markets that
we face and direct customer
requests but also about the
uses to which end users put
finished products and what
kinds of potential needs they
have. The vision puts this
Setting the Future in Motion means shifting from our previous
passive, reactive way of thinking and approach to a more proactive
mindset into words.
NSK’s
Corporate
Philosophy
Action Guidelines
NSK Vision 2026
Foundation Underpinning the NSK Spirit
Four Core Technologies
Since successfully developing the first bearings in Japan in 1915,
fueled by a desire to catch up to European and U.S. technology, the
spirit of pushing the boundaries of NSK’s technologies has been
passed down to successive generations. With a vision of creating a
world-class center for bearing research, we established a Technology
Center in Fujisawa in 1961. Provided with an anechoic chamber, a
sound-insulated laboratory, dust-free rooms (clean rooms), a
precision measuring room with constant temperature and humidity, a
chemical analysis room and a lubricant laboratory, we established an
R&D system that enables consistent research and testing, from basic
research on bearing performance to new product development. In
2002, we defined tribology, materials, numerical simulation and
mechatronics as our four core technologies. We clarified the technical
areas that underpin the development of NSK’s high-quality products
and regard them as the foundation for technologies and services that
will realize sustainable growth.
Global Business Foundation (Overseas Expansion Capabilities)
Currently, NSK has 151 overseas bases, including 43 plants, 88 sales
offices and nine technology centers. As a Japanese manufacturer, we
have promoted global expansion from an early stage. The bearings,
precision machinery and parts, as well as automobile parts,
manufactured by NSK are not finished goods for which the production
equipment can be easily transferred. Each stage, from the
establishment of overseas plants in the early 1970s to the securing of
production capabilities in line with the overseas deployment of
Japanese companies in the latter half of the 1980s and the plant
expansion in emerging markets that has been undertaken since the
1990s, was based on the philosophy of acting as a company that
benefits the communities into which we enter. In addition to becoming
a member of the local community and prioritizing contribution to the
development of industries and employment in all countries and
regions in which we operate, we are working to expand business to
local customers while promoting the local procurement of raw
materials and parts, as well as the localization of management.
CSR/ESG Management
As evident in Company Creed―the NSK Spirit as well as the NSK
Corporate Philosophy―both established before terms such as CSR or
ESG were ingrained, our philosophy has long called for involvement
with and contribution to society. On the environmental front, we
established the Environment Control Department in 1975, which was
subsequently expanded into the Global Environment Department in
2007. We introduced Neco, our own environmental efficiency index, in
fiscal 2008 to quantitatively control the environmental contribution of
bearings and other NSK products that primarily contribute to lower
environmental impact. Meanwhile, in order to contribute to society,
we established the NSK Foundation for the Advancement of
Mechatronics and started awarding research grants in 1988. With
regard to the next generation, which we regard as important
stakeholders, we have sponsored the Science Museum since its
opening in 1964 and continue to hold children’s science classes. As
for governance, we have consistently been among the Japan’s
frontrunners, having first invited independent directors to our Board
and establishing non-mandatory committees in 1999 before shifting
to a Company with Three Committees structure in 2004.
NSK REPORT 2017
03
The Complete Picture of NSK
The Pioneering Spirit that Has Endured Throughout the 100 Years of NSK
In 1916, NSK was established as Japan’s first manufacturer of bearings in Osaki-cho, Ebara-gun, Tokyo (the
site of its current headquarters: today Osaki, Shinagawa-ku, Tokyo). In the 100 years since, the Company has
developed an array of innovative technologies, contributed to the reduction of energy loss, and underpinned
the development of industry worldwide through its expansion in overseas operations.
While the wording used has evolved to match the times, the spirit that has supported NSK’s from its
founding to the present day is its consistent stance of “contributing to society through technology.”
1916
I want to produce bearings domestically to raise the standard of
Japanese manufacturing and bring the country in line with advanced nations.
The Vision of Founder Takehiko Yamaguchi
Company (1899) in the United States, The Hoffmann Manufacturing Company in the
United Kingdom (1898) and SKF in Sweden (1907) commenced production. Of these, the
Having graduated from the Tokyo Vocational School (now the Tokyo Institute of
first bearings introduced to Japan were those made by SKF.
Technology), Takehiko Yamaguchi joined the Ministry of Agriculture and Commerce
With a vision of advancing into the manufacture of precision machine tools,
where, as an assistant examiner for the Japan Patent Office, he was responsible for
Yamaguchi established Nippon Seiko Limited Partnership Company in 1914 with the aim
machinery inspections and wanted to see the advanced machinery industries in
of selling “goods that have screws, various types of gears, general machinery tools and
advanced countries, such as the United States and those in Europe. At around that time,
other machine manufacturing.” At that time, only a small number of bearings were
through the recommendation of an acquaintance, Korekiyo Takahashi, who would later
imported for maintenance purposes, and the difficult research and trial production
become Prime Minister, Yamaguchi joined the Yasuda Bank owned by Zenjiro Yasuda,
process was started in conjunction with the Navy, which viewed bearings as an important
who was trying to start up a business manufacturing nails, and set off on a tour of
machine element. Driven by the strong desire to “develop domestically produced
Europe and the United States to conduct a technical research survey on Western nails
bearings by all necessary means,” without adequate machinery and sufficient materials,
and the purchase of state-of-the-art equipment. During his inspections of factories in
repeated trial and error finally led to the completion of Japan's first bearing in 1915.
each country, from the United States to the United Kingdom, Belgium, Germany and
On the back of this success, in 1916 Yamaguchi founded NSK Ltd. with the aim of
France, Yamaguchi became keenly aware of the gap in the level of technology between
producing bearings in Japan.
the Japanese machinery industry and that of Western nations.
After returning to Japan, Yamaguchi worked as chief engineer at Yasuda’s nail
manufacturing works before moving to an executive position at a Yasuda Bank–affiliated
company, where he cultivated his entrepreneurial spirit and strove to develop Japan’s
precision machinery industry. He established Yamatake Shokai Co., Ltd., which primarily
imported and sold machine tools and measuring instruments, and Nippon Sanso
Limited Partnership Company, aiming to capitalize on imported machinery to enter the
oxygen welding business.
Following the Footsteps of NSK
Founder Takehiko Yamaguchi through
to NSK’s Foundation (Brief Resumé)
1869 Born in Satsuma (now Kagoshima Prefecture)
1886 Moves to Tokyo and makes the acquaintance of
Korekiyo Takahashi, who provides him with a
variety of support
1891 Graduates from the Tokyo Vocational School
(now the Tokyo Institute of Technology), joins
the Ministry of Agriculture and Commerce with
responsibility for machinery inspections at the Japan Patent Office
1895 Joins Yasuda Bank
Departs on an inspection tour of Europe and the United States to conduct a
research survey of nail technologies and to purchase state-of-the-art machinery
1897 Returns to Japan, works as chief engineer for Zenjiro Yasuda’s nail
manufacturing works (now Yasuda Kogyo Co., Led.)
1906 Establishes Yamatake Shokai Co., Ltd. (now Azbil Corporation) to handle
the import and sales of types of machine tools and measuring instruments
1910 Establishes the oxygen manufacturing business Nippon Sanso Limited
Partnership Company (now Taiyo Nippon Sanso Corporation)
1914 Establishes Nippon Seiko Limited Partnership Company
1915 Perfects Japan’s first domestically produced bearings
1916 Founds NSK Ltd.
Along with screws and gears,
the rolling bearings that support the
rotating shafts of machines are the
vital parts referred to as the three
major machine elements, and modern
bearing manufacturing companies had
been established in Europe and the
United States in the latter half of the
1880s. One after the other, companies
such as New Departure Manufacturing
Company (1889), Hyatt Roller Bearing
Company (1892) and The Timken
Replica bearings created based on the
oldest blueprints in existence at the Company.
The Foresight in Declaring “Companies Exist to Serve Society”
1962
Company Creed―the NSK Spirit
Taking office as NSK’s fourth president in 1948, Hiroki Imazato
promoted the rationalization and modernization of manufacturing
facilities, the expansion of bearing applications and the development of
new products other than bearings. At the same time, he worked to
strengthen and expand the Company’s domestic sales network and
export operations and brought about the expansion of its business
scope. Then, in 1962, Imazato established the Company Creed, a
summary of his key messages to NSK employees.
Imazato stated in writing that: “a company whose only goal is the
pursuit of profit, and who fails to fulfil their social responsibility, will
not survive.” This company creed, based on the previous “4S
Principles” that had been followed by employees at the time, served as
an employee code of conduct and a guideline for businesspeople. To
further instill this spirit, Imazato created and distributed a pamphlet
entitled “NSK Spirit: Living the Company Creed” to all employees.
02
NSK REPORT 2017
Company Creed―the NSK Spirit
Following NSK’s proud history, we shall:
1. Always remain sincere, humble, and act in a manner
worthy of industrialists.
2. Thus, we shall respect the role the company plays in
society, work tirelessly to innovate and improve, and
devote ourselves to refining technology.
The 4S Principles are to serve as a guideline to help
employees put the NSK Spirit into practice.
Speed
Service
Spirit
System
1991
Under the MOTION & CONTROL™ Banner
NSK Corporate Philosophy
On November 8, 1991, which marked the 75th anniversary of our founding,
we established and communicated the “NSK Corporate Philosophy” both
internally and externally. Over a two-year period, a committee of young
employees tasked with creating a more attractive NSK took reviewed the
company’s mission, raison d’être and business domains. Consisting of a
mission statement, management principles, action guidelines and a
corporate message, the NSK Corporate Philosophy represents the key
message that NSK communicates to society as well as a shared mindset
and action guidelines for all employees.
The mission statement defines the “spirit,” “direction” and “ideal
image” of NSK in the 21st century and outlines the management efforts, actions and manner
through which the company will contribute to society. We also
decided to summarize our mission statement, business domain
and ideal image as a catchphrase in our corporate message:
Responsive and Creative Motion & ControlTM. The thoughts
encapsulated in the Corporate Philosophy are indicated in the
words of Toshio Arata, who was NSK’s president at that time.
What kind of company is NSK aiming to become? What is
needed and how do you communicate so that NSK becomes
an excellent company that is loved and respected?
Compared to other Japanese companies, NSK has
expanded overseas from an early stage and worked to achieve
globalization by promoting the localization of production. We
can say with confidence and pride that these efforts in regional
communities are highly appreciated. NSK’s products are by no
means high profile in the eyes of the general public, yet they
are indispensable to modern industry. We contribute to society
by means of our technologies and the quality of our products.
This will continue to be the primary reason that NSK is needed
in any region on the planet. Developing and actively proposing
new technologies based on the precision technologies we have
cultivated in bearings is becoming an increasingly important
task. It is also necessary for each of us to extend our
respective strengths, challenge the possibilities, and create an
in-house environment that is filled with initiative and creativity.
NSK President Toshio Arata, November 1991
Embarking on a New Chapter of Evolution toward the Next 100 Years
2016
NSK Vision 2026: Setting the Future in Motion
Created in the build-up to November 8, 2016, the Company’s 100th
anniversary, NSK Vision 2026 is a statement of what NSK will
achieve in the 10 years through to 2026. NSK Vision 2026 also
indicates the state we should ideally attain over the mid- to
long-term to become a company that continues to contribute to
society and grow sustainably.
In order to become a world-leading corporation that
continues to provide high value to customers and society at a time
when the social and market environments continue to undergo
significant change, we must constantly generate originality and
value that only NSK can deliver.
Setting the Future in Motion means shifting from our previous
passive, reactive way of thinking and approach to a more proactive
mind-set.̶for example, in our mindset, behavior and
decision-making criteria. Although NSK’s products are not
finished goods, we are connected with society via the
manufacturers of machinery and equipment and the variety of
finished products they produce.
Creating new products and
services will require thinking
not only about the markets that
we face and direct customer
requests but also about the
uses to which end users put
finished products and what
kinds of potential needs they
have. The vision puts this
mindset into words.
NSK’s
Corporate
Philosophy
Action Guidelines
NSK Vision 2026
Foundation Underpinning the NSK Spirit
Four Core Technologies
Since successfully developing the first bearings in Japan in 1915,
fueled by a desire to catch up to European and U.S. technology, the
spirit of pushing the boundaries of NSK’s technologies has been
passed down to successive generations. With a vision of creating a
world-class center for bearing research, we established a Technology
Center in Fujisawa in 1961. Provided with an anechoic chamber, a
sound-insulated laboratory, dust-free rooms (clean rooms), a
precision measuring room with constant temperature and humidity, a
chemical analysis room and a lubricant laboratory, we established an
R&D system that enables consistent research and testing, from basic
research on bearing performance to new product development. In
2002, we defined tribology, materials, numerical simulation and
mechatronics as our four core technologies. We clarified the technical
areas that underpin the development of NSK’s high-quality products
and regard them as the foundation for technologies and services that
will realize sustainable growth.
Global Business Foundation (Overseas Expansion Capabilities)
Currently, NSK has 151 overseas bases, including 43 plants, 88 sales
offices and nine technology centers. As a Japanese manufacturer, we
have promoted global expansion from an early stage. The bearings,
precision machinery and parts, as well as automobile parts,
manufactured by NSK are not finished goods for which the production
equipment can be easily transferred. Each stage, from the
establishment of overseas plants in the early 1970s to the securing of
production capabilities in line with the overseas deployment of
Japanese companies in the latter half of the 1980s and the plant
expansion in emerging markets that has been undertaken since the
1990s, was based on the philosophy of acting as a company that
benefits the communities into which we enter. In addition to becoming
a member of the local community and prioritizing contribution to the
development of industries and employment in all countries and
regions in which we operate, we are working to expand business to
local customers while promoting the local procurement of raw
materials and parts, as well as the localization of management.
CSR/ESG Management
As evident in Company Creed―the NSK Spirit as well as the NSK
Corporate Philosophy―both established before terms such as CSR or
ESG were ingrained, our philosophy has long called for involvement
with and contribution to society. On the environmental front, we
established the Environment Control Department in 1975, which was
subsequently expanded into the Global Environment Department in
2007. We introduced Neco, our own environmental efficiency index, in
fiscal 2008 to quantitatively control the environmental contribution of
bearings and other NSK products that primarily contribute to lower
environmental impact. Meanwhile, in order to contribute to society,
we established the NSK Foundation for the Advancement of
Mechatronics and started awarding research grants in 1988. With
regard to the next generation, which we regard as important
stakeholders, we have sponsored the Science Museum since its
opening in 1964 and continue to hold children’s science classes. As
for governance, we have consistently been among the Japan’s
frontrunners, having first invited independent directors to our Board
and establishing non-mandatory committees in 1999 before shifting
to a Company with Three Committees structure in 2004.
NSK REPORT 2017
03
The Complete Picture of NSK
NSK’s Business
Industrial Machinery Business
Industrial Machinery Bearings
Precision Machinery and Parts
Aftermarket
(Maintenance)
38%
General Machinery
OEM
40%
Other
35%
Machine Tools and
Injection Molding Machines
35%
Net sales
￥184.3 billion
Net sales
￥42.7 billion
Electrical and
IT Equipment
22%
Semiconductor
and LCD Production
Equipment
30%
As a comprehensive bearing manufacturer, NSK
offers a varied lineup of miniature through to
extra-large products catering to needs across a
broad range of industries. The Company is working
to expand its business across three sectors: the
general machinery sector including steel, machine
tools, wind turbines and railways; the electrical and
IT equipment sector such as home appliances and
personal computers; and the aftermarket,
providing maintenance and repair services.
NSK helps to push forward new developments in a wide
range of advanced fields. Through the supply of machinery
parts including the ball screws and NSK Linear GuidesTM
that play an important role in linear motion products, and
such mechatronic products as XY Tables and MEGATORQUE
MOTORTM that employ ultra-high precision positioning as
well as controlling technologies, the Company provides
invaluable support in the production of machine tools,
injection molding machines, industrial robots,
semiconductor and LCD production equipment, conveying
machines and medical devices.
Double row cylindrical
roller bearings
High rigidity series
NSKHPSTM
Large spherical roller
bearings
Ball screw with X1 seals
MEGATORQUE MOTORTM
PS/PN Series
Other
3%
Industrial
Machinery
Bearings
19%
Other Asia
14%
Automotive Business
Automotive Bearings
Automotive Components
Other
52%
Hub Unit Bearings
Components
Steering Products
29%
18%
82%
Automatic Transmission
Japan
35%
Automotive
Components
39%
Net sales
￥328.0 billion
Net sales
￥368.3 billion
Precision Machinery
and Parts 4%
China
21%
Net Sales
(Year ended March 31, 2017)
9,49 .2billion
Europe
13%
The Americas
17%
Automotive
Bearings
35%
Bearing Net Sales (including
for industrial and automotive use)
Domestic
share No.1
Global
share No.3
*Certain industrial machinery business
automotive business in the fiscal year
operations were transferred to the
ended March 31, 2017.
Needle Roller Bearings
19%
Of the 100–150 units used in every type of automotive bearing said to go into each vehicle, as well
as the components that go into automatic transmissions, electric power steering (EPS) and
components for electric braking systems, and other products, NSK supplies critical function
components that support a car’s running, turning and stopping.
Automotive technological innovation today is moving forward at a dramatic speed, including
progress toward diversified power sources and autonomous driving. With its elemental
technologies accumulated to the present and new technological initiatives, NSK is contributing to
enhanced performance in such areas as automotive safety, comfort and the environment.
Running
Transmissions
Automotive
bearings
Automotive
components
In efficiently conveying engine power to the tires, critical to the
transmissions that need to operate smoothly and with flexibility
are the products of NSK. We engage in four core technologies,
namely tribology, materials, numerical simulation and
mechatronics, and offer products that enhance the
efficiency of transmissions, making them
increasingly compact and lightweight.
NSK Products: Playing a Key Role in an Array of Industries
NSK caters precisely to a variety of needs by ensuring that it is fully aware of the characteristics of customers’ industries
as well as usage environments and the different requirements of each country and region.
Machine Tools
Ball screw with X1 seals
High precision angular
contact ball bearings
Steel
Long-life, optimized cylindrical
roller bearings for continuous
casting machines
Mining and Construction Wind Turbines
NSKHPSTM
Spherical roller bearings
Full-complement cylindrical
roller bearings NNCF
(double row)
Industrial Motors
New ceramic coated insulating
bearings for industrial motors
Railways
Double-row tapered
roller bearings
for axles
Home Appliances
Ball bearings for
ultra-high-speed rotary
motors
Semiconductor Production Equipment
Pumps & Compressors
NSK Linear GuidesTM
NH Series, NS Series
NSKHPSTM
High load capacity
angular contact
ball bearings
Robots
Highly functional
thin-section angular
contact ball bearings
04
NSK REPORT 2017
NSK REPORT 2017
05
Needle roller bearings
for planetary gears
(cage and roller
assembly), Pinion shaft
Clutch assembly
optimized high
efficiency
Running
Hub unit bearings
Automotive
bearings
Hub unit bearings are
fundamental components
which support the chassis
while facilitating the rotation of
the wheels. They are exposed
to rainwater, mud, snow and
other elements, and under
such extreme environments,
realize excellent durability and
smooth rotation.
Double-row angular contact
ball bearings with inner and
outer mounting flange
(HUB III for driven wheels)
Stopping
Ball screws for electric brakes
Automotive
components
Along with the trend of making it mandatory to equip
vehicles with automatic emergency braking, there is
an increasing shift toward electrification at the point
of brake booster function. Within this “e-brake
booster” type there is the promising ball screw type.
NSK, putting to use its global No. 1 share of ball
screw technology, will continue to contribute to
raising the level of safety in the brake field.
Ball screws for
electric brakes
Turning
Electric power steering (EPS)
Automotive
components
Running
Power source/Electric components
Automotive
bearings
With the recent trend in advanced driving
assistance and autonomous driving,
electric power steering systems are
becoming increasingly important. In
addition to the primary column-type EPS,
the Company is making progress on the
development of a rack-type EPS that puts
to use NSK’s technological excellence.
This is contributing to a broad product
lineup and driving that is safe and comfortable.
Given that raising environmental
performance is pursued as a social
issue, there is an ongoing shift toward
automotive components electrification
of and a growing demand for bearings
to perform in new positions. NSK is
seeking growth by leveraging its
strengths in the electrical components
field where an ever-more sophisticated
level of technology is required.
Functional safety-compliant
electric power steering
Bearings for
alternators
Bearings for
in-vehicle motors
The Complete Picture of NSK
NSK’s Business
Industrial Machinery Business
Industrial Machinery Bearings
Precision Machinery and Parts
Aftermarket
(Maintenance)
38%
General Machinery
OEM
40%
Other
35%
Machine Tools and
Injection Molding Machines
35%
Net sales
￥184.3 billion
Net sales
￥42.7 billion
Electrical and
IT Equipment
22%
Semiconductor
and LCD Production
Equipment
30%
As a comprehensive bearing manufacturer, NSK
offers a varied lineup of miniature through to
extra-large products catering to needs across a
broad range of industries. The Company is working
to expand its business across three sectors: the
general machinery sector including steel, machine
tools, wind turbines and railways; the electrical and
IT equipment sector such as home appliances and
personal computers; and the aftermarket,
providing maintenance and repair services.
NSK helps to push forward new developments in a wide
range of advanced fields. Through the supply of machinery
parts including the ball screws and NSK Linear GuidesTM
that play an important role in linear motion products, and
such mechatronic products as XY Tables and MEGATORQUE
MOTORTM that employ ultra-high precision positioning as
well as controlling technologies, the Company provides
invaluable support in the production of machine tools,
injection molding machines, industrial robots,
semiconductor and LCD production equipment, conveying
machines and medical devices.
Double row cylindrical
NSKHPSTM
Ball screw with X1 seals
MEGATORQUE MOTORTM
roller bearings
High rigidity series
Large spherical roller
bearings
PS/PN Series
NSK Products: Playing a Key Role in an Array of Industries
NSK caters precisely to a variety of needs by ensuring that it is fully aware of the characteristics of customers’ industries
as well as usage environments and the different requirements of each country and region.
Machine Tools
Steel
Mining and Construction Wind Turbines
Industrial Motors
Ball screw with X1 seals
High precision angular
contact ball bearings
Long-life, optimized cylindrical
roller bearings for continuous
casting machines
NSKHPSTM
Spherical roller bearings
Full-complement cylindrical
roller bearings NNCF
New ceramic coated insulating
bearings for industrial motors
(double row)
Railways
Double-row tapered
roller bearings
for axles
Home Appliances
Semiconductor Production Equipment
Pumps & Compressors
Robots
Ball bearings for
ultra-high-speed rotary
motors
NSK Linear GuidesTM
NH Series, NS Series
NSKHPSTM
High load capacity
angular contact
ball bearings
Highly functional
thin-section angular
contact ball bearings
04
NSK REPORT 2017
Other
3%
Industrial
Machinery
Bearings
19%
Other Asia
14%
Automotive Business
Automotive Bearings
Automotive Components
Other
52%
Hub Unit Bearings
29%
Automatic Transmission
Components
18%
Steering Products
82%
Japan
35%
Automotive
Components
39%
Net sales
￥328.0 billion
Net sales
￥368.3 billion
Precision Machinery
and Parts 4%
China
21%
Net Sales
(Year ended March 31, 2017)
9,49 .2billion
Europe
13%
The Americas
17%
Automotive
Bearings
35%
Bearing Net Sales (including
for industrial and automotive use)
Domestic
share No.1
Global
share No.3
*Certain industrial machinery business
automotive business in the fiscal year
operations were transferred to the
ended March 31, 2017.
Needle Roller Bearings
19%
Of the 100–150 units used in every type of automotive bearing said to go into each vehicle, as well
as the components that go into automatic transmissions, electric power steering (EPS) and
components for electric braking systems, and other products, NSK supplies critical function
components that support a car’s running, turning and stopping.
Automotive technological innovation today is moving forward at a dramatic speed, including
progress toward diversified power sources and autonomous driving. With its elemental
technologies accumulated to the present and new technological initiatives, NSK is contributing to
enhanced performance in such areas as automotive safety, comfort and the environment.
Running
Transmissions
Automotive
bearings
Automotive
components
In efficiently conveying engine power to the tires, critical to the
transmissions that need to operate smoothly and with flexibility
are the products of NSK. We engage in four core technologies,
namely tribology, materials, numerical simulation and
mechatronics, and offer products that enhance the
efficiency of transmissions, making them
increasingly compact and lightweight.
Needle roller bearings
for planetary gears
(cage and roller
assembly), Pinion shaft
Clutch assembly
optimized high
efficiency
Running
Hub unit bearings
Automotive
bearings
Hub unit bearings are
fundamental components
which support the chassis
while facilitating the rotation of
the wheels. They are exposed
to rainwater, mud, snow and
other elements, and under
such extreme environments,
realize excellent durability and
smooth rotation.
Double-row angular contact
ball bearings with inner and
outer mounting flange
(HUB III for driven wheels)
Stopping
Ball screws for electric brakes
Automotive
components
Along with the trend of making it mandatory to equip
vehicles with automatic emergency braking, there is
an increasing shift toward electrification at the point
of brake booster function. Within this “e-brake
booster” type there is the promising ball screw type.
NSK, putting to use its global No. 1 share of ball
screw technology, will continue to contribute to
raising the level of safety in the brake field.
Ball screws for
electric brakes
Turning
Electric power steering (EPS)
Automotive
components
Running
Power source/Electric components
Automotive
bearings
With the recent trend in advanced driving
assistance and autonomous driving,
electric power steering systems are
becoming increasingly important. In
addition to the primary column-type EPS,
the Company is making progress on the
development of a rack-type EPS that puts
to use NSK’s technological excellence.
This is contributing to a broad product
lineup and driving that is safe and comfortable.
Functional safety-compliant
electric power steering
Given that raising environmental
performance is pursued as a social
issue, there is an ongoing shift toward
automotive components electrification
of and a growing demand for bearings
to perform in new positions. NSK is
seeking growth by leveraging its
strengths in the electrical components
field where an ever-more sophisticated
level of technology is required.
Bearings for
alternators
Bearings for
in-vehicle motors
NSK REPORT 2017
05
Creating New Value
That Adds to Society
e N S K G r o up’s Stakeholders
h
T
Customers
Suppliers
Employees
Value Created
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Contribution to an advanced technological society
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Shareholders
and Investors
Local
Communities
Future
Generations
In its mission statement, NSK declares its aims of realizing the well-being
and safety of society, and contributing to the protection of the global
environment through its Motion & ControlTM technology.
NSK considers safety, quality and compliance as its top priorities and creates
new value that contributes to society through its operations, spanning
development to design, production, sales and aftermarket services.
NSK REPORT 2017
07
The Complete Picture of NSK
Corporate Value Creation Model
NSK Mission Statement
NSK Vision 2026
Social Issues
Well-Being and Safety of Society
Protection of the Global Environment
Diverse Capital and Inputs
NSK’s Value Creation Process (Business Model)
Output and Outcomes
Manufacturing Capital
Raw materials: Steel,
greases and oils, externally
procured components
Global production sites
Manufacturing facilities
Process set-ups, process
controls
Intellectual Capital
100 years of accumulated
know-how, four core
technologies,
knowledge/expertise in
specialist fields, R&D centers,
R&D framework linked to
external organizations
Human Capital
Highly qualified engineers,
skilled workforce, globally
minded talent, sales
personnel who maintain
close relationships with
customers, corporate
governance structure (Three
Committees system, global
compliance framework)
Financial Capital
Capital,
interest-bearing debt,
cash reserves
Social/Relationship Capital
Production sites (Plants)
Japan: 21
Overseas: 43
R&D centers
At 15 locations
in 10 countries
Ratio of new employees with
science backgrounds (annual
average over the past five years)
72.3％
Number of employees
worldwide
31,501
Employee development
expenditure per person
(non-consolidated)
Approx. ¥44,000
Total equity
¥485.0 billion
Interest-bearing debt
¥267.4 billion
Cash and cash equivalents
¥139.6 billion
Relationships of trust with
external parties (users,
suppliers, local communities),
globally recognized and
trusted NSK brand
Number of customer
inquiries to NSK salespeople
7,256 cases/year
Natural Capital
Minerals (iron ore, coal, etc.),
water, energy
Energy input (per year)
16,312 TJ
(As at March 31, 2017)
Business Foundation and Four Drivers
for Expansion and Enhancement
Sales ～ Feedback P.13
Conduct sales initiatives in line
with the type of business, such
as just-in-time, specific projects,
distributor inventory, etc., as well
as aftermarket sales for
maintenance needs.
Receive feedback from customers,
propose new technologies, revise
R&D portfolio.
Feedback
R&D
Sales/
Aftermarket
NSK’s
Business Activities
Receipt of
Orders
DRIVER
CSR/ESG
Management
P.42
Manufacturing
Safety
Quality
Compliance
Procurement
Mass
Production
Design/
Preparation
DRIVER
Global Business
Platform
Overseas Development
( )
Capabilities
P.38
DRIVER
Four Core
Technologies
P.34
DRIVER
The Fifth Mid-Term
Management Plan
P.26
Products/
Services
● Industrial Machinery Bearings
● Precision Machinery and Parts
● Automotive Bearings
● Automotive Components
● Maintenance & Repair,
Aftermarket Services
Financial
Outcomes from
Provision of
Added Value
● Cash generation
● Improvement in ROE
● Improvement in share
price/market capitalization
● Internal reserves for
investment in growth
● Maintenance of stable ratings
Impact on
Society/
Environment
● Reduction of investment
resource/energy usage through
improved production processes
● Promotion of human resource diversity
● Improvement of compliance awareness
● Compliance with varying regulations in
each country (e.g., avoiding use of conflict
minerals, UK Modern Slavery Act)
(Output as burden on the environment)
● Greenhouse gases (GHG),
industrial waste, water discharge
Share of bearings market
Ranked 3rd
in the world
Number of EPS mounted on
vehicles (cumulative total)
Approx. 75 million
Number of product press releases
21 releases/year
(24 in the previous fiscal year)
Cash flow from
operating activities
¥67.9 billion
Dividends/Payout ratio
¥20.2 billion/44.1％
Lost-worktime injury rate*
(global)
0.68
(0.70 in the previous fiscal year)
*For more information on lost-worktime
injury rate, please see p. 45.
Diversity (Global)
Proportion of female
employees 17.6％
(17.3% in the previous fiscal year)
Number of employees who
have attained a TOEIC
score of 730 or higher
507
(472 in the previous fiscal year)
Development of environmentally
friendly products
219 products
(cumulative total)
GHG emissions per production unit
10.2％ decrease (Japan)
(-8.4% in the previous fiscal year)
33.2％ decrease
(excluding Japan)
(-33.2% in the previous fiscal year)
*Rates of percentage increase and decrease
are presented compared with the base date
of the year ended March 31, 2012 (0%).
R&D
～ Receipt of Orders P.11
Engage in R&D in such topics as
basic research, advanced
development, application
development and manufacturing
engineering; development ～
receipt of orders for industrial
machinery bearings and precision
machinery and parts that fulfill
the needs of all industries;
development ～ receipt of orders
for automotive bearings and
automotive components
compatible with new automobiles
developed by the manufacturers
of finished vehicles. For
standardized products based on
international standards, develop
activities to win orders by, for
example, providing customers
with technical support.
P.12
Mass Production Design
～ Manufacturing
Undertake mass production design
and preparation depending on the
capital expenditure cycle and each
type of business cycle, such as new
product, maintenance and repair,
as well as new vehicles;
commence production following
procurement of raw materials and
components. Undertake repeated
production while constantly
increasing competitiveness
through improved quality, cost and
delivery times, including for
standard products.
Customers
Suppliers
Employees
Value Created
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Contribution to an advanced technological society
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Shareholders
and Investors
Local
Communities
Future
Generations
External Factors Affecting
Corporate Value Creation
Foreign Exchange Rate
Fluctuations
Exchange rate fluctuations affect revenue
as the ratio of net sales outside Japan to
total net sales is 65%, and the overseas
production ratio is 55%.
Short term
Resource Price Fluctuations
Economies/Economic Trends
Capital Expenditures
Competitive Environment
Changes in the prices for resources, such
as the steel and rare earths minerals that
are raw materials for NSK products, affect
revenue
Economic trends in each country and market affect
related demand. For example, the number of new
vehicles sold by finished vehicle manufacturers affects
Automotive Business revenue
Capital expenditure cycles affect the
sales of bearings and precision
products that are affected by demand
in a wide range of industrial sectors
Although barriers to entry into the equipment industry are
high, changes in the competitive environment for Japanese
and global manufacturers of bearings, precision products
and automotive components may affect revenues
Changes in Technological
Innovation and Industry Structure
The impact that automotive
technological innovation and IoT has on
the structure of industry will have direct
and indirect effects on NSK’s business
Long term
06
NSK REPORT 2017
NSK REPORT 2017
09
The Complete Picture of NSK
NSK’s Business Activities and Corporate Value Creation
Framework for NSK’s Business Activities
NSK engages in BtoB operations, where its direct customers are
automakers and machinery manufacturers, not end users.
NSK has two business segments, the Industrial Machinery Business and
the Automotive Business, reflecting the industries in which its customers
operate. The Industrial Machinery Business Division Headquarters and
the Automotive Business Division Headquarters oversee these
businesses on a global level.
(Please see “Organizations Supporting Global Management” on page 39.)
Each business division headquarters maintains its own production, sales
and technology units that take responsibility for the entire business value
chain, from marketing activities for order receipt to product design,
manufacturing, sales, delivery, payment collection and the aftermarket.
As shown in the chart on the right, NSK’s value chain creates value for its
customers through business activities encompassing research and
development, manufacturing, sales and feedback from customers.
Feedback
R&D
Sales/
Aftermarket
NSK’s
Business Activities
Receipt of
Orders
DRIVER
CSR/ESG
Management
Manufacturing
Safety
Quality
Compliance
Procurement
Mass
Production
Design/
Preparation
DRIVER
Global Business
Platform
Overseas Development
( )
Capabilities
DRIVER
Four Core
Technologies
DRIVER
The Fifth Mid-Term
Management Plan
Shared Features of the Industrial Machinery Business and the Automotive Business
① NSK’s products are components that enhance the
③ Demand conditions in the industries of its customers
performance of the customer machinery in which they are
incorporated. The product specifications and functional
requirements of our customers influence NSK’s products and
business activities.
② QCDDSM
Quality, Cost, Delivery, Development, Service and Management
play an important role in securing our competitive advantage.
influence NSK’s net sales and profits.
④ The ability to develop business on a worldwide scale
influences NSK’s competitiveness and growth potential.
⑤ The ability to propose technological solutions is key to
acquiring new projects.
⑥ In principle, products are manufactured once orders are
received rather than in anticipation
of orders.
Value Creation in Automatic Transmissions (ATs)
There are various types of automobile
transmissions, but AT is a transmission that
controls automobile acceleration and
deceleration by the switching of automatic
gears. Among them, the most frequently
adopted type of AT is called step AT. In
addition to bearing products, such as needle
bearings and tapered roller bearings, NSK
supplies a variety of products, such as clutch
assemblies and friction plates, as
components for use in ATs.
As environmental regulations are
becoming increasingly more stringent,
NSK’s R&D capabilities, sales responses,
design technologies, production capabilities
and service are assisting in its responses to
customer needs, which include its desire to
make AT units smaller and lighter, to control
friction and make AT units more fuel
efficient, and to realize improvements in fuel
economy and comfort through multistep ATs.
Background to NSK’s
AT Business Expansion
1
Expansion of automatic transmissions
in emerging markets (step AT and CVT)
FY2026 Demand Forecast
(compared with FY2015)
＋10 million units
2
Progress in shift to multistep AT
(multistep AT = seven or more speeds)
Multistep AT ratio:
FY2015 22％ ➡ FY2018 46％
3
Business expansion for
largest customers
New business acquisitions
by NSK’s customers
10
NSK REPORT 2017
AT for use on a front-engine, front wheel-drive (FF) automobile
Transmission Market Forecast (by type)
(Unit: Millions)
120
100
89
95
103 108 112
80
60
40
20
FCV
EV
HV
DCT
CVT
AT
MT/AMT
0
2015
(actual)
(NSK forecast)
2018
2021
2024
2026 (FY)
Manufacturing Capital
Intellectual Capital
Human Capital
Financial Capital
Social/Relationship Capital
Natural Capital
R&D～Receipt of Orders
R&D
Receipt of Orders
Our four core technologies are tribology, materials, numerical simulation
The independent sales divisions of the Industrial Machinery Business
and mechatronics (see page 34). In the field of R&D, NSK engages in
and Automotive Business coordinate with other internal departments
broad research and development that applies to both business segments,
to win new orders. The timing of orders received, lead times and
in addition to fundamental research, advanced development, application
other aspects of order-taking activities depend on the customer’s
development and production technologies. NSK’s R&D activities lead to
business, products and components used. For global products, the
the creation of new products, technologies and businesses.
sales divisions coordinate with the relevant sites in other countries.
Key Inputs
Our Strengths
● Technical staff (human capital)
● Experience and track record in QCDDSM
● Accumulated technologies, R&D centers (intellectual capital)
(manufacturing, intellectual and human capital)
● R&D structure with external parties (social/relationship capital)
● Strong relationships of trust with customers
● Financial foundation for funding R&D (financial capital), etc.
(social/relationship capital)
● Sales capabilities (human capital)
● NSK brand recognition (social/relationship capital), etc.
● Our excellence is in solving complex technological problems, based on our
● NSK has internal systems that support tight-knit
four core technologies and thanks to the breadth of our technical staff and
communications between customers and its engineering
accumulated technologies gained from deep knowledge and experience.
and sales staff.
● Based on our tight-knit relationships with customers, we can quickly
● NSK’s global development and supply capabilities also
obtain product- and technology-related needs and work on development.
help to win a variety of orders (e.g., orders for newly
● Collaborating and jointly developing products with its customers,
developed, improved, existing and standard products).
suppliers and external research institutions, NSK leverages those
● In the Automotive Business, Global Account Managers
efforts in product development (e.g., steel materials, grease,
(GAMs) and Key Account Managers (KAMs) work
motors, electronic control units [ECUs]).
● NSK has a global network of technology centers.
together on project requirements.
● NSK focuses on high-quality, environmentally friendly
● NSK has systematic education programs and educational institutions,
products that are trusted by customers.
including the NSK Institute of Technology (NIT), for the training and
strengthening of its technical staff. (Please see page 35 for more details.)
Contributing to Improvements in
Fuel Efficiency through Tribology,
Materials and Numerical Simulation
In an environment where further improvements in automobile fuel
efficiency are being demanded, the utilization of NSK’s tribology,
materials and numerical simulation is driving the development of
AT-related products. Improving fuel efficiency requires the
downsizing of bearing size and low torque, but making a bearing
smaller or thinner will generally reduce its durability and shorten its
life. We are devising a solution, involving material and heat treatment
technologies, to make it difficult for metal fatigue–induced “flaking”
damage to occur with long-term bearing use under high loads.
For example, the use of materials that have undergone
carbonitriding processes is advantageous in terms of life, but its heat
treatment takes time and the extent of
heat treatment deformation increases.
Having studied the composition of the
steel materials, NSK realized a longer
life using standard materials.
Also, by simulating the
mechanism of agitation resistance
from the lubricating oil in the AT unit
by means of numerical simulation, the
bearing cage was made of plastic
instead of metal, and a shape was
devised to create an oil reservoir.
Gaining Trust by Anticipatory Proposals,
Problem-Solving and Troubleshooting
In accepting orders for new projects, the key lies in how to quickly and
appropriately ascertain a customer’s needs and the ability to offer precise
proposals. Relationships that allow guest engineers to be embedded with
automakers is an NSK strength that enables the obtaining of information on
customer needs from the early stages of vehicle development and the making
of anticipatory proposals. In the development of a new AT unit, for example,
there have been cases in which it was possible to propose the optimum
bearing size from the initial stage, which led to the receipt of orders.
In addition to its responses up to the receipt of an order, there have been
cases in which NSK has gained and maintained customer trust by
troubleshooting̶for example, problem solving relating to mass-produced
product market complaints and warranties̶that has resulted in a customer
changing its supplier from another company to NSK. NSK is advancing a
sophisticated project involving a
sales and marketing technical
response manual called
“Co-Creation Project with,” an
effort to share and visualize
customer information, such as
who the primary customer
contact person is and what kind
of technology is key.
Oil flow analysis of a tapered
roller bearing
NSK REPORT 2017
11
The Complete Picture of NSK
NSK’s Business Activities and Corporate Value Creation
Framework for NSK’s Business Activities
NSK engages in BtoB operations, where its direct customers are
automakers and machinery manufacturers, not end users.
NSK has two business segments, the Industrial Machinery Business and
the Automotive Business, reflecting the industries in which its customers
operate. The Industrial Machinery Business Division Headquarters and
the Automotive Business Division Headquarters oversee these
businesses on a global level.
(Please see “Organizations Supporting Global Management” on page 39.)
Each business division headquarters maintains its own production, sales
and technology units that take responsibility for the entire business value
chain, from marketing activities for order receipt to product design,
manufacturing, sales, delivery, payment collection and the aftermarket.
As shown in the chart on the right, NSK’s value chain creates value for its
customers through business activities encompassing research and
development, manufacturing, sales and feedback from customers.
Feedback
R&D
Sales/
Aftermarket
Business Activities
Receipt of
Orders
NSK’s
Safety
Quality
Compliance
Procurement
DRIVER
Global Business
Platform
Overseas Development
( )
Capabilities
DRIVER
Four Core
Technologies
DRIVER
The Fifth Mid-Term
Management Plan
Shared Features of the Industrial Machinery Business and the Automotive Business
① NSK’s products are components that enhance the
③ Demand conditions in the industries of its customers
performance of the customer machinery in which they are
incorporated. The product specifications and functional
requirements of our customers influence NSK’s products and
business activities.
② QCDDSM
Quality, Cost, Delivery, Development, Service and Management
play an important role in securing our competitive advantage.
influence NSK’s net sales and profits.
④ The ability to develop business on a worldwide scale
influences NSK’s competitiveness and growth potential.
⑤ The ability to propose technological solutions is key to
acquiring new projects.
⑥ In principle, products are manufactured once orders are
received rather than in anticipation
of orders.
Value Creation in Automatic Transmissions (ATs)
There are various types of automobile
transmissions, but AT is a transmission that
controls automobile acceleration and
deceleration by the switching of automatic
gears. Among them, the most frequently
adopted type of AT is called step AT. In
addition to bearing products, such as needle
bearings and tapered roller bearings, NSK
supplies a variety of products, such as clutch
assemblies and friction plates, as
components for use in ATs.
As environmental regulations are
becoming increasingly more stringent,
NSK’s R&D capabilities, sales responses,
design technologies, production capabilities
and service are assisting in its responses to
customer needs, which include its desire to
make AT units smaller and lighter, to control
friction and make AT units more fuel
efficient, and to realize improvements in fuel
economy and comfort through multistep ATs.
1
2
3
10
NSK REPORT 2017
Background to NSK’s
AT Business Expansion
Expansion of automatic transmissions
in emerging markets (step AT and CVT)
FY2026 Demand Forecast
(compared with FY2015)
＋10 million units
Progress in shift to multistep AT
(multistep AT = seven or more speeds)
Multistep AT ratio:
FY2015 22％ ➡ FY2018 46％
Business expansion for
largest customers
New business acquisitions
by NSK’s customers
120
100
80
60
40
20
0
AT for use on a front-engine, front wheel-drive (FF) automobile
Transmission Market Forecast (by type)
(Unit: Millions)
95
89
103 108 112
FCV
EV
HV
DCT
CVT
AT
MT/AMT
2015
(actual)
(NSK forecast)
2018
2021
2024
2026 (FY)
Manufacturing Capital
Intellectual Capital
Human Capital
Financial Capital
Social/Relationship Capital
Natural Capital
R&D～Receipt of Orders
R&D
Receipt of Orders
Our four core technologies are tribology, materials, numerical simulation
and mechatronics (see page 34). In the field of R&D, NSK engages in
broad research and development that applies to both business segments,
in addition to fundamental research, advanced development, application
development and production technologies. NSK’s R&D activities lead to
the creation of new products, technologies and businesses.
The independent sales divisions of the Industrial Machinery Business
and Automotive Business coordinate with other internal departments
to win new orders. The timing of orders received, lead times and
other aspects of order-taking activities depend on the customer’s
business, products and components used. For global products, the
sales divisions coordinate with the relevant sites in other countries.
DRIVER
CSR/ESG
Management
Manufacturing
Mass
Production
Design/
Preparation
Key Inputs
● Technical staff (human capital)
● Accumulated technologies, R&D centers (intellectual capital)
● R&D structure with external parties (social/relationship capital)
● Financial foundation for funding R&D (financial capital), etc.
● Experience and track record in QCDDSM
(manufacturing, intellectual and human capital)
● Strong relationships of trust with customers
(social/relationship capital)
● Sales capabilities (human capital)
● NSK brand recognition (social/relationship capital), etc.
Our Strengths
● Our excellence is in solving complex technological problems, based on our
four core technologies and thanks to the breadth of our technical staff and
accumulated technologies gained from deep knowledge and experience.
● Based on our tight-knit relationships with customers, we can quickly
obtain product- and technology-related needs and work on development.
● Collaborating and jointly developing products with its customers,
suppliers and external research institutions, NSK leverages those
efforts in product development (e.g., steel materials, grease,
motors, electronic control units [ECUs]).
● NSK has a global network of technology centers.
● NSK has systematic education programs and educational institutions,
including the NSK Institute of Technology (NIT), for the training and
strengthening of its technical staff. (Please see page 35 for more details.)
Contributing to Improvements in
Fuel Efficiency through Tribology,
Materials and Numerical Simulation
In an environment where further improvements in automobile fuel
efficiency are being demanded, the utilization of NSK’s tribology,
materials and numerical simulation is driving the development of
AT-related products. Improving fuel efficiency requires the
downsizing of bearing size and low torque, but making a bearing
smaller or thinner will generally reduce its durability and shorten its
life. We are devising a solution, involving material and heat treatment
technologies, to make it difficult for metal fatigue–induced “flaking”
damage to occur with long-term bearing use under high loads.
For example, the use of materials that have undergone
carbonitriding processes is advantageous in terms of life, but its heat
treatment takes time and the extent of
heat treatment deformation increases.
Having studied the composition of the
steel materials, NSK realized a longer
life using standard materials.
Also, by simulating the
mechanism of agitation resistance
from the lubricating oil in the AT unit
by means of numerical simulation, the
bearing cage was made of plastic
instead of metal, and a shape was
devised to create an oil reservoir.
Oil flow analysis of a tapered
roller bearing
● NSK has internal systems that support tight-knit
communications between customers and its engineering
and sales staff.
● NSK’s global development and supply capabilities also
help to win a variety of orders (e.g., orders for newly
developed, improved, existing and standard products).
● In the Automotive Business, Global Account Managers
(GAMs) and Key Account Managers (KAMs) work
together on project requirements.
● NSK focuses on high-quality, environmentally friendly
products that are trusted by customers.
Gaining Trust by Anticipatory Proposals,
Problem-Solving and Troubleshooting
In accepting orders for new projects, the key lies in how to quickly and
appropriately ascertain a customer’s needs and the ability to offer precise
proposals. Relationships that allow guest engineers to be embedded with
automakers is an NSK strength that enables the obtaining of information on
customer needs from the early stages of vehicle development and the making
of anticipatory proposals. In the development of a new AT unit, for example,
there have been cases in which it was possible to propose the optimum
bearing size from the initial stage, which led to the receipt of orders.
In addition to its responses up to the receipt of an order, there have been
cases in which NSK has gained and maintained customer trust by
troubleshooting̶for example, problem solving relating to mass-produced
product market complaints and warranties̶that has resulted in a customer
changing its supplier from another company to NSK. NSK is advancing a
sophisticated project involving a
sales and marketing technical
response manual called
“Co-Creation Project with,” an
effort to share and visualize
customer information, such as
who the primary customer
contact person is and what kind
of technology is key.
NSK REPORT 2017
11
The Complete Picture of NSK
NSK’s Business Activities and Corporate Value Creation
Manufacturing Capital
Intellectual Capital
Human Capital
Financial Capital
Social/Relationship Capital
Natural Capital
Mass Production Design and Preparation～Manufacturing
Sales, Aftermarket～Feedback
Back to R&D
Mass Production Design and Preparation Procurement
Mass production design entails the design of large-lot products
delivered to customers. Mass production includes both newly designed
products and standardized products that do not require new designs.
Mass production preparation involves the setting up of processes and
production equipment at mass production plants once specifications
have been finalized. In many cases, final customer approval is required
for product specifications, equipment and processes.
The equipment, materials, parts and production materials
required to manufacture mass-produced products are procured
from manufacturers and suppliers. NSK’s basic procurement
policy involves procurement at each production site and
procurement by the head office, which determines procurement
policies on a company-wide level. Collaboration with suppliers to
ensure stable procurement is essential.
Key Inputs
Manufacturing
The manufacture of products takes place at the NSK Group’s
Sales, Aftermarket and Feedback
Sales activities span the delivery of manufactured products to
manufacturing plants. A wide range of business collaboration, such as
customers and distributors, inspection and acceptance of the
manufacturing, quality assurance, manufacturing engineering/equipment
delivered products, and final recording of the sale. Aftermarket
management, production control, plant accounting and general affairs
services entail the maintenance and repair of equipment and
work is necessary for stringent management concerning quality, cost and
machinery for customers and end users. Feedback from customers
delivery (QCD). Both the Industrial Machinery Business and the
Automotive Business maintain their own manufacturing plants.
is reflected in production plan reviews, inventory management,
product improvements and the development of new products.
● Mass production equipment preparation, capital
● Know-how of each production site (manufacturing,
investment (manufacturing capital)
intellectual capital)
● Design engineers (human capital)
● Accumulation of every type of technology (intellectual capital)
● Technology centers, R&D sites (intellectual capital)
● NIT (intellectual, human capital), etc.
● Joint development suppliers (intellectual,
social/relationship capital)
● Coordination/collaboration with each supplier
(social/relationship capital), etc.
● Production plants and facilities (manufacturing capital)
● Human resources to undertake production, sales and
● Various production technologies, accumulated know-how (intellectual capital)
inventory (PSI) management (human capital)
● Production technical skills (human capital)
● Customers, distributors in aftermarket services
● Supplier and local community support for production (social/relationship capital)
(social/relationship capital)
● Steel used as a raw material, components, oil, electric power
● Product-related survey and analytical data
and water (natural capital, manufacturing capital), etc.
(intellectual capital), etc.
Our Strengths
● Design quality is a key factor in manufacturing quality.
Accordingly, accurately understanding the specifications
required by customers and reflecting them in product
design leads to improvements in product development,
design proposals and product management.
● NSK develops its own, specialized production equipment,
which leads to lower costs for mass-produced products.
● Having a framework in place to manage the entire
process, from order receipt to the mass production
launch, NSK works to improve profitability by timely and
cost-conscious preparations, from product design to
mass production.
Numerical Simulation Utilized in the
Mass Production Design of AT Friction Materials
A part called a friction plate (friction material), used when connecting or
cutting power inside an AT, is one of the key parts of an AT unit. Developed
by NSK to further improve fuel efficiency, the “Nν (nu) Multi-Segment”
friction plate has optimized the flow of oil inside the AT and, by facilitating
the crimping and releasing of the plate, reduced the idle running torque
(drag torque) and realized a dramatic improvement in energy loss.
Although a small part about 15 cm in diameter, this friction plate has been
linked to a 1% improvement in AT automobile fuel efficiency compared to
conventional parts. Optimization of product shapes through computer
analysis and improvements in evaluation technology through the
accumulation of analytical data contributed to the successful mass
production design of “Nν (nu) Multi-Segment.”
In addition, friction materials with a thickness of 1 mm used for
friction plates have to function in temperatures from below freezing to
more than 300° C. In the mass production preparation process, mass
production was made possible by the
members of the departments involved
in the manufacturing technologies and
the methods for quality assurance
being established as a working group
team.
12
NSK REPORT 2017
● Favorable and strong relationships with suppliers that enable the
stable procurement of raw materials and components, enhanced
cost competitiveness and high quality.
● NSK jointly develops materials, parts and grease with suppliers to
improve the quality of its products.
● Overseas, we are working to reduce costs by improving the local
procurement ratio while advancing into markets jointly with existing
suppliers or assisting their efforts to make inroads independently.
● In equipment procurement, NSK develops its own equipment and
has a system for procuring within the Group.
● From the standpoint of CSR procurement, NSK monitors supplier performance
based on stringent criteria in its supplier CSR guidelines for human rights, the
environment, compliance, information security and BCP, and suggests
improvements as needed. NSK puts into practice green procurement, avoids the
use of conflict minerals and ensures compliance with the UK Modern Slavery Act.
Capable of Undertaking Local Procurement
after Achieving Long Life through
International Standard Materials
Currently, automotive production is undertaken globally, and
components are required to be supplied locally. Bearing in mind
local production and local procurement, NSK aimed to extend the
lives of bearings used for AT products with international-standard
steel available globally. In the past, measures had been taken to
improve durability by special materials and heat treatment, but
optimizing the design of the roller of the roller bearing (crowning
processing) now makes it possible to use standard materials. By
enabling the use of standard materials, local materials can be used
as the basis even overseas, resulting in greater advantages, from
the procurement standpoint by the improved efficiency of material
inventory and the cost
standpoint.
As there is no
need to perform a
special heat treatment,
the degree of freedom
when procuring heat
treatment equipment
for local production
also has been
increased.
● Operating 21 plants in Japan and 43 plants overseas, NSK
● NSK practices the holding of appropriate levels of inventory and
possesses a production system able to meet global demand
undertakes strict inventory controls with advanced PSI management.
in a timely manner.
● As mother plants, some of the plants both in Japan and
overseas have established support systems, such as for
launching overseas plants and measures for various tasks.
● The bedrock of the aftermarket business is NSK’s strong
relationship with distributors and its extensive network.
● NSK has advanced analysis capabilities and accumulated
technologies from access to broad data fields, such as for
● Small-group activities (QC circles) are conducted at each plant on
defects and damage at customers and end users.
an ongoing basis to improve workplace processes. More overseas
● Responding to repair and maintenance demand not only for its
plants are being operated under the supervision of local staff.
● The NSK Manufacturing Education and Training Center
own products but also for other companies’ products, NSK
focuses on sporadic demand outside of routine maintenance
provides hands-on training to engineers from plants around
and on prompt support that leverages its network.
the world with the aim of passing down technical skills and
● Feedback is used to improve products and propose solutions
improving technical capabilities.
with new technologies.
New Plants in South Korea,
Mexico and Japan (Haruna, Gunma)
In line with the expansion of NSK’s AT business, the Cheonan plant, the second
NSK production site in South Korea, was launched in April 2017 to maintain
expansion of production capabilities for needle roller bearings. Giving
consideration to making the plant a place that is conducive for employees to
work, the scattering of grinding oil has been eliminated, thereby realizing the
deodorizing of the plant. In addition, we plan to set up a factory for AT parts
(clutch assemblies) in Mexico and construct the third building at the Haruna
Plant in Gunma Prefecture, Japan. As a components manufacturer, following
customers’ production plans remains the highest priority.
A change made to a heat treatment method, which draws on NSK
proprietary technologies, to respond to sudden requests to increase the
number of AT bearings, has been accepted following an NSK internal
by our customers through our business dealings up to now and an
acknowledgment of having acted at an early stage.
evaluation test alone. This case provides proof positive of the trust placed in us
rank larger, we were able to
Toward Next Preparations/
Responses Using Customer Production Information
and Design Information Feedback
The nature of the sales and deliveries in the Automotive Business
demands timely responses by the so-called just-in-time system.
To respond flexibly to fluctuations in customer delivery quantities,
we are obtaining customers’ production information promptly and
accurately and bearing in mind ongoing proactive preparation.
In addition, to gain next project business, an important step is
to analyze the reasons why our products could not be ordered in
the current unit and to feed back this information to, for example,
the development and design departments. In a case where it was
found that NSK’s proposed
size and capacity of a
certain bearing was one
maintain our
competitiveness by working
on a response, for example,
by renewing the design
standards as a result of
reviewing and confirming
that there was no problem
to change.
P LAN
PDCA
Cycle
D
O
A
C
T
I
O
N
CHE C K
Cheonan Plant
NSK REPORT 2017
13
The Complete Picture of NSK
NSK’s Business Activities and Corporate Value Creation
Manufacturing Capital
Intellectual Capital
Human Capital
Financial Capital
Social/Relationship Capital
Natural Capital
Mass Production Design and Preparation～Manufacturing
Sales, Aftermarket～Feedback
Back to R&D
Mass Production Design and Preparation Procurement
Mass production design entails the design of large-lot products
The equipment, materials, parts and production materials
delivered to customers. Mass production includes both newly designed
required to manufacture mass-produced products are procured
products and standardized products that do not require new designs.
from manufacturers and suppliers. NSK’s basic procurement
Mass production preparation involves the setting up of processes and
policy involves procurement at each production site and
production equipment at mass production plants once specifications
procurement by the head office, which determines procurement
have been finalized. In many cases, final customer approval is required
policies on a company-wide level. Collaboration with suppliers to
for product specifications, equipment and processes.
ensure stable procurement is essential.
Key Inputs
Manufacturing
The manufacture of products takes place at the NSK Group’s
manufacturing plants. A wide range of business collaboration, such as
manufacturing, quality assurance, manufacturing engineering/equipment
management, production control, plant accounting and general affairs
work is necessary for stringent management concerning quality, cost and
delivery (QCD). Both the Industrial Machinery Business and the
Automotive Business maintain their own manufacturing plants.
Sales, Aftermarket and Feedback
Sales activities span the delivery of manufactured products to
customers and distributors, inspection and acceptance of the
delivered products, and final recording of the sale. Aftermarket
services entail the maintenance and repair of equipment and
machinery for customers and end users. Feedback from customers
is reflected in production plan reviews, inventory management,
product improvements and the development of new products.
● Mass production equipment preparation, capital
● Know-how of each production site (manufacturing,
investment (manufacturing capital)
● Design engineers (human capital)
intellectual capital)
● Joint development suppliers (intellectual,
● Accumulation of every type of technology (intellectual capital)
social/relationship capital)
● Technology centers, R&D sites (intellectual capital)
● Coordination/collaboration with each supplier
● NIT (intellectual, human capital), etc.
(social/relationship capital), etc.
● Production plants and facilities (manufacturing capital)
● Various production technologies, accumulated know-how (intellectual capital)
● Production technical skills (human capital)
● Supplier and local community support for production (social/relationship capital)
● Steel used as a raw material, components, oil, electric power
● Human resources to undertake production, sales and
inventory (PSI) management (human capital)
● Customers, distributors in aftermarket services
(social/relationship capital)
● Product-related survey and analytical data
and water (natural capital, manufacturing capital), etc.
(intellectual capital), etc.
● Operating 21 plants in Japan and 43 plants overseas, NSK
● NSK practices the holding of appropriate levels of inventory and
possesses a production system able to meet global demand
in a timely manner.
● As mother plants, some of the plants both in Japan and
overseas have established support systems, such as for
launching overseas plants and measures for various tasks.
● Small-group activities (QC circles) are conducted at each plant on
an ongoing basis to improve workplace processes. More overseas
plants are being operated under the supervision of local staff.
● The NSK Manufacturing Education and Training Center
provides hands-on training to engineers from plants around
the world with the aim of passing down technical skills and
improving technical capabilities.
undertakes strict inventory controls with advanced PSI management.
● The bedrock of the aftermarket business is NSK’s strong
relationship with distributors and its extensive network.
● NSK has advanced analysis capabilities and accumulated
technologies from access to broad data fields, such as for
defects and damage at customers and end users.
● Responding to repair and maintenance demand not only for its
own products but also for other companies’ products, NSK
focuses on sporadic demand outside of routine maintenance
and on prompt support that leverages its network.
● Feedback is used to improve products and propose solutions
with new technologies.
New Plants in South Korea,
Mexico and Japan (Haruna, Gunma)
In line with the expansion of NSK’s AT business, the Cheonan plant, the second
NSK production site in South Korea, was launched in April 2017 to maintain
expansion of production capabilities for needle roller bearings. Giving
consideration to making the plant a place that is conducive for employees to
work, the scattering of grinding oil has been eliminated, thereby realizing the
deodorizing of the plant. In addition, we plan to set up a factory for AT parts
(clutch assemblies) in Mexico and construct the third building at the Haruna
Plant in Gunma Prefecture, Japan. As a components manufacturer, following
customers’ production plans remains the highest priority.
A change made to a heat treatment method, which draws on NSK
proprietary technologies, to respond to sudden requests to increase the
number of AT bearings, has been accepted following an NSK internal
evaluation test alone. This case provides proof positive of the trust placed in us
by our customers through our business dealings up to now and an
acknowledgment of having acted at an early stage.
Toward Next Preparations/
Responses Using Customer Production Information
and Design Information Feedback
The nature of the sales and deliveries in the Automotive Business
demands timely responses by the so-called just-in-time system.
To respond flexibly to fluctuations in customer delivery quantities,
we are obtaining customers’ production information promptly and
accurately and bearing in mind ongoing proactive preparation.
In addition, to gain next project business, an important step is
to analyze the reasons why our products could not be ordered in
the current unit and to feed back this information to, for example,
the development and design departments. In a case where it was
found that NSK’s proposed
size and capacity of a
certain bearing was one
rank larger, we were able to
maintain our
competitiveness by working
on a response, for example,
by renewing the design
standards as a result of
reviewing and confirming
that there was no problem
to change.
PDCA
Cycle
P LAN
A
C
T
D
O
O
I
N
CHE C K
Cheonan Plant
NSK REPORT 2017
13
Our Strengths
● Design quality is a key factor in manufacturing quality.
Accordingly, accurately understanding the specifications
required by customers and reflecting them in product
design leads to improvements in product development,
design proposals and product management.
● NSK develops its own, specialized production equipment,
which leads to lower costs for mass-produced products.
● Having a framework in place to manage the entire
process, from order receipt to the mass production
launch, NSK works to improve profitability by timely and
cost-conscious preparations, from product design to
mass production.
Numerical Simulation Utilized in the
Mass Production Design of AT Friction Materials
A part called a friction plate (friction material), used when connecting or
cutting power inside an AT, is one of the key parts of an AT unit. Developed
by NSK to further improve fuel efficiency, the “Nν (nu) Multi-Segment”
friction plate has optimized the flow of oil inside the AT and, by facilitating
the crimping and releasing of the plate, reduced the idle running torque
(drag torque) and realized a dramatic improvement in energy loss.
Although a small part about 15 cm in diameter, this friction plate has been
linked to a 1% improvement in AT automobile fuel efficiency compared to
conventional parts. Optimization of product shapes through computer
analysis and improvements in evaluation technology through the
accumulation of analytical data contributed to the successful mass
production design of “Nν (nu) Multi-Segment.”
In addition, friction materials with a thickness of 1 mm used for
friction plates have to function in temperatures from below freezing to
more than 300° C. In the mass production preparation process, mass
production was made possible by the
members of the departments involved
in the manufacturing technologies and
the methods for quality assurance
being established as a working group
team.
12
NSK REPORT 2017
● Favorable and strong relationships with suppliers that enable the
stable procurement of raw materials and components, enhanced
cost competitiveness and high quality.
● NSK jointly develops materials, parts and grease with suppliers to
improve the quality of its products.
● Overseas, we are working to reduce costs by improving the local
procurement ratio while advancing into markets jointly with existing
suppliers or assisting their efforts to make inroads independently.
● In equipment procurement, NSK develops its own equipment and
has a system for procuring within the Group.
● From the standpoint of CSR procurement, NSK monitors supplier performance
based on stringent criteria in its supplier CSR guidelines for human rights, the
environment, compliance, information security and BCP, and suggests
improvements as needed. NSK puts into practice green procurement, avoids the
use of conflict minerals and ensures compliance with the UK Modern Slavery Act.
Capable of Undertaking Local Procurement
after Achieving Long Life through
International Standard Materials
Currently, automotive production is undertaken globally, and
components are required to be supplied locally. Bearing in mind
local production and local procurement, NSK aimed to extend the
lives of bearings used for AT products with international-standard
steel available globally. In the past, measures had been taken to
improve durability by special materials and heat treatment, but
optimizing the design of the roller of the roller bearing (crowning
processing) now makes it possible to use standard materials. By
enabling the use of standard materials, local materials can be used
as the basis even overseas, resulting in greater advantages, from
the procurement standpoint by the improved efficiency of material
inventory and the cost
standpoint.
As there is no
need to perform a
special heat treatment,
the degree of freedom
when procuring heat
treatment equipment
for local production
also has been
increased.
The Complete Picture of NSK
Financial and Non-Financial Highlights
Eleven-Year Summary
NSK Ltd. and Consolidated Subsidiaries
JP-GAAP up to and including the fiscal year ended March 31, 2015,
IFRS from the fiscal year ended March 31, 2016, onward.
Years ended March 31
Financial
Data
Net sales
[By segment]*1
[By region]
(Based on
customer location)
Industrial Machinery Business
Automotive Business
Others / Adjustments
Japan
The Americas
Europe
Asia (excluding Japan)
China
Other Asia
Operating income
Ordinary income
Net income attributable to owners of the parent
Capital expenditures
Depreciation and amortisation
R&D expenditures
Cash flows from operating activities (A)
Cash flows from investing activities (B)
Free cash flows (A) + (B)
Dividends paid
Acquisition of treasury shares
Equity attributable to owners of the parent
(shareholders’ equity)
Total assets
Interest-bearing debt
Number of employees worldwide (persons)
Number of overseas employees (persons)
Number of employees: non-consolidated (persons)
Proportion of female employees (Japan) (%)
Total waste (1,000 t)*2
Greenhouse gas emissions
(1,000 t-CO2 equivalent)*2
Number of environmentally friendly products (cumulative)
Net income
Equity attributable to owners of the parent
(shareholders’ equity)
Cash dividends*3
Operating income margin (%)
Return on average shareholders’ equity (ROE) (%)
Return on average assets (ROA) (%)
Ratio of net worth to total capital (%)
Net D/E ratio (times)
Dividend payout ratio (%)
Total return ratio (%)*4
Period-end share price (yen)
Price earnings ratio (PER) (times)
Price book-value ratio (PBR) (times)
Dividend yield (%)
Non-Financial
Data
Per Share
Data (Yen)
Financial
Indices
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
717,225
294,058
397,863
25,303
364,395
105,111
121,698
126,021
ー
ー
62,383
57,595
34,853
37,689
35,316
10,100
64,153
(64,600)
(447)
8,650
ー
262,425
815,788
255,557
23,413
13,285
4,519
5.6
91
437
75
64.53
485.62
16.0
8.7
14.0
4.5
32.2
0.69
24.8
24.8
1,124
17.4
2.3
1.4
772,036
307,243
435,705
29,087
388,929
107,321
133,853
141,933
ー
ー
69,343
64,854
42,613
53,905
38,380
10,240
69,236
(23,187)
46,049
10,277
ー
267,914
828,580
264,413
25,069
14,374
4,888
5.5
100
451
96
78.84
495.61
19.0
9.0
16.1
5.2
32.3
0.56
24.1
24.1
755
9.6
1.5
2.5
647,593
267,021
352,453
28,118
323,375
78,754
111,866
133,596
ー
ー
22,106
16,964
4,561
44,138
39,729
10,691
11,785
(46,422)
(34,637)
7,574
ー
233,395
744,229
323,165
24,050
12,895
5,274
5.5
85
384
110
8.44
431.74
14.0
3.4
1.8
0.6
31.4
0.85
165.9
165.9
377
44.7
0.9
3.7
587,572
201,963
366,463
19,145
289,540
70,609
98,504
128,918
ー
ー
11,305
7,598
4,765
21,818
37,149
8,794
51,108
(29,355)
21,753
4,327
ー
247,941
789,624
304,937
24,633
13,204
5,932
6.6
87
378
124
8.82
458.65
8.0
1.9
2.0
0.6
31.4
0.73
90.7
90.7
738
83.7
1.6
1.1
(56,090)
(45,262)
710,431
259,095
424,157
27,178
354,542
85,466
102,176
168,246
82,587
85,658
43,524
38,572
26,110
41,294
34,943
10,515
64,973
(33,348)
31,625
5,950
ー
257,012
788,626
274,585
26,334
15,039
6,306
6.5
176
865
140
11.0
6.1
10.3
3.3
32.6
0.60
22.8
22.8
717
14.8
1.5
1.5
733,192
255,835
444,585
32,772
363,754
86,267
107,958
175,213
89,068
86,143
44,417
42,004
28,514
54,619
35,807
10,373
57,158
1,068
6,491
ー
280,312
845,073
296,750
27,444
16,181
6,203
6.7
180
877
157
12.0
6.1
10.6
3.5
33.2
0.58
22.7
22.7
637
12.1
1.2
1.9
732,842
216,142
490,545
26,154
333,348
103,352
102,667
193,473
91,442
102,030
32,361
30,310
15,739
48,025
34,598
10,432
53,797
8,534
5,943
ー
319,286
882,547
305,102
28,487
17,267
6,398
6.5
182
871
173
11.0
4.4
5.2
1.8
36.2
0.51
37.7
37.7
715
24.5
1.2
1.5
871,742
242,969
590,545
38,226
329,136
134,483
124,590
283,532
167,239
116,293
68,049
66,785
31,167
45,448
35,079
9,919
70,342
(42,402)
27,940
8,650
ー
30,454
19,231
6,310
6.6
192
939
190
57.70
664.74
16.0
7.8
9.2
3.3
35.9
0.41
27.7
27.7
1,062
18.4
1.6
1.5
974,885
276,361
656,998
41,525
328,837
164,821
133,752
347,475
210,237
137,238
97,327
91,002
61,962
49,197
38,568
10,660
67,709
(46,335)
21,374
15,161
ー
31,088
20,052
6,294
6.9
201
968
202
114.56
842.69
28.0
10.0
15.3
5.8
40.4
0.31
24.4
24.4
1,758
15.3
2.1
1.6
48.30
475.45
52.75
518.56
29.14
591.36
Millions of yen (Financial data)
975,319
259,784
689,122
26,411
318,434
183,652
131,830
341,403
204,361
137,042
89,534
ー
65,719
54,996
43,048
11,155
108,622
(45,212)
63,410
18,425
ー
31,587
20,296
6,278
7.0
206
991
211
121.38
839.56
34.0
9.2
14.3
6.1
44.0
0.23
28.0
28.0
1,030
8.5
1.2
3.3
2017
949,170
226,924
696,271
25,974
330,512
165,177
121,920
331,559
201,185
130,373
65,341
－
45,560
58,602
43,354
13,858
67,936
(54,243)
13,692
20,174
14,999
31,501
20,210
7,585
10.7
211
991
219
86.08
873.11
38.0
6.9
9.9
4.4
44.2
0.28
44.1
77.2
1,592
18.5
1.8
2.4
359,201
1,000,932
315,532
456,046
1,129,164
326,400
454,661
1,032,374
278,152
461,350
1,043,955
267,399
Exchange
Rate Data
US$1
€1
116.93
150.35
114.55
162.22
100.74
144.47
92.83
130.89
85.63
112.92
79.02
109.40
83.10
107.14
100.24
134.37
109.93
138.77
120.14
132.58
108.42
118.84
*1 In accordance with segment changes in the business domains (part of operations transferred from Industrial Machinery to Automotive), the fiscal years
*2 Total waste and greenhouse gas emissions data up to the fiscal year ended March 31, 2010, encompasses Japan only. Data from the fiscal year ended
*3 The breakdown of the 38.0 yen per share dividend paid in the fiscal year ended March 31, 2017, is a normal dividend of ¥28.0 per share and a ¥10.0 per
*4 Total return ratio = (Dividends paid + Acquisition of treasury shares) ÷ Net income
ended March 31, 2016 and 2017, are presented under the new categories.
March 31, 2011, are presented on a global basis.
share dividend to commemorate the 100th anniversary of the Company’s founding.
14
NSK REPORT 2017
NSK REPORT 2017
15
The Complete Picture of NSK
Financial and Non-Financial Highlights
Eleven-Year Summary
NSK Ltd. and Consolidated Subsidiaries
Years ended March 31
Financial
Net sales
Data
[By segment]*1
Industrial Machinery Business
Automotive Business
Others / Adjustments
[By region]
(Based on
customer location)
Japan
The Americas
Europe
Asia (excluding Japan)
China
Other Asia
Operating income
Ordinary income
Net income attributable to owners of the parent
Capital expenditures
Depreciation and amortisation
R&D expenditures
Cash flows from operating activities (A)
Cash flows from investing activities (B)
Free cash flows (A) + (B)
Dividends paid
Acquisition of treasury shares
Equity attributable to owners of the parent
(shareholders’ equity)
Total assets
Interest-bearing debt
Non-Financial
Number of employees worldwide (persons)
Data
Number of overseas employees (persons)
Number of employees: non-consolidated (persons)
Proportion of female employees (Japan) (%)
Total waste (1,000 t)*2
Greenhouse gas emissions
(1,000 t-CO2 equivalent)*2
Number of environmentally friendly products (cumulative)
Per Share
Data (Yen)
Net income
Equity attributable to owners of the parent
(shareholders’ equity)
Cash dividends*3
Financial
Indices
Operating income margin (%)
Return on average shareholders’ equity (ROE) (%)
Return on average assets (ROA) (%)
Ratio of net worth to total capital (%)
Net D/E ratio (times)
Dividend payout ratio (%)
Total return ratio (%)*4
Period-end share price (yen)
Price earnings ratio (PER) (times)
Price book-value ratio (PBR) (times)
Dividend yield (%)
717,225
294,058
397,863
25,303
364,395
105,111
121,698
126,021
ー
ー
62,383
57,595
34,853
37,689
35,316
10,100
64,153
(64,600)
(447)
8,650
ー
262,425
815,788
255,557
23,413
13,285
4,519
5.6
91
437
75
64.53
485.62
16.0
8.7
14.0
4.5
32.2
0.69
24.8
24.8
1,124
17.4
2.3
1.4
772,036
307,243
435,705
29,087
388,929
107,321
133,853
141,933
ー
ー
69,343
64,854
42,613
53,905
38,380
10,240
69,236
(23,187)
46,049
10,277
ー
267,914
828,580
264,413
25,069
14,374
4,888
78.84
495.61
5.5
100
451
96
19.0
9.0
16.1
5.2
32.3
0.56
24.1
24.1
755
9.6
1.5
2.5
647,593
267,021
352,453
28,118
323,375
78,754
111,866
133,596
ー
ー
22,106
16,964
4,561
44,138
39,729
10,691
11,785
(46,422)
(34,637)
7,574
ー
233,395
744,229
323,165
24,050
12,895
5,274
5.5
85
384
110
8.44
431.74
14.0
3.4
1.8
0.6
31.4
0.85
165.9
165.9
377
44.7
0.9
3.7
587,572
201,963
366,463
19,145
289,540
70,609
98,504
128,918
ー
ー
11,305
7,598
4,765
21,818
37,149
8,794
51,108
(29,355)
21,753
4,327
ー
247,941
789,624
304,937
24,633
13,204
5,932
8.82
458.65
6.6
87
378
124
8.0
1.9
2.0
0.6
31.4
0.73
90.7
90.7
738
83.7
1.6
1.1
JP-GAAP up to and including the fiscal year ended March 31, 2015,
IFRS from the fiscal year ended March 31, 2016, onward.
Millions of yen (Financial data)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
710,431
259,095
424,157
27,178
354,542
85,466
102,176
168,246
82,587
85,658
43,524
38,572
26,110
41,294
34,943
10,515
64,973
(33,348)
31,625
5,950
ー
257,012
788,626
274,585
26,334
15,039
6,306
6.5
176
865
140
48.30
475.45
11.0
6.1
10.3
3.3
32.6
0.60
22.8
22.8
717
14.8
1.5
1.5
733,192
255,835
444,585
32,772
363,754
86,267
107,958
175,213
89,068
86,143
44,417
42,004
28,514
54,619
35,807
10,373
57,158
(56,090)
1,068
6,491
ー
280,312
845,073
296,750
27,444
16,181
6,203
6.7
180
877
157
52.75
518.56
12.0
6.1
10.6
3.5
33.2
0.58
22.7
22.7
637
12.1
1.2
1.9
732,842
216,142
490,545
26,154
333,348
103,352
102,667
193,473
91,442
102,030
32,361
30,310
15,739
48,025
34,598
10,432
53,797
(45,262)
8,534
5,943
ー
319,286
882,547
305,102
28,487
17,267
6,398
6.5
182
871
173
29.14
591.36
11.0
4.4
5.2
1.8
36.2
0.51
37.7
37.7
715
24.5
1.2
1.5
871,742
242,969
590,545
38,226
329,136
134,483
124,590
283,532
167,239
116,293
68,049
66,785
31,167
45,448
35,079
9,919
70,342
(42,402)
27,940
8,650
ー
974,885
276,361
656,998
41,525
328,837
164,821
133,752
347,475
210,237
137,238
97,327
91,002
61,962
49,197
38,568
10,660
67,709
(46,335)
21,374
15,161
ー
359,201
1,000,932
315,532
456,046
1,129,164
326,400
30,454
19,231
6,310
6.6
192
939
190
57.70
664.74
16.0
7.8
9.2
3.3
35.9
0.41
27.7
27.7
1,062
18.4
1.6
1.5
31,088
20,052
6,294
6.9
201
968
202
114.56
842.69
28.0
10.0
15.3
5.8
40.4
0.31
24.4
24.4
1,758
15.3
2.1
1.6
975,319
259,784
689,122
26,411
318,434
183,652
131,830
341,403
204,361
137,042
89,534
ー
65,719
54,996
43,048
11,155
108,622
(45,212)
63,410
18,425
ー
454,661
1,032,374
278,152
31,587
20,296
6,278
7.0
206
991
211
121.38
839.56
34.0
9.2
14.3
6.1
44.0
0.23
28.0
28.0
1,030
8.5
1.2
3.3
2017
949,170
226,924
696,271
25,974
330,512
165,177
121,920
331,559
201,185
130,373
65,341
－
45,560
58,602
43,354
13,858
67,936
(54,243)
13,692
20,174
14,999
461,350
1,043,955
267,399
31,501
20,210
7,585
10.7
211
991
219
86.08
873.11
38.0
6.9
9.9
4.4
44.2
0.28
44.1
77.2
1,592
18.5
1.8
2.4
Exchange
Rate Data
US$1
€1
116.93
150.35
114.55
162.22
100.74
144.47
92.83
130.89
85.63
112.92
79.02
109.40
83.10
107.14
100.24
134.37
109.93
138.77
120.14
132.58
108.42
118.84
*1 In accordance with segment changes in the business domains (part of operations transferred from Industrial Machinery to Automotive), the fiscal years
*2 Total waste and greenhouse gas emissions data up to the fiscal year ended March 31, 2010, encompasses Japan only. Data from the fiscal year ended
*3 The breakdown of the 38.0 yen per share dividend paid in the fiscal year ended March 31, 2017, is a normal dividend of ¥28.0 per share and a ¥10.0 per
*4 Total return ratio = (Dividends paid + Acquisition of treasury shares) ÷ Net income
ended March 31, 2016 and 2017, are presented under the new categories.
March 31, 2011, are presented on a global basis.
share dividend to commemorate the 100th anniversary of the Company’s founding.
14
NSK REPORT 2017
NSK REPORT 2017
15
The Complete Picture of NSK
Financial and Non-Financial Highlights
Trends in Major Indices
The comments under the charts apply to the actual results for the fiscal year ended March 2017.
IFRS from the fiscal year ended March 31, 2016, onward.
*JP-GAAP up to and including the fiscal year ended March 31, 2015,
Net Sales
(¥ Billions)
1,000
800
600
400
200
0
974.9
975.3
949.2
871.7
732.8
13/3
14/3
15/3
16/3
17/3
Operating Income Margin / Gross Profit Margin
Number of Product Press Releases (annual)
Lost-Worktime Injury Rate
(%)
25
20
15
10
5
0
- Operating Income Margin - Gross Profit Margin
(Releases)
21.3
23.1
22.5
22.2
0.80
0.70
0.68
18.6
4.4
10.0
9.2
7.8
6.9
25
22
24
21
21
0.34
0.34
13/3
14/3
15/3
16/3
17/3
13/3
14/3
15/3
16/3
17/3
13/3
14/3
15/3
16/3
17/3
While ongoing strength in the Automotive Business
contributed to improved sales on a volume basis, the ¥75.1
billion adverse impact from yen appreciation resulted in
sales revenue declining 3% compared with the previous year.
Operating income was down due to the impact from yen
appreciation and the booking of other operating expenses.
The operating income margin deteriorated 2.3 percentage
points compared with the previous year.
NSK made more than 20 news announcements for
products with global appeal.
Net Income Attributable to Owners of the Parent
ROE
■ Net Income Attributable to Owners of the Parent (left)
- ROE (right)
(¥ Billions)
80
15.3
62.0
14.3
65.7
9.9
45.6
9.2
31.2
5.2
15.7
(%)
16
12
8
4
0
13/3
14/3
15/3
16/3
17/3
Although deteriorating profit margins contributed to a
decline in ROE compared with the previous year, ROE was
still at the 10% level targeted in the Company’s Fifth
Mid-Term Management Plan.
Net Income per Share
Cash Dividends per Share, Dividend Payout Ratio
■ Net Income per Share (left)
■ Cash Dividends per Share (left)
-Dividend Payout Ratio (right)
(Yen)
150
44.1
120
37.7
114.6
121.4
90
60
30
0
27.7
57.7
29.1
11.0
16.0
86.1
28.0
34.0
38.0
24.4
28.0
13/3
14/3
15/3
16/3
17/3
(%)
50
40
30
20
10
0
NSK paid an ordinary dividend of ¥28 and a ¥10 dividend to
commemorate the 100th anniversary of the Company’s
founding. Efforts to enhance shareholder returns contributed
to a payout ratio of 44.1%. The Company also acquired ¥15
billion worth of treasury shares for the year ended March 2017.
(¥ Billions)
60
■ Capital Expenditures
■ Depreciation and Amortisation
(¥ Billions) ■ Interest-Bearing Debt (left)
500
- Ratio of Net Worth to Total Capital (right)
48.0
45.4
34.6
35.1
49.2
38.6
58.6
55.0
43.0
43.4
36.2
305.1
35.9
315.5
40.4
326.4
44.0
44.2
278.2
267.4
400
300
200
100
0
(%)
50
40
30
20
10
0
60
40
20
0
50
40
30
20
10
0
13/3
14/3
15/3
16/3
17/3
13/3
14/3
15/3
16/3
17/3
Capex increased ¥3.6 billion compared with the previous
year, primarily in ordinary investments (renewal,
productivity improvement, etc.) in the Automotive Business.
NSK continued to reduce interest-bearing debt. The
Company’s ratio of net worth to total capital improved to
44.2%, indicating compatibility in shareholder returns and
financial soundness.
16
NSK REPORT 2017
Capital Expenditures / Depreciation and Amortisation
Interest-Bearing Debt / Ratio of Net Worth to Total Capital
Greenhouse Gas Emissions per Production Unit*1
Number of Environmentally Friendly Products Developed
40
30
20
10
0
25,000
20,000
15,000
10,000
5,000
0
(%)
10
5
0
-5
-10
-15
-20
-25
-30
-35
While enhanced efforts have contributed to an overall
decline, there was one major incident. NSK is continuing to
bolster its efforts to prevent any reoccurrence.
*Data from the year ending March 31, 2015, are presented on a global basis.
*For additional information on the lost-worktime injury rate, please see page 45.
Ratio of Female Employees
17.3＊1
(Global)
17.6
(Global)
10.7＊2
(Japan)
6.5
6.6
6.9
7.0
(Japan)
Number of Employees Worldwide
Ratio of Overseas Employees
(Persons)
35,000
30,000
28,487
■ Japan ■ The Americas ■ Europe ■ Asia (left)
- Ratio of Overseas Employees (right)
30,454
31,088
31,587
31,501
61.2
63.1
64.5
64.3
64.2
(%)
100
75
50
25
0
13/3
14/3
15/3
16/3
17/3
13/3
14/3
15/3
16/3
17/3
Although there were no major changes compared with the year
ending March 31, 2016, employment over the medium term is
expanding in line with business growth, particularly in Asia.
The ratio of female employees has increased gradually to 10.7% in Japan
and 17.6% on a global basis, thanks to ongoing efforts to support career
advancement and expand the range of job opportunities for women.
*1 We have reviewed the scope of data and have revised the data retroactively.
*2 Data include the subsidiary acquired in 2016.
Manufacturing in Japan ーManufacturing outside Japan*2 ーDistribution in Japan*2
14/3
15/3
16/3
17/3
(Accumulated No. of products*)
202
211
219
190
173
13/3
5.8
-1.3
-6.9
-4.5
-5.7
-17.3
-5.8
-10.2
-8.4
-9.5
-10.2
-11.4
-31.3
-33.2
-33.2
13/3
14/3
15/3
16/3
17/3
NSK is making steady progress in reductions by introducing
energy-saving equipment and improving distribution efficiency and
With the development of eight new products, the number of
products contributing to the environment now stands at 219.
*Cumulative data from the year ended March 31, 2003.
production efficiency.
*1 Rates of percentage increase and decrease are presented compared with the
base date of the year ended March 31, 2012 (0%).
*2 We have revised the method of calculating greenhouse gas emissions and the data retroactively.
NSK REPORT 2017
17
0.8
0.6
0.4
0.2
0
(%)
20
15
10
5
0
250
200
150
100
50
0
Number of Product Press Releases (annual)
Lost-Worktime Injury Rate
(Releases)
40
30
20
10
0
25
22
24
21
21
13/3
14/3
15/3
16/3
17/3
0.8
0.6
0.4
0.2
0
0.80
0.70
0.68
0.34
0.34
13/3
14/3
15/3
16/3
17/3
NSK made more than 20 news announcements for
products with global appeal.
While enhanced efforts have contributed to an overall
decline, there was one major incident. NSK is continuing to
bolster its efforts to prevent any reoccurrence.
*Data from the year ending March 31, 2015, are presented on a global basis.
*For additional information on the lost-worktime injury rate, please see page 45.
Number of Employees Worldwide
Ratio of Overseas Employees
Ratio of Female Employees
(Persons)
35,000
30,000
28,487
■ Japan ■ The Americas ■ Europe ■ Asia (left)
- Ratio of Overseas Employees (right)
30,454
31,088
31,587
31,501
25,000
20,000
15,000
10,000
5,000
0
61.2
63.1
64.5
64.3
64.2
13/3
14/3
15/3
16/3
17/3
Although there were no major changes compared with the year
ending March 31, 2016, employment over the medium term is
expanding in line with business growth, particularly in Asia.
17.3＊1
(Global)
17.6
(Global)
10.7＊2
(Japan)
6.5
6.6
6.9
7.0
(Japan)
(%)
100
75
50
25
0
(%)
20
15
10
5
0
13/3
14/3
15/3
16/3
17/3
The ratio of female employees has increased gradually to 10.7% in Japan
and 17.6% on a global basis, thanks to ongoing efforts to support career
advancement and expand the range of job opportunities for women.
*1 We have reviewed the scope of data and have revised the data retroactively.
*2 Data include the subsidiary acquired in 2016.
Capital Expenditures / Depreciation and Amortisation
Interest-Bearing Debt / Ratio of Net Worth to Total Capital
Greenhouse Gas Emissions per Production Unit*1
Number of Environmentally Friendly Products Developed
The Complete Picture of NSK
Financial and Non-Financial Highlights
Trends in Major Indices
*JP-GAAP up to and including the fiscal year ended March 31, 2015,
IFRS from the fiscal year ended March 31, 2016, onward.
The comments under the charts apply to the actual results for the fiscal year ended March 2017.
Net Sales
(¥ Billions)
1,000
871.7
732.8
974.9
975.3
949.2
Operating Income Margin / Gross Profit Margin
- Operating Income Margin - Gross Profit Margin
21.3
23.1
22.5
22.2
18.6
4.4
10.0
9.2
7.8
6.9
13/3
14/3
15/3
16/3
17/3
13/3
14/3
15/3
16/3
17/3
While ongoing strength in the Automotive Business
contributed to improved sales on a volume basis, the ¥75.1
billion adverse impact from yen appreciation resulted in
Operating income was down due to the impact from yen
appreciation and the booking of other operating expenses.
The operating income margin deteriorated 2.3 percentage
sales revenue declining 3% compared with the previous year.
points compared with the previous year.
Net Income Attributable to Owners of the Parent
Net Income per Share
ROE
(¥ Billions)
- ROE (right)
■ Net Income Attributable to Owners of the Parent (left)
15.3
62.0
14.3
65.7
9.9
45.6
9.2
31.2
5.2
15.7
(%)
16
12
8
4
0
Cash Dividends per Share, Dividend Payout Ratio
(Yen)
150
■ Net Income per Share (left)
■ Cash Dividends per Share (left)
-Dividend Payout Ratio (right)
120
37.7
114.6
121.4
44.1
27.7
57.7
86.1
28.0
34.0
38.0
24.4
28.0
29.1
11.0
16.0
13/3
14/3
15/3
16/3
17/3
13/3
14/3
15/3
16/3
17/3
Although deteriorating profit margins contributed to a
decline in ROE compared with the previous year, ROE was
still at the 10% level targeted in the Company’s Fifth
Mid-Term Management Plan.
NSK paid an ordinary dividend of ¥28 and a ¥10 dividend to
commemorate the 100th anniversary of the Company’s
founding. Efforts to enhance shareholder returns contributed
to a payout ratio of 44.1%. The Company also acquired ¥15
billion worth of treasury shares for the year ended March 2017.
(¥ Billions)
■ Capital Expenditures
■ Depreciation and Amortisation
(¥ Billions) ■ Interest-Bearing Debt (left)
- Ratio of Net Worth to Total Capital (right)
48.0
45.4
34.6
35.1
49.2
38.6
58.6
55.0
43.0
43.4
36.2
305.1
35.9
315.5
40.4
326.4
44.0
44.2
278.2
267.4
800
600
400
200
0
80
60
40
20
0
60
50
40
30
20
10
0
(%)
25
20
15
10
5
0
90
60
30
0
500
400
300
200
100
0
(%)
50
40
30
20
10
0
(%)
50
40
30
20
10
0
13/3
14/3
15/3
16/3
17/3
13/3
14/3
15/3
16/3
17/3
Capex increased ¥3.6 billion compared with the previous
year, primarily in ordinary investments (renewal,
productivity improvement, etc.) in the Automotive Business.
NSK continued to reduce interest-bearing debt. The
Company’s ratio of net worth to total capital improved to
44.2%, indicating compatibility in shareholder returns and
financial soundness.
16
NSK REPORT 2017
(Accumulated No. of products*)
250
200
150
100
50
0
202
211
219
190
173
13/3
14/3
15/3
16/3
17/3
5.8
-1.3
-6.9
-4.5
-5.7
-17.3
-5.8
-10.2
-8.4
-9.5
-10.2
-11.4
-31.3
-33.2
-33.2
NSK is making steady progress in reductions by introducing
energy-saving equipment and improving distribution efficiency and
production efficiency.
*1 Rates of percentage increase and decrease are presented compared with the
base date of the year ended March 31, 2012 (0%).
*2 We have revised the method of calculating greenhouse gas emissions and the data retroactively.
With the development of eight new products, the number of
products contributing to the environment now stands at 219.
*Cumulative data from the year ended March 31, 2003.
NSK REPORT 2017
17
Manufacturing in Japan ーManufacturing outside Japan*2 ーDistribution in Japan*2
15/3
14/3
13/3
16/3
17/3
(%)
10
5
0
-5
-10
-15
-20
-25
-30
-35
Creating Corporate Value (Growth Strategies)
To Our Stakeholders
A Look Back at Events in Japan and Overseas in Fiscal 2016
NSK celebrated its 100th anniversary in fiscal 2016, the year its Fifth Mid-Term Management Plan began.
We have obtained measurable results but still see room for improvement.
On November 8, 2016, NSK
intellectual circles and in the mass
stronger-than-forecast earnings for
celebrated its 100th anniversary. We
media, the source that most people
fiscal 2016. Under the Fifth
would not be here today without the
rely on for their news.
Mid-Term Management Plan, NSK is
support of our numerous
stakeholders, including our
customers, suppliers, local
Fiscal 2016 was the first year of
working diligently to improve
NSK’s Fifth Mid-Term Management
profitability and strengthen
Plan. The outlook from the outset
competitiveness in each business
communities, and partners outside
was grim, with the yen appreciating
division and region, under the motto
Japan. We would like to express our
from the outset of the year and weak
of operational excellence. These
deep gratitude for this support from
demand in the Industrial Machinery
efforts have already begun to show
all our stakeholders.
Business. Although sales and profits
measurable results. However,
Looking back at 2016, the two
were in line with or just above our
profitability in the Industrial
largest news events were the United
forecasts in the first and second
Machinery Business is still not at a
Kingdom’s vote to exit the European
quarters, demand for industrial
satisfactory level, and we will
Union and the victory of Donald
Trump in the U.S. presidential
election. Both outcomes were a
surprise to many people,
underscoring the differences in
perception among respective
machinery began to pick up from the
continue to strengthen this area
third quarter, and the year ended on
going forward. Although safety,
a bright note.In the automobile
quality and compliance are
market, conditions in North America
fundamental requirements for all
remained brisk while sales in China
manufacturing companies, NSK
grew considerably against the
currently has room for improvement
sectors of society and conflicting
previous year due to the effect of tax
in its safety and quality performance,
viewpoints surrounding certain
breaks for small vehicle purchases.
and is prioritizing efforts on this
issues. It also exposed the
With market conditions acting as a
front.
one-sidedness of thinking among
tailwind, NSK reported
Issues for Fiscal 2017 Onward
The Industrial Machinery Business is reorganizing production and pushing forward with innovation in manufacturing.
In the Automotive Business, NSK aims to expand its powertrain business, expand its lineup of electric power
steering products, and develop new business in components for electric brake boosters.
One of our priorities is to restore
generation to its Shenyang plant in
changed significantly since then.
profitability in the Industrial
China, where demand is projected to
NSK aims to create a structure
Machinery Business, which fell
strengthen over the long term. NSK
capable of generating profits even in
amidst a decline in demand. One
is targeting demand in China by
challenging business environments.
step we are taking to achieve this is
shortening lead times through local
To this end, we are strengthening
a reorganization of our production
production, while enhancing cost
our cost competitiveness by
network. Specifically, NSK is
competitiveness by maximizing the
reorganizing production and
gradually transferring part of its
use of local parts and materials.
upgrading manufacturing methods.
production from the Fujisawa plant,
Moreover, we aim to expand sales of
We are working diligently to improve
which was built 80 years ago, to new
high-margin products such as
profitability and expand the presence
facilities at its Kirihara site, located
precision bearings, standard-size
of the Industrial Machinery Business
slightly to the north. In addition to
ball bearings and ball screws, in
in Europe and other regions outside
upgrading old equipment, the
addition to tapping into the mid- to
Japan.
transfer of production is also an
long-term growth potential of
In the Automotive Business, the
opportunity to streamline processes,
markets in railways and robots.
powertrain business has grown
improve machining processes and
Although the Industrial
briskly amid a shift in demand from
press ahead with other innovations
Machinery Business generated
manual transmissions (MT) to
in the manufacturing field.
NSK is also transferring
strong earnings during past peak
automatic transmissions (AT) and a
periods as sales expanded in
trend toward multistep AT. In China,
production of large and ultra-large
Europe, foreign exchange rates and
although MT was mainstream in the
bearings used in wind power
the competitive landscape have
past, the market has been shifting
We aim to be a company that
creates new value and
delivers sustainable growth
over the next 100 years.
President and Chief Executive Officer
18
NSK REPORT 2017
NSK REPORT 2017
19
Creating Corporate Value (Growth Strategies)
To Our Stakeholders
We aim to be a company that
creates new value and
delivers sustainable growth
over the next 100 years.
President and Chief Executive Officer
A Look Back at Events in Japan and Overseas in Fiscal 2016
NSK celebrated its 100th anniversary in fiscal 2016, the year its Fifth Mid-Term Management Plan began.
We have obtained measurable results but still see room for improvement.
On November 8, 2016, NSK
celebrated its 100th anniversary. We
would not be here today without the
support of our numerous
stakeholders, including our
customers, suppliers, local
communities, and partners outside
Japan. We would like to express our
deep gratitude for this support from
all our stakeholders.
Looking back at 2016, the two
largest news events were the United
Kingdom’s vote to exit the European
Union and the victory of Donald
Trump in the U.S. presidential
election. Both outcomes were a
surprise to many people,
underscoring the differences in
perception among respective
sectors of society and conflicting
viewpoints surrounding certain
issues. It also exposed the
one-sidedness of thinking among
Issues for Fiscal 2017 Onward
intellectual circles and in the mass
media, the source that most people
rely on for their news.
Fiscal 2016 was the first year of
NSK’s Fifth Mid-Term Management
Plan. The outlook from the outset
was grim, with the yen appreciating
from the outset of the year and weak
demand in the Industrial Machinery
Business. Although sales and profits
were in line with or just above our
forecasts in the first and second
quarters, demand for industrial
machinery began to pick up from the
third quarter, and the year ended on
a bright note.In the automobile
market, conditions in North America
remained brisk while sales in China
grew considerably against the
previous year due to the effect of tax
breaks for small vehicle purchases.
With market conditions acting as a
tailwind, NSK reported
stronger-than-forecast earnings for
fiscal 2016. Under the Fifth
Mid-Term Management Plan, NSK is
working diligently to improve
profitability and strengthen
competitiveness in each business
division and region, under the motto
of operational excellence. These
efforts have already begun to show
measurable results. However,
profitability in the Industrial
Machinery Business is still not at a
satisfactory level, and we will
continue to strengthen this area
going forward. Although safety,
quality and compliance are
fundamental requirements for all
manufacturing companies, NSK
currently has room for improvement
in its safety and quality performance,
and is prioritizing efforts on this
front.
The Industrial Machinery Business is reorganizing production and pushing forward with innovation in manufacturing.
In the Automotive Business, NSK aims to expand its powertrain business, expand its lineup of electric power
steering products, and develop new business in components for electric brake boosters.
One of our priorities is to restore
profitability in the Industrial
Machinery Business, which fell
amidst a decline in demand. One
step we are taking to achieve this is
a reorganization of our production
network. Specifically, NSK is
gradually transferring part of its
production from the Fujisawa plant,
which was built 80 years ago, to new
facilities at its Kirihara site, located
slightly to the north. In addition to
upgrading old equipment, the
transfer of production is also an
opportunity to streamline processes,
improve machining processes and
press ahead with other innovations
in the manufacturing field.
NSK is also transferring
production of large and ultra-large
bearings used in wind power
generation to its Shenyang plant in
China, where demand is projected to
strengthen over the long term. NSK
is targeting demand in China by
shortening lead times through local
production, while enhancing cost
competitiveness by maximizing the
use of local parts and materials.
Moreover, we aim to expand sales of
high-margin products such as
precision bearings, standard-size
ball bearings and ball screws, in
addition to tapping into the mid- to
long-term growth potential of
markets in railways and robots.
Although the Industrial
Machinery Business generated
strong earnings during past peak
periods as sales expanded in
Europe, foreign exchange rates and
the competitive landscape have
changed significantly since then.
NSK aims to create a structure
capable of generating profits even in
challenging business environments.
To this end, we are strengthening
our cost competitiveness by
reorganizing production and
upgrading manufacturing methods.
We are working diligently to improve
profitability and expand the presence
of the Industrial Machinery Business
in Europe and other regions outside
Japan.
In the Automotive Business, the
powertrain business has grown
briskly amid a shift in demand from
manual transmissions (MT) to
automatic transmissions (AT) and a
trend toward multistep AT. In China,
although MT was mainstream in the
past, the market has been shifting
18
NSK REPORT 2017
NSK REPORT 2017
19
Creating Corporate Value (Growth Strategies)
To Our Stakeholders
toward continuous variable
transmissions (CVT), dual clutch
transmissions (DCT) and multistep
AT. We aim to tap into related
demand for bearings and AT
components.
In the steering business, we
must work to expand our product
lineup. The focus of technological
change has shifted towards large
and medium-size vehicles, from
column assist electric power
steering (EPS)̶our field of
expertise̶to lower assist EPS.
Methods that assist steering force
downstream near the wheel are
growing in relevance due to their
compatibility with self-driving cars
and responsiveness. Having
successfully developed a rack assist
type (lower assist) system and
installed it in demonstration
vehicles, our foremost objective is
now to secure orders for
mass-produced vehicle models. We
are targeting the start of mass
production in 2020 or later to
coincide with the timing of our
customers' vehicle development.
Meanwhile for column type EPS,
our customers are demanding even
better performance. NSK intends to
lead the industry by refining its
technologies to deliver even greater
safety, responsiveness and lighter
weight.
Meanwhile, in a new
development NSK has been
preparing for the mass production of
components integrating ball screws
and bearings for electric brake
boosters. In the second half of the
current fiscal year, we will launch
production in Japan and plan to start
production in overseas locations
near demand centers. In electric
brake systems, we aim to win orders
against a backdrop of growing
demand as automatic emergency
braking systems become mandatory
in vehicles.
Our Vision for Sustained Growth Over the Next 100 Years
By harnessing the energies of each and every employee, we will work to deliver new performance,
functions and value for society and achieve sustainable growth over the next 100 years.
External expectations placed on NSK
tend to focus on how technologies
will change in the future, and the
new products and businesses that
NSK will create in response to these
changing technologies. On the
occasion of our 100th anniversary,
we established NSK Vision 2026:
Setting the Future in Motion as our
mid- to long-term vision. With our
customers, society, and our
shareholders now focusing on how
NSK will achieve this goal of Setting the
Future in Motion, we have a responsibility
to deliver measurable results.
By setting the future in motion, we
aim to generate new levels of
performance, functionality and value
for not only the customers we supply
directly, but also the people who use
the vehicles and home electronics in
which our products are incorporated,
as well as the end users of the
industrial equipment, machines and
systems that employ NSK products.
With an even greater focus on
societal trends, we will utilize our
four core technologies to create new
products and services that match
our customers' needs. Moreover, I
believe we can also take a
completely new approach to our
existing products, services and
businesses. Over the past 100 years
of our history, we have done our
utmost to satisfy customer
requirements and demands, but it is
also vital that we anticipate and
understand what end users desire in
the finished products. We intend to
expand the scope of our potential by
breaking with outdated traditions
and conservative thinking. To this
end, we must constantly ask
ourselves why we do things the
current way, and search for better
and more effective methods of
accomplishing our goals.
Last year, NSK stepped up its
public relations to commemorate its
100th anniversary. NSK is not widely
known among the general public as
end users generally do not have
many opportunities to see our
products with their own eyes. We
believe that our centennial public
relations effort has helped bring the
NSK name further into the public
consciousness. Our employees feel
pride and unity when the NSK brand
is recognized, and as such, we
expect that our public relations
efforts will have a positive impact not
only in Japan, but also on our
operations around the world. We will
continue focusing the abilities of
each and every Group employee on
achieving sustainable growth over
the next 100 years.
NSK's Initiatives to Address ESG Issues
business.
NSK aims to promote diversity and inclusion while contributing to the environment through its
NSK follows Japan's Corporate Governance Code and is working on an ongoing basis to improve
the effectiveness of its Board of Directors.
First, regarding E (environment),
strengthen our diversity and inclusion
well. This extends to childcare and
international society came together to
initiatives. Diversity of gender, age and
elderly care policies, for example, as well
sign the COP21 Paris Agreement in
nationality, is essential. Organizations
as other situations that demand
2015, rallying behind the goal of
composed of people with similar
employees' time for a variety of reasons.
reducing CO2 emissions to a net total of
backgrounds and mindsets tend to form
As one initiative to support working
zero by the end of the century. Countries
monochromic cultures. However, in a
parents, in Japan NSK has introduced an
and regions around the world have
rapidly changing world where
in-house childcare service on days when
introduced regulations to reduce CO2
uncertainty is the norm, there are limits
employees work on national holidays
emissions and increase renewable
to what can be accomplished with
and public childcare services are closed.
energy, and competition to develop new
homogeneous value systems and ways
Both mothers and fathers have begun to
technologies has gained momentum,
of thinking. In order to remain a
take advantage of this service. NSK has
especially in electric vehicles and wind
company that is highly regarded and
also started a trial work-at-home
power generation.
welcomed by society and customers, we
program for employees raising children.
At NSK, our corporate philosophy
must respond and adapt to the many
In addition to childcare, we are also
calls for the preservation of the global
changes occurring around the world.
environment through Motion & Control™
Diversity is an asset that will help us
promoting more flexible working styles
for all employees, regardless of gender
technology, as our products can directly
achieve this. I believe that having people
or age.
help improve the environment. Our
with a range of different opinions debate
In order to promote diversity and
bearings, automotive parts and precision
and discuss problems will lead to better
inclusion, it is important to understand
machinery products help minimize
decisions and outcomes on important
why diversity leads to innovation and why
energy loss and facilitate the efficient
matters. NSK conducted a survey of its
organizations that lack diversity are at
control of mechanical movements.
64 plants around the world, and one of
risk. To further this understanding, we
Leveraging our four core technologies,
the most interesting findings was that
aim to encourage dialogue among
we believe our first mission is to develop
the plant with the best quality
employees and are striving to create an
further environmentally friendly products
performance was in China, and that it
organization and corporate culture that
that can be employed around the world.
also had the highest ratio of female
welcomes diverse members and value
At NSK, we strive to contribute to the
employees and managers among the
systems.
environment in terms of both its
Group. This may be, for example, that
With respect to G (governance),
products and manufacturing methods,
female employees can offer a different
since the introduction of Japan's
aiming to reduce environmental load in
perspective of the shop floor in terms of
Corporate Governance Code, attention
our production processes by improving
arrangement, organization and
has focused on the importance of
production efficiency, installing
cleanliness, compared to sites with
succession planning for top
energy-saving equipment, and switching
predominantly male staff. Moreover, the
management and developing the next
to cleaner energy sources. In order for
ways discussion takes place within an
generation of managers. In the past,
NSK to attain sustained growth, we must
organization also tend to differ. Whereas
most companies were exclusively
become more proactive and attuned to
male-dominated organizations tend to
controlled by the CEO, but in the future,
the global societal goal of achieving a
operate based on hierarchical
companies will have to be more
sharp reduction in CO2 emissions. This
relationships between supervisors and
transparent and explain the
requires an improvement in our ability to
employees and seniority-based systems,
decision-making process for nominating
create innovative production
technologies and develop
discussion at organizations with a
and selecting successors to the CEO
greater number of female employees
position. NSK has adopted a Company
groundbreaking new products. To
tends to be more open and inclusive.
with Three Committees structure. I had
achieve this goal, we are investing more
Empowering women in the workplace is
previously headed the Nominating
heavily than in the past. As part of our
a key issue for our management. NSK
Committee as NSK's president and CEO,
commitment to our corporate
philosophy, we have formulated
aims to assist female employees with
but since the June 2017 Ordinary
their career development while providing
General Meeting of Shareholders an
long-term environmental visions with
a supportive work environment.
10- and 20-year time spans.
Workplaces that are welcoming for
independent director has taken over this
role. We are currently drawing up plans
With regard to our relationship with
female employees are, by extension,
for introducing a leadership
S (society), we see the need to
more supportive for male employees as
development system, including defining
20
NSK REPORT 2017
NSK REPORT 2017
21
Creating Corporate Value (Growth Strategies)
To Our Stakeholders
toward continuous variable
compatibility with self-driving cars
safety, responsiveness and lighter
transmissions (CVT), dual clutch
and responsiveness. Having
weight.
transmissions (DCT) and multistep
successfully developed a rack assist
Meanwhile, in a new
AT. We aim to tap into related
demand for bearings and AT
components.
type (lower assist) system and
installed it in demonstration
development NSK has been
preparing for the mass production of
vehicles, our foremost objective is
components integrating ball screws
In the steering business, we
now to secure orders for
and bearings for electric brake
must work to expand our product
mass-produced vehicle models. We
boosters. In the second half of the
lineup. The focus of technological
are targeting the start of mass
current fiscal year, we will launch
change has shifted towards large
production in 2020 or later to
production in Japan and plan to start
and medium-size vehicles, from
coincide with the timing of our
customers' vehicle development.
production in overseas locations
near demand centers. In electric
Meanwhile for column type EPS,
brake systems, we aim to win orders
our customers are demanding even
against a backdrop of growing
Methods that assist steering force
better performance. NSK intends to
demand as automatic emergency
downstream near the wheel are
growing in relevance due to their
lead the industry by refining its
braking systems become mandatory
technologies to deliver even greater
in vehicles.
column assist electric power
steering (EPS)̶our field of
expertise̶to lower assist EPS.
Our Vision for Sustained Growth Over the Next 100 Years
By harnessing the energies of each and every employee, we will work to deliver new performance,
functions and value for society and achieve sustainable growth over the next 100 years.
External expectations placed on NSK
tend to focus on how technologies
will change in the future, and the
new products and businesses that
NSK will create in response to these
changing technologies. On the
occasion of our 100th anniversary,
we established NSK Vision 2026:
Setting the Future in Motion as our
mid- to long-term vision. With our
customers, society, and our
shareholders now focusing on how
NSK will achieve this goal of Setting the
Future in Motion, we have a responsibility
to deliver measurable results.
By setting the future in motion, we
businesses. Over the past 100 years
known among the general public as
aim to generate new levels of
of our history, we have done our
performance, functionality and value
utmost to satisfy customer
end users generally do not have
many opportunities to see our
for not only the customers we supply
requirements and demands, but it is
products with their own eyes. We
directly, but also the people who use
also vital that we anticipate and
believe that our centennial public
the vehicles and home electronics in
understand what end users desire in
relations effort has helped bring the
which our products are incorporated,
the finished products. We intend to
NSK name further into the public
as well as the end users of the
expand the scope of our potential by
consciousness. Our employees feel
industrial equipment, machines and
breaking with outdated traditions
pride and unity when the NSK brand
systems that employ NSK products.
and conservative thinking. To this
With an even greater focus on
end, we must constantly ask
is recognized, and as such, we
expect that our public relations
societal trends, we will utilize our
ourselves why we do things the
efforts will have a positive impact not
four core technologies to create new
current way, and search for better
only in Japan, but also on our
products and services that match
and more effective methods of
operations around the world. We will
our customers' needs. Moreover, I
accomplishing our goals.
continue focusing the abilities of
believe we can also take a
completely new approach to our
existing products, services and
Last year, NSK stepped up its
each and every Group employee on
public relations to commemorate its
achieving sustainable growth over
100th anniversary. NSK is not widely
the next 100 years.
NSK's Initiatives to Address ESG Issues
NSK aims to promote diversity and inclusion while contributing to the environment through its
business.
NSK follows Japan's Corporate Governance Code and is working on an ongoing basis to improve
the effectiveness of its Board of Directors.
First, regarding E (environment),
international society came together to
sign the COP21 Paris Agreement in
2015, rallying behind the goal of
reducing CO2 emissions to a net total of
zero by the end of the century. Countries
and regions around the world have
introduced regulations to reduce CO2
emissions and increase renewable
energy, and competition to develop new
technologies has gained momentum,
especially in electric vehicles and wind
power generation.
At NSK, our corporate philosophy
calls for the preservation of the global
environment through Motion & Control™
technology, as our products can directly
help improve the environment. Our
bearings, automotive parts and precision
machinery products help minimize
energy loss and facilitate the efficient
control of mechanical movements.
Leveraging our four core technologies,
we believe our first mission is to develop
further environmentally friendly products
that can be employed around the world.
At NSK, we strive to contribute to the
environment in terms of both its
products and manufacturing methods,
aiming to reduce environmental load in
our production processes by improving
production efficiency, installing
energy-saving equipment, and switching
to cleaner energy sources. In order for
NSK to attain sustained growth, we must
become more proactive and attuned to
the global societal goal of achieving a
sharp reduction in CO2 emissions. This
requires an improvement in our ability to
create innovative production
technologies and develop
groundbreaking new products. To
achieve this goal, we are investing more
heavily than in the past. As part of our
commitment to our corporate
philosophy, we have formulated
long-term environmental visions with
10- and 20-year time spans.
With regard to our relationship with
S (society), we see the need to
strengthen our diversity and inclusion
initiatives. Diversity of gender, age and
nationality, is essential. Organizations
composed of people with similar
backgrounds and mindsets tend to form
monochromic cultures. However, in a
rapidly changing world where
uncertainty is the norm, there are limits
to what can be accomplished with
homogeneous value systems and ways
of thinking. In order to remain a
company that is highly regarded and
welcomed by society and customers, we
must respond and adapt to the many
changes occurring around the world.
Diversity is an asset that will help us
achieve this. I believe that having people
with a range of different opinions debate
and discuss problems will lead to better
decisions and outcomes on important
matters. NSK conducted a survey of its
64 plants around the world, and one of
the most interesting findings was that
the plant with the best quality
performance was in China, and that it
also had the highest ratio of female
employees and managers among the
Group. This may be, for example, that
female employees can offer a different
perspective of the shop floor in terms of
arrangement, organization and
cleanliness, compared to sites with
predominantly male staff. Moreover, the
ways discussion takes place within an
organization also tend to differ. Whereas
male-dominated organizations tend to
operate based on hierarchical
relationships between supervisors and
employees and seniority-based systems,
discussion at organizations with a
greater number of female employees
tends to be more open and inclusive.
Empowering women in the workplace is
a key issue for our management. NSK
aims to assist female employees with
their career development while providing
a supportive work environment.
Workplaces that are welcoming for
female employees are, by extension,
more supportive for male employees as
well. This extends to childcare and
elderly care policies, for example, as well
as other situations that demand
employees' time for a variety of reasons.
As one initiative to support working
parents, in Japan NSK has introduced an
in-house childcare service on days when
employees work on national holidays
and public childcare services are closed.
Both mothers and fathers have begun to
take advantage of this service. NSK has
also started a trial work-at-home
program for employees raising children.
In addition to childcare, we are also
promoting more flexible working styles
for all employees, regardless of gender
or age.
In order to promote diversity and
inclusion, it is important to understand
why diversity leads to innovation and why
organizations that lack diversity are at
risk. To further this understanding, we
aim to encourage dialogue among
employees and are striving to create an
organization and corporate culture that
welcomes diverse members and value
systems.
With respect to G (governance),
since the introduction of Japan's
Corporate Governance Code, attention
has focused on the importance of
succession planning for top
management and developing the next
generation of managers. In the past,
most companies were exclusively
controlled by the CEO, but in the future,
companies will have to be more
transparent and explain the
decision-making process for nominating
and selecting successors to the CEO
position. NSK has adopted a Company
with Three Committees structure. I had
previously headed the Nominating
Committee as NSK's president and CEO,
but since the June 2017 Ordinary
General Meeting of Shareholders an
independent director has taken over this
role. We are currently drawing up plans
for introducing a leadership
development system, including defining
20
NSK REPORT 2017
NSK REPORT 2017
21
Creating Corporate Value (Growth Strategies)
To Our Stakeholders
qualifications based on discussions of
the ideal candidate for CEO in terms of
career background and mindset.
In fiscal 2015 and fiscal 2016, the
same external consultant has evaluated
the effectiveness of the Board of
Directors and provided an assessment of
progress made over the past two years.
This assessment was communicated to
all directors based on a predetermined
reporting process. NSK’s Board of
Directors was commended for its
improvement in ensuring livelier debates
as a result of reviewing the matters put
for debate and discussion by the Board
of Directors, increasing the length of
time allocated for debate, and working
harder to make sure all of the directors
are well informed prior to meetings. By
having the opportunity to visit business
sites inside and outside Japan, NSK's
independent directors gained a better
understanding of the Company's
business conditions and key tasks, which
has led to deeper discussions and a
greater sense of unity at Board of
Directors meetings. However, the
consultant also raised issues requiring
improvement, including greater
awareness of the role that the Board of
Directors should play in ensuring
sustainable growth and improving
corporate value over the mid- to
long-term, increasing diversity on the
Board of Directors, and reconsidering
the ratio of external to internal directors.
NSK will continue working to improve
the effectiveness of its Board of
Directors, taking into consideration a
range of opinions and the results of
self-assessments made by each
director.
Toward a Sustainable World
It will become increasingly important to incorporate SDG objectives into our
management based on a sound understanding of their true aims.
Our Long-Term Outlook
Sustainable Development Goals (SDGs):
2030 Agenda for Sustainable
Development was adopted by the United
Nations at a summit in September 2015.
It consists of 17 Sustainable
Development Goals and 169 targets for
realizing a sustainable world.
Government agencies, corporations and
civic organizations have been called
upon to adopt the SDGs and work
together to solve social issues including
eradicating poverty, eliminating
discrimination, and addressing climate
change.
We believe the United Nations
created these goals with the intention of
improving the welfare and happiness of
people around the world as the
organization has thus far striven to
achieve through its initiatives in regions
around the world. From the latter half of
the 20th century to the present day,
unsustainable development has been
the reality around the world. In addition
to causing environmental problems, this
has led to disparities between regions as
well as other problems such as the use
of child labor in developing countries.
Accordingly, we realize that it is more
important than ever to focus on
sustainable development.
While the 17 SDGs are all
reasonable goals, figuring out which of
them we should aim to address in our
corporate activities has posed quite a
challenge. Some goals are directly
related to corporate activity, while others
have a more indirect relationship.
However, given that corporations are a
considerable presence in society,
companies of a certain size should be
expected to address SDGs.
Regarding the SDG for “quality
education,” NSK views the next
generation as an important stakeholder,
and conducts a range of initiatives to
promote science and support education.
For example, we established the NSK
Chinese translations of this book
The SDG for “responsible consumption
Scholarship Foundation in conjunction
through our overseas affiliates.
and production” is an important
with our 100th anniversary. The
Furthermore, NSK has offered science
consideration in our supply chain
Foundation has already begun awarding
classes for children at the Science
operations, and also addresses the issue
scholarships to undergraduates and
Museum in Kitanomaru, Tokyo for the
of recycling.
graduate students in Japan wishing to
past 10 years.
I believe we need increasing
study abroad, as well as assisting
The SDG calling for “affordable and
awareness of the 17 SDGs within the
science and engineering students from
clean energy” is also relevant to our
context of our business development,
Asian countries, particularly the ASEAN
operations. NSK develops components
including the orientation of our
region, to study in Japan. In addition, we
and technologies used in products and
operations, the location of our
have published a book called “The
Secrets of Bearings” in a comic book
services that in turn reduce energy
production bases, and the type of plants
consumption. Within the context of the
we create. The issue of how to reflect
format aimed at elementary students,
SDG for “industry, innovation and
the SDGs in our operations will become
and gifted these books to all elementary
infrastructure” although NSK’s products
an increasingly important task for NSK’s
schools and public libraries in Japan. We
are very basic parts, they play a vital role
management going forward.
have also distributed English and
as elemental components in machinery.
Viewing change as an opportunity for further development, NSK aims to leverage the
technologies and business foundation it has accumulated throughout its history to
create new value that contributes to society.
NSK has established Vision 2026 as its
accidents increasing among elderly
made in condition monitoring with IoT
vision for the next decade. Within the
drivers in Japan, we believe that
and AI, there may come a day when
context of changes in the business
automatic braking and automated
industrial machinery, components, and
environment over a period that extends
steering systems will quickly become
bearings break down less frequently,
beyond this plan and our growth
standard features. Other major keywords
reducing demand for spare parts. While
strategies in response to these changes,
will be “connected cars” and “ride
NSK has conducted research and
we believe that the major technological
sharing,” which stand to dramatically
engineering into unbreakable bearings
trends in the Automotive Business will
change society and the automotive
and long-lasting bearings, at present all
be the popularization of electric vehicles,
industry. If the connected car concept
bearings reach the limit of their service
increasing vehicle electrification, and
works as expected, traffic congestion
lives after use for a certain length of
autonomous driving. Numerous
should ease. Paired with ride sharing,
time. If the service lives of bearings
predictions have been made about when
people can forgo owning a car if they
become longer, this could change the
the spread of electric vehicles will begin
choose. We must think about how these
demand structure in the Industrial
to gain traction and how far this trend
trends will impact automotive
will spread. Countries around the world
technologies and design. Will
have formulated policies to support
automobiles simply be viewed as a
Machinery Business. This would pose a
business risk to NSK. Amid trends in
technological innovation, however, we
electric vehicles, with France and the
means of mobility in the future?
believe requirements for more
United Kingdom announcing goals to
Or will people continue to drive cars for
technologically advanced products
prohibit the sale of gasoline- and
diesel-powered vehicles by 2040.
pleasure as a hobby? We believe that the
present significant business
purpose of automobiles will split into two
opportunities. Moreover, business
Although related infrastructure, the cost
distinct categories: mobility and driving
growth also depends on our ability to
of batteries, driving range and other
issues remain to be solved, the shift
pleasure.
In fields other than automobiles, we
without waiting for customers or
proactively offer new value on our own,
toward electric vehicles is progressing
are seeing rapid advances in
external parties to define requirements.
smoothly. A while it is yet unknown
technologies related to IoT, artificial
Having accumulated a range of
whether completely self-driving cars can
intelligence, robotics, alternative
become a reality by 2026, we expect
partially autonomous vehicles and
materials, metallic lamination
assisted driving to become prevalent.
these technologies have the potential to
new value for society, with an eye to
Moreover, considering the current state
drastically change the industrial
fields beyond our traditional business
of traffic accidents, especially with
machinery industry. If advances are
domain.
technology, and 3D printing. We believe
transform into a company that creates
cutting-edge technologies and built a
solid business foundation, NSK aims to
22
NSK REPORT 2017
NSK REPORT 2017
23
Creating Corporate Value (Growth Strategies)
To Our Stakeholders
qualifications based on discussions of
for debate and discussion by the Board
improvement, including greater
the ideal candidate for CEO in terms of
of Directors, increasing the length of
awareness of the role that the Board of
career background and mindset.
time allocated for debate, and working
Directors should play in ensuring
In fiscal 2015 and fiscal 2016, the
harder to make sure all of the directors
sustainable growth and improving
same external consultant has evaluated
are well informed prior to meetings. By
corporate value over the mid- to
the effectiveness of the Board of
having the opportunity to visit business
long-term, increasing diversity on the
Directors and provided an assessment of
sites inside and outside Japan, NSK's
Board of Directors, and reconsidering
progress made over the past two years.
independent directors gained a better
the ratio of external to internal directors.
This assessment was communicated to
understanding of the Company's
NSK will continue working to improve
all directors based on a predetermined
business conditions and key tasks, which
the effectiveness of its Board of
reporting process. NSK’s Board of
Directors was commended for its
has led to deeper discussions and a
greater sense of unity at Board of
Directors, taking into consideration a
range of opinions and the results of
improvement in ensuring livelier debates
Directors meetings. However, the
self-assessments made by each
as a result of reviewing the matters put
consultant also raised issues requiring
director.
Toward a Sustainable World
It will become increasingly important to incorporate SDG objectives into our
management based on a sound understanding of their true aims.
Sustainable Development Goals (SDGs):
realizing a sustainable world.
discrimination, and addressing climate
2030 Agenda for Sustainable
Government agencies, corporations and
change.
Development was adopted by the United
civic organizations have been called
We believe the United Nations
Nations at a summit in September 2015.
upon to adopt the SDGs and work
created these goals with the intention of
It consists of 17 Sustainable
together to solve social issues including
improving the welfare and happiness of
Development Goals and 169 targets for
eradicating poverty, eliminating
people around the world as the
organization has thus far striven to
achieve through its initiatives in regions
around the world. From the latter half of
the 20th century to the present day,
unsustainable development has been
the reality around the world. In addition
to causing environmental problems, this
has led to disparities between regions as
well as other problems such as the use
of child labor in developing countries.
Accordingly, we realize that it is more
important than ever to focus on
sustainable development.
While the 17 SDGs are all
reasonable goals, figuring out which of
them we should aim to address in our
corporate activities has posed quite a
challenge. Some goals are directly
related to corporate activity, while others
have a more indirect relationship.
However, given that corporations are a
considerable presence in society,
companies of a certain size should be
expected to address SDGs.
Regarding the SDG for “quality
education,” NSK views the next
generation as an important stakeholder,
and conducts a range of initiatives to
promote science and support education.
For example, we established the NSK
Scholarship Foundation in conjunction
with our 100th anniversary. The
Foundation has already begun awarding
scholarships to undergraduates and
graduate students in Japan wishing to
study abroad, as well as assisting
science and engineering students from
Asian countries, particularly the ASEAN
region, to study in Japan. In addition, we
have published a book called “The
Secrets of Bearings” in a comic book
format aimed at elementary students,
and gifted these books to all elementary
schools and public libraries in Japan. We
have also distributed English and
Chinese translations of this book
through our overseas affiliates.
Furthermore, NSK has offered science
classes for children at the Science
Museum in Kitanomaru, Tokyo for the
past 10 years.
The SDG calling for “affordable and
clean energy” is also relevant to our
operations. NSK develops components
and technologies used in products and
services that in turn reduce energy
consumption. Within the context of the
SDG for “industry, innovation and
infrastructure” although NSK’s products
are very basic parts, they play a vital role
as elemental components in machinery.
The SDG for “responsible consumption
and production” is an important
consideration in our supply chain
operations, and also addresses the issue
of recycling.
I believe we need increasing
awareness of the 17 SDGs within the
context of our business development,
including the orientation of our
operations, the location of our
production bases, and the type of plants
we create. The issue of how to reflect
the SDGs in our operations will become
an increasingly important task for NSK’s
management going forward.
Our Long-Term Outlook
Viewing change as an opportunity for further development, NSK aims to leverage the
technologies and business foundation it has accumulated throughout its history to
create new value that contributes to society.
NSK has established Vision 2026 as its
vision for the next decade. Within the
context of changes in the business
environment over a period that extends
beyond this plan and our growth
strategies in response to these changes,
we believe that the major technological
trends in the Automotive Business will
be the popularization of electric vehicles,
increasing vehicle electrification, and
autonomous driving. Numerous
predictions have been made about when
the spread of electric vehicles will begin
to gain traction and how far this trend
will spread. Countries around the world
have formulated policies to support
electric vehicles, with France and the
United Kingdom announcing goals to
prohibit the sale of gasoline- and
diesel-powered vehicles by 2040.
Although related infrastructure, the cost
of batteries, driving range and other
issues remain to be solved, the shift
toward electric vehicles is progressing
smoothly. A while it is yet unknown
whether completely self-driving cars can
become a reality by 2026, we expect
partially autonomous vehicles and
assisted driving to become prevalent.
Moreover, considering the current state
of traffic accidents, especially with
accidents increasing among elderly
drivers in Japan, we believe that
automatic braking and automated
steering systems will quickly become
standard features. Other major keywords
will be “connected cars” and “ride
sharing,” which stand to dramatically
change society and the automotive
industry. If the connected car concept
works as expected, traffic congestion
should ease. Paired with ride sharing,
people can forgo owning a car if they
choose. We must think about how these
trends will impact automotive
technologies and design. Will
automobiles simply be viewed as a
means of mobility in the future?
Or will people continue to drive cars for
pleasure as a hobby? We believe that the
purpose of automobiles will split into two
distinct categories: mobility and driving
pleasure.
In fields other than automobiles, we
are seeing rapid advances in
technologies related to IoT, artificial
intelligence, robotics, alternative
materials, metallic lamination
technology, and 3D printing. We believe
these technologies have the potential to
drastically change the industrial
machinery industry. If advances are
made in condition monitoring with IoT
and AI, there may come a day when
industrial machinery, components, and
bearings break down less frequently,
reducing demand for spare parts. While
NSK has conducted research and
engineering into unbreakable bearings
and long-lasting bearings, at present all
bearings reach the limit of their service
lives after use for a certain length of
time. If the service lives of bearings
become longer, this could change the
demand structure in the Industrial
Machinery Business. This would pose a
business risk to NSK. Amid trends in
technological innovation, however, we
believe requirements for more
technologically advanced products
present significant business
opportunities. Moreover, business
growth also depends on our ability to
proactively offer new value on our own,
without waiting for customers or
external parties to define requirements.
Having accumulated a range of
cutting-edge technologies and built a
solid business foundation, NSK aims to
transform into a company that creates
new value for society, with an eye to
fields beyond our traditional business
domain.
22
NSK REPORT 2017
NSK REPORT 2017
23
Creating Corporate Value (Growth Strategies)
Looking Back on Past Mid-Term Management Plans
Here we take a retrospective look at the past 10 years of mid-term management plans, from the second to the fourth.
(Note: Mid-Term Management Plan is abbreviated as MTP)
(Note: To show 11 years of trends, the actual figures are based on the JP-GAAP.)
The Third MTP
Year to March 31, 2007‒Year to March 31, 2009 Year to March 31, 2010‒Year to March 31, 2013 Year to March 31, 2014‒Year to March 31, 2016
The Second MTP
The Fourth MTP
To become No. 1
in total quality
Establish foundation for NEXT10
(where NSK should be at 100th
anniversary of establishment in 2016)
● Transition to growth strategy
● Improvement of profitability
Responding to paradigm shifts
Reorganizing business foundation
toward net sales of ¥1 trillion
● Period to establish and consolidate
corporate fundamentals appropriate
for a company with net sales of
￥1 trillion
● Continue measures to become No. 1
in total quality
Establishing corporate
fundamentals appropriate
for a company
with net sales of ¥1 trillion
● Establish corporate fundamentals
appropriate for a company with net sales
of ¥1 trillion in 2016, the100th
anniversary of NSK's foundation
● Implement measures to achieve
mid-term targets
● Continue to implement basic strategies
(focus on profitability, growth in emerging
countries, global management)
Common Group Strategies
Our Three Core Management Strategies
Business Strategies
① Strengthen manufacturing capability
② Strengthen product development capability
③ Strengthen overseas profitability
④ Strengthen global management capability
Positioning of Each Business
Industrial machinery bearings:
Profit growth driver
Automotive products:
Stable profit foundation
Precision machinery and parts:
Steady contribution to total profits
Foundation to Underpin Measures
Global hitozukuri (human resource
development) supporting growth
Production innovation through thorough
monozukuri awareness
Rebuilding of global IT systems
Until the second year of the Second MTP (the
year ended March 2008), the Company steadily
expanded its business due to factors that
included favorable global economic conditions
and the added impetus provided by high
demand for infrastructure and
resource-related business in emerging
markets, as well as the weak yen. As a result,
the Company achieved record-high sales, as
well as operating and ordinary income, for four
consecutive fiscal years.
However, Lehman Brothers filed for
bankruptcy in the autumn of the third and final
fiscal year, fiscal 2008, and the environments of
all businesses and markets suffered significant
deterioration due to the global economic crisis.
As emergency revenue measures, the
Company thus made adjustments to its
production levels and reduced fixed costs, but
business performance in the final year of the
Second MTP (the year ended March 2009) fell
short of targets.
① Enhancement of business-based
management (sales & marketing, production
and technological divisions brought under
business headquarters management)
② Growth strategies
③ Profitability improvement
Specific Measures
A. Enhancement of business-based management
Autonomous management by integrated
business management and the clarification of
divisional responsibilities
B. Growth strategies
① Increase presence in emerging markets
② Expand environmental, infrastructure and
resource businesses
③ Respond to technological innovation
C. Profitability improvement
① Proactive sales strategy (strengthen
proposal-based sales capabilities)
② Reorganize global production sites
③ Accelerate new product development
Amid the severe business conditions that followed
the collapse of Lehman Brothers, the Company
responded to the paradigm shift typified by the
keywords “emerging markets” and “technological
innovation,” worked on reorganizing its business
structure toward net sales of ￥1 trillion and
achieved some measure of success.
Nevertheless, the upheaval in the business
environment, including a sharp appreciation of
the yen and fluctuations in global demand,
continued to intensify, and the numerical targets
of the final year of the Third MTP (the year ended
March 2013) were not achieved.
Furthermore, having been found guilty of
violating the Antimonopoly Law in a 2013 case
involving a bearing product cartel, the Company
received a cease-and-desist order and was
ordered to pay financial penalties. As a priority
and urgent task, the Company undertook
measures to strengthen its compliance system
toward the early restoration of trust and to
prevent any reoccurrence.
● Strengthened the industrial machinery
bearings business (improved roller bearing
supply capacity, expanded aftermarket sales
networks)
● Strengthened its business foundation in China
(established a production system for a full
product lineup, built an autonomous
management system within China)
● Expanded the global business and improved
● Exceeded the MTP target for global expansion
revenues in the automotive products business
of the EPS business
● Improved overseas profitability, primarily in
● Enhanced profitability following the
Europe and Asia
● Expanded business structures in China and
India
● Rapid responses to changes in the demand
environment (reflect on effects of the Lehman
Brothers collapse, particularly in Japan)
● Quality improvements in the Precision
Machinery and Parts Business are incomplete
● Even though measures to boost earnings have
reorganization of the Precision Machinery and
Parts Business
● Advanced local production and local
procurement
● Declines in profitability levels due to the extremely
high value of the yen and inadequate responses to
changes in the business environment, including
extreme fluctuations in demand
● Decrease in the Industrial Machinery Business
sales ratio
been carried out, including partial plant
shutdowns in the U.S. business, further
improvement in profitability is needed
● Strengthening of the compliance system to
restore trust and prevent any reoccurrence
following the cartel incident
Growth with focus on profitability
① Growth in emerging countries
② Enhancement of customer and sector
strategies
③ Production and technological innovation
capabilities
④ Strategic alliances
Corporate Foundation
Develop management capability to handle
¥1 trillion in sales volume
① Enhancement of corporate governance and
compliance
② Reform of business structure
③ Advancement of global management
Basics of MTP (Priority Issues)
Safety, quality and compliance
Against a backdrop of improvements in the
profitability of the Automotive Business and
assisted by an underlying weakness in yen
exchange rates, the Company achieved all its
numerical targets, including those for net
sales and profit, a year ahead of schedule in
the second year of the Fourth MTP. The
Company also improved on the targets in the
MTP’s final fiscal year. Significant growth was
recorded in the Chinese business and in the
EPS business in particular.
With regard to profitability, the Company
achieved an operating income margin of
10.0% in the fiscal year ended March 2015 and
maintained a high level of 9.7% in the final
fiscal year. In contrast, net sales and
profitability in the Industrial Machinery
Business were on a declining trend, buffeted
by the slowdown in global economic growth,
including the deceleration in China.
● Achieved all the MTP numerical targets
● Improved profitability on a consolidated basis
● Expanded business in China, increased EPS
sales
● Made progress with the global management
structure
● Strengthened and enhanced compliance
● Continue to build foundation as a company
with ￥1 trillion in net sales
● Establish profitability not greatly affected by
business cycles or fluctuations in the
amounts of raw materials or exchange rates
● Promote new products and development in
new areas
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Business Trends
Net Sales
(¥ Billions)
1,000
772.0
740.0
717.2
710.4
733.2
780.0
732.8
628.5
647.6
587.6
■ Actual ■ Target
Operating Income
974.9
975.3
940.0
871.7
(¥ Billions)
100
■ Actual ■ Target
97.3
94.7
86.0
74.0
69.3
62.4
42.6
66.0
68.0
43.5
44.4
32.4
22.1
11.3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Operating Income Margin
ー Actual Target
Ordinary Income
(％)
10.0
10.0
8.7
9.0
10.0
9.7
9.1
8.5
7.8
(¥ Billions)
100
■ Actual ■ Target
91.0
94.0
80.0
6.8
6.1
6.1
4.4
3.4
1.9
71.5
64.9
57.6
38.9
66.8
62.0
42.0
38.6
30.3
17.0
7.6
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Net Income
(¥ Billions)
■ Actual ■ Target
ー Actual Target
42.6
44.5
34.9
25.6
26.1
28.5
37.0
31.2
15.7
4.6
4.8
67.2
62.0
52.0
16.1
15.0
14.0
12.1
15.3
14.9
13.0
10.3
10.6
14.0
5.2
9.2
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
06/3
07/3
08/3
11/3
12/3
13/3
14/3
15/3
16/3
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
1.8
09/3
2.0
10/3
Net D/E Ratio
(Times)
ー Actual Target
Movements in Exchange Rates (￥/US$) (￥/Euro)
ー Actual (￥/US$)
ー Actual (￥/Euro)
Assumed
0.73
0.69
0.73
0.56
0.60
0.58
0.85
0.40
0.51
0.50
0.41
0.31
0.40
0.23
162.22
150.35
137.39
110.37
116.93
114.55
130.89
144.47
136.00
100.74
108.00
112.92
109.40
120.00
92.83
85.63
79.02
83.10
134.37
138.77
132.58
120.14
107.14
90.00
100.24
120.00
109.93
90.00
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
80
60
40
20
0
80
60
40
20
0
ROE
(％)
20.0
15.0
10.0
5.0
0
(Yen)
200
150
100
50
0
800
600
400
200
0
8.0
6.0
4.0
2.0
0
100
80
60
40
20
0
1.0
0.8
0.6
0.4
0.2
0
24
NSK REPORT 2017
NSK REPORT 2017
25
Creating Corporate Value (Growth Strategies)
Looking Back on Past Mid-Term Management Plans
Here we take a retrospective look at the past 10 years of mid-term management plans, from the second to the fourth.
(Note: Mid-Term Management Plan is abbreviated as MTP)
Business Trends
(Note: To show 11 years of trends, the actual figures are based on the JP-GAAP.)
The Second MTP
The Third MTP
The Fourth MTP
Year to March 31, 2007‒Year to March 31, 2009 Year to March 31, 2010‒Year to March 31, 2013 Year to March 31, 2014‒Year to March 31, 2016
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To become No. 1
in total quality
Responding to paradigm shifts
Reorganizing business foundation
toward net sales of ¥1 trillion
Establish foundation for NEXT10
(where NSK should be at 100th
● Period to establish and consolidate
corporate fundamentals appropriate
anniversary of establishment in 2016)
for a company with net sales of
● Transition to growth strategy
● Improvement of profitability
￥1 trillion
in total quality
● Continue measures to become No. 1
Establishing corporate
fundamentals appropriate
for a company
with net sales of ¥1 trillion
● Establish corporate fundamentals
appropriate for a company with net sales
of ¥1 trillion in 2016, the100th
anniversary of NSK's foundation
● Implement measures to achieve
mid-term targets
● Continue to implement basic strategies
(focus on profitability, growth in emerging
countries, global management)
Common Group Strategies
Our Three Core Management Strategies
Business Strategies
① Strengthen manufacturing capability
② Strengthen product development capability
③ Strengthen overseas profitability
④ Strengthen global management capability
① Enhancement of business-based
management (sales & marketing, production
and technological divisions brought under
business headquarters management)
Growth with focus on profitability
① Growth in emerging countries
② Enhancement of customer and sector
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Positioning of Each Business
Industrial machinery bearings:
Profit growth driver
Automotive products:
Stable profit foundation
Precision machinery and parts:
Steady contribution to total profits
② Growth strategies
③ Profitability improvement
Specific Measures
A. Enhancement of business-based management
Autonomous management by integrated
business management and the clarification of
divisional responsibilities
B. Growth strategies
① Increase presence in emerging markets
② Expand environmental, infrastructure and
compliance
③ Production and technological innovation
strategies
capabilities
④ Strategic alliances
Corporate Foundation
Develop management capability to handle
¥1 trillion in sales volume
① Enhancement of corporate governance and
② Reform of business structure
③ Advancement of global management
Basics of MTP (Priority Issues)
Safety, quality and compliance
Foundation to Underpin Measures
resource businesses
Global hitozukuri (human resource
development) supporting growth
Production innovation through thorough
monozukuri awareness
Rebuilding of global IT systems
③ Respond to technological innovation
C. Profitability improvement
① Proactive sales strategy (strengthen
proposal-based sales capabilities)
② Reorganize global production sites
③ Accelerate new product development
Until the second year of the Second MTP (the
Amid the severe business conditions that followed
Against a backdrop of improvements in the
year ended March 2008), the Company steadily
the collapse of Lehman Brothers, the Company
profitability of the Automotive Business and
expanded its business due to factors that
responded to the paradigm shift typified by the
assisted by an underlying weakness in yen
included favorable global economic conditions
keywords “emerging markets” and “technological
exchange rates, the Company achieved all its
and the added impetus provided by high
innovation,” worked on reorganizing its business
numerical targets, including those for net
demand for infrastructure and
resource-related business in emerging
structure toward net sales of ￥1 trillion and
achieved some measure of success.
markets, as well as the weak yen. As a result,
Nevertheless, the upheaval in the business
the Company achieved record-high sales, as
environment, including a sharp appreciation of
well as operating and ordinary income, for four
the yen and fluctuations in global demand,
sales and profit, a year ahead of schedule in
the second year of the Fourth MTP. The
Company also improved on the targets in the
MTP’s final fiscal year. Significant growth was
recorded in the Chinese business and in the
consecutive fiscal years.
continued to intensify, and the numerical targets
EPS business in particular.
However, Lehman Brothers filed for
of the final year of the Third MTP (the year ended
With regard to profitability, the Company
bankruptcy in the autumn of the third and final
March 2013) were not achieved.
achieved an operating income margin of
fiscal year, fiscal 2008, and the environments of
Furthermore, having been found guilty of
10.0% in the fiscal year ended March 2015 and
all businesses and markets suffered significant
violating the Antimonopoly Law in a 2013 case
maintained a high level of 9.7% in the final
deterioration due to the global economic crisis.
involving a bearing product cartel, the Company
fiscal year. In contrast, net sales and
As emergency revenue measures, the
Company thus made adjustments to its
received a cease-and-desist order and was
profitability in the Industrial Machinery
ordered to pay financial penalties. As a priority
Business were on a declining trend, buffeted
production levels and reduced fixed costs, but
and urgent task, the Company undertook
by the slowdown in global economic growth,
business performance in the final year of the
measures to strengthen its compliance system
including the deceleration in China.
Second MTP (the year ended March 2009) fell
toward the early restoration of trust and to
short of targets.
prevent any reoccurrence.
● Strengthened the industrial machinery
● Strengthened its business foundation in China
bearings business (improved roller bearing
supply capacity, expanded aftermarket sales
networks)
(established a production system for a full
product lineup, built an autonomous
management system within China)
● Achieved all the MTP numerical targets
● Improved profitability on a consolidated basis
● Expanded business in China, increased EPS
● Expanded the global business and improved
● Exceeded the MTP target for global expansion
● Made progress with the global management
sales
structure
● Strengthened and enhanced compliance
revenues in the automotive products business
of the EPS business
● Improved overseas profitability, primarily in
● Enhanced profitability following the
● Expanded business structures in China and
Parts Business
Europe and Asia
India
reorganization of the Precision Machinery and
● Advanced local production and local
procurement
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● Rapid responses to changes in the demand
● Declines in profitability levels due to the extremely
● Continue to build foundation as a company
environment (reflect on effects of the Lehman
high value of the yen and inadequate responses to
with ￥1 trillion in net sales
Brothers collapse, particularly in Japan)
● Quality improvements in the Precision
changes in the business environment, including
● Establish profitability not greatly affected by
extreme fluctuations in demand
business cycles or fluctuations in the
Machinery and Parts Business are incomplete
● Decrease in the Industrial Machinery Business
amounts of raw materials or exchange rates
● Even though measures to boost earnings have
sales ratio
● Promote new products and development in
been carried out, including partial plant
shutdowns in the U.S. business, further
improvement in profitability is needed
● Strengthening of the compliance system to
restore trust and prevent any reoccurrence
following the cartel incident
new areas
Net Sales
(¥ Billions)
1,000
■ Actual ■ Target
974.9
975.3
940.0
871.7
800
600
400
200
0
772.0
740.0
717.2
628.5
647.6
587.6
710.4
733.2
780.0
732.8
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
Operating Income
(¥ Billions)
■ Actual ■ Target
97.3
94.7
86.0
74.0
69.3
62.4
42.6
66.0
68.0
43.5
44.4
32.4
22.1
11.3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Operating Income Margin
(％)
10.0
8.7
9.0
6.8
6.1
6.1
ー Actual Target
10.0
9.7
9.1
8.5
7.8
Ordinary Income
(¥ Billions)
4.4
3.4
1.9
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
■ Actual ■ Target
91.0
94.0
80.0
71.5
64.9
57.6
38.9
66.8
62.0
42.0
38.6
30.3
17.0
7.6
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
100
80
60
40
20
0
100
80
60
40
20
0
Net Income
(¥ Billions)
■ Actual ■ Target
67.2
62.0
52.0
ROE
(％)
20.0
15.0
10.0
5.0
0
16.1
15.0
14.0
12.1
ー Actual Target
15.3
14.9
13.0
10.3
10.6
14.0
5.2
9.2
06/3
07/3
08/3
1.8
09/3
2.0
10/3
11/3
12/3
13/3
14/3
15/3
16/3
42.6
44.5
34.9
25.6
4.6
4.8
26.1
28.5
37.0
31.2
15.7
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
10.0
8.0
6.0
4.0
2.0
0
100
80
60
40
20
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Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Net D/E Ratio
(Times)
1.0
ー Actual Target
Movements in Exchange Rates (￥/US$) (￥/Euro)
(Yen)
200
ー Actual (￥/US$)
ー Actual (￥/Euro)
Assumed
0.8
0.6
0.4
0.2
0
0.73
0.69
0.56
0.85
0.40
0.73
0.60
0.58
0.51
0.50
0.41
0.31
0.40
0.23
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
150
100
50
0
162.22
150.35
137.39
110.37
116.93
114.55
144.47
136.00
130.89
108.00
112.92
109.40
100.74
92.83
85.63
134.37
138.77
120.00
107.14
90.00
109.93
100.24
132.58
120.14
120.00
90.00
79.02
83.10
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
24
NSK REPORT 2017
NSK REPORT 2017
25
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Creating Corporate Value (Growth Strategies)
The Fifth Mid-Term Management Plan
Aims and Implementation
Outline of the Fifth Mid-Term Management Plan
Under the slogan “embark on new chapter in evolution towards
next 100 years” with two key policies of “operational excellence”
together with “innovate and challenge,” NSK is addressing the
three main management tasks of achieving sustainable growth,
reconstructing its profit base and expanding into new growth fields.
Twin Pillars
1. Operational Excellence
By going one step further in leveraging monozukuri, a key ingredient
in our DNA, we are endeavoring to realize more robust front-line
capabilities. In addition, we are pursuing efficiency across all our
manufacturing, sales, technical and administrative functions while
working to raise the competitiveness of core businesses.
2. Innovate and Challenge
This pillar focuses on the creation of new value for the future
through new technologies, products and businesses. By pursuing
operational excellence, the Company will secure the level of
profitability necessary to reinvest in innovation for the next stage of
development, thereby achieving further growth.
1. Sustainable Growth
Through our focus on sustainable growth, NSK will contribute
to the creation of a safe, convenient, comfortable and
environmentally friendly society.
2. Reconstruct Profit Base
Having improved profitability under the Fourth Mid-Term
Management Plan, NSK will make every effort to reconstruct its
business structure and profit base to ensure that the Company’s
foundation is more resilient to changes in its external
environment. At the same time, we will continue our traditional
emphasis on monozukuri and quality while taking care of our
employees and valuing our customers and business partners.
3. Expand into New Growth Fields
In addition to growth through functional and elemental
components that leverage NSK’s core technologies, the
Company is broadening its focus to include the applications,
machinery, equipment and systems that use NSK products. We
will be more proactive in advancing technological development
and marketing designed to enhance these functions.
Strategies by Business
Industrial Machinery
Automotive
Against a backdrop of factors that include a slowdown in growth in
emerging markets and a downturn in resource prices, the demand
environment for the Industrial Machinery Business is in an adjustment
phase and its future remains uncertain. In contrast, mid- to long-term
technological needs are evolving, and we will engage in the following
key initiatives so that we can meet and grow those needs.
Based on the two main topics of “diversification in automotive power sources” and
the “evolution in vehicle dynamics control,” significant changes in the environment
in which the Automotive Business operates are proceeding at a rapid pace. In
accordance with these changes in the environment, the Company reorganizes the
business into the Automotive Powertrain Division HQ and the Automotive Steering
and Actuator Division HQ and link them to next-generation growth.
Measures Geared toward Key Initiatives
Measures Geared toward Key Initiatives
▶Response to Changes in the Business Environment
To rework its competitive edge and improve profitability, the
Company will review quality and costs, work to shorten lead times
and strengthen product appeal.
▶Measures for Focus Sectors
Having cited the infrastructure field, including wind turbines and
railcars; capital goods, including machine tools; and the rapidly
growing fields of robotics and medicine as its focus sectors, the
Company will provide solutions. The Company will also strengthen
the management of its sales channels in the aftermarket field.
▶Creation of New Added Value and Demand
In addition to engaging in the technological development and the
establishment of a business model for a condition monitoring
system (CMS), NSK will focus on developing new products by
harnessing the synergies created by combining bearing and linear
motion technology.
▶Powertrain Business
The Company will bring about the further evolution of its elemental
technologies for bearings and automatic transmission (AT) products. With
regard to the latter, the Company is anticipating sales expansion boosted
by multistep AT and an increase in business from customers that handle
unit products. Against the backdrop of the spread of electrical components
for automobiles, the Company is also aiming for growth by developing new
products in the field, such as electrical chargers and in-vehicle motors.
▶Steering and Actuator Business
The Company has positioned the period of the Fifth Mid-Term
Management Plan as the time for sowing the seeds for the next
generation of growth. Aiming to expand the customer base of its
mainstay column-type EPS, the Company will link this to growth over the
duration of the next mid-term management plan by further developing
its rack-type EPS. The Company will also utilize the mechatronics
technologies accumulated in its EPS business to advance the
development of new core products, such as actuators for electric brakes.
Key Initiatives
Respond to Changes in the Business Environment
and Expand Target Fields
Key Initiatives
Reinforce Profit Base
and Establish Platform for Future Growth
Operational Excellence
● Reinforce response capabilities and profitability
● Enhance product development capabilities
Innovate and Challenge
● Concentrate resources on focus sectors
● Create new added value and demand
Operational Excellence
● Expand drivetrain business, achieve growth with accompanying profitability
● Expand customer portfolio for EPS
Innovate and Challenge
● Respond to technology evolution (high efficiency, electrification, autonomous driving)
● Develop lower-assist EPS
Status of Initiatives under the Fifth Mid-Term Management Plan
The Company concluded the fiscal year ended March 31, 2017 (fiscal 2016), the first of the Mid-Term Management Plan, with a recovery in demand that was
projected to be limited actually stronger than expected particularly in the Industrial Machinery Business sectors, such as machine tools and semiconductors.
Although the situation varies depending on the sector, in the fiscal year ending March 31, 2018, it is expected that the gradual recovery trend will continue. Although
the automotive market continues to expand at a moderate pace globally, an adjustment in North American demand and a slowdown in China are expected to take
place. Under such circumstances, in the Industrial Machinery Business, a key initiative is to maximize the expansion of sales in the sectors experiencing
remarkable demand recovery and to strengthen supply management for that purpose. In the Automotive Business, the Company will cover the negative impact of
the EPS model change through the powertrain business, which is expected to increase. The Company is also planning to expand orders for ball screws for electric
brake systems. As a manufacturer that makes products, the Company gives its levels of safety, quality and compliance the highest priority.
Industrial Machinery Business Progress Report
Automotive Business Progress Report
▶Response to Changes in the Business Environment
Although there are fields where the competitive environment is
▶Powertrain Business
In the new application business that is accompanying the shift toward electrification,
intensifying due to the rise of Chinese manufacturers, NSK clarifies its
the level of performance required of bearings is high, and the Company is working
target markets and focuses on areas requiring advanced technologies.
to expand orders by drawing on NSK’s technical capabilities. The Company has also
With regard to the strengthening of cost competitiveness and
productivity, the Company will conduct design reviews and work to
accelerate global procurement.
▶Measures for Focus Sectors
In the railway field, the Company has begun its full-scale entry into the
commenced sales of hub unit bearings that leverage the low friction technologies
for the new, mass production electric vehicle models. To strengthen the production
structure of its AT business, where demand is expanding, the Company will start
operations at a needle roller bearing plant in South Korea and at an AT components
factory in Mexico in the current fiscal year, ending March 2018.
European MRO business and is continuing to expand its sales activities in
▶Steering and Actuator Business
China. To secure stable supplies of machine tools, the Company will
The Company will endeavor to expand its customer base by means of its
strengthen its productivity and procurement capabilities on a global basis.
next-generation column-type EPS. The development of the rack-type EPS is under
▶Creation of New Added Value and Demand
Having newly established a CMS Development Department, the
Company is developing the systems that will become its platform and
promoting efficient and effective technology and product development.
way and on schedule, and the Company will accelerate activities for the gaining of
orders. In addition, the trend for standardization in the mandatory installation of
automatic emergency braking is expanding globally, and following on from
large-scale projects for ball screws for electric brake systems that will enter mass
production in March 2018, the Company is working to further expand orders.
NSK Vision 2026 Setting the Future in Motion
Embark on New Chapter in Evolution Towards Next 100 Years
Operational
Excellence
Sustainable Growth
Deliver new value to society
Work 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
Innovate and
Challenge
Industrial Machinery, Automotive
Safety, Quality, Compliance
The Fifth Mid-Term Management Plan Numerical Targets
Although the recovery in demand over the course of the Fifth Mid-Term
Management Plan is expected to be limited, NSK will continue to take up
the challenge of achieving its previous targets: net sales of ¥1 trillion, an
operating income of ¥100 billion and an operating income margin of 10%.
As far as other management indicators are concerned, NSK will
work to achieve an ROE of 10% or more and a net D/E ratio of 0.3 times in
a bid to improve its capital efficiency and financial stability.
In an effort to secure growth, NSK plans to invest a total of ¥180 billion
over three years. This is expected to exceed depreciation and amortization
by around ¥50 billion, which is projected to come in at ¥130 billion.
Moreover, the Company will also engage in R&D expenditures
totaling ¥80 billion. Moving forward, every effort will be made to put in
place the important intellectual property and human assets necessary to
realize future growth from a mid- to long-term perspective.
(*Based on IFRS)
(*Based on IFRS)
FY2015 (Actual)
FY2018 (Plan)
Net sales
¥975.3 billion
Operating income
¥89.5 billion
Net income
(attributable to owners of the parent)
Operating income margin
ROE
¥65.7 billion
9.2％
14.3％
Net D/E ratio
0.23 times
Exchange rate
US$1 = ¥120
¥133
=
€1
1RMB = ¥18.9
¥1 trillion
¥100 billion
¥70 billion
10.0％
10.0% or more
0.3 times
¥105
US$1 =
= ¥120
€1
1RMB = ¥16.7
The Fifth Mid-Term Management Plan
Capital Expenditure/R&D Expenses
Capital expenditure (including intangible assets)
Operational Excellence
Enhance profitability, reorganize plant
network, improve operational efficiency
Innovate and Challenge
New manufacturing methods, smart factories,
new products and fields
Reinforce Business Base
Safety, security, environment, BCP
R&D expenses
Depreciation and amortization
(*Based on IFRS)
Fourth MTP
(Actual)
Fifth MTP
(Plan)
¥149.0 billion
¥180.0 billion
¥140.0 billion
¥20.0 billion
¥20.0 billion
¥68.5 billion
¥115.3 billion
¥80.0 billion
¥130.0 billion
26
NSK REPORT 2017
NSK REPORT 2017
27
Creating Corporate Value (Growth Strategies)
The Fifth Mid-Term Management Plan
Outline of the Fifth Mid-Term Management Plan
Under the slogan “embark on new chapter in evolution towards
next 100 years” with two key policies of “operational excellence”
together with “innovate and challenge,” NSK is addressing the
three main management tasks of achieving sustainable growth,
reconstructing its profit base and expanding into new growth fields.
Twin Pillars
1. Operational Excellence
By going one step further in leveraging monozukuri, a key ingredient
in our DNA, we are endeavoring to realize more robust front-line
capabilities. In addition, we are pursuing efficiency across all our
manufacturing, sales, technical and administrative functions while
working to raise the competitiveness of core businesses.
2. Innovate and Challenge
This pillar focuses on the creation of new value for the future
through new technologies, products and businesses. By pursuing
operational excellence, the Company will secure the level of
profitability necessary to reinvest in innovation for the next stage of
development, thereby achieving further growth.
Aims and Implementation
1. Sustainable Growth
environmentally friendly society.
2. Reconstruct Profit Base
Through our focus on sustainable growth, NSK will contribute
to the creation of a safe, convenient, comfortable and
Having improved profitability under the Fourth Mid-Term
Management Plan, NSK will make every effort to reconstruct its
business structure and profit base to ensure that the Company’s
foundation is more resilient to changes in its external
environment. At the same time, we will continue our traditional
emphasis on monozukuri and quality while taking care of our
employees and valuing our customers and business partners.
3. Expand into New Growth Fields
In addition to growth through functional and elemental
components that leverage NSK’s core technologies, the
Company is broadening its focus to include the applications,
machinery, equipment and systems that use NSK products. We
will be more proactive in advancing technological development
and marketing designed to enhance these functions.
NSK Vision 2026 Setting the Future in Motion
Embark on New Chapter in Evolution Towards Next 100 Years
Operational
Excellence
Innovate and
Challenge
Sustainable Growth
Deliver new value to society
Work 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
Industrial Machinery, Automotive
Safety, Quality, Compliance
The Fifth Mid-Term Management Plan Numerical Targets
Although the recovery in demand over the course of the Fifth Mid-Term
Management Plan is expected to be limited, NSK will continue to take up
the challenge of achieving its previous targets: net sales of ¥1 trillion, an
operating income of ¥100 billion and an operating income margin of 10%.
In an effort to secure growth, NSK plans to invest a total of ¥180 billion
over three years. This is expected to exceed depreciation and amortization
by around ¥50 billion, which is projected to come in at ¥130 billion.
Moreover, the Company will also engage in R&D expenditures
As far as other management indicators are concerned, NSK will
totaling ¥80 billion. Moving forward, every effort will be made to put in
work to achieve an ROE of 10% or more and a net D/E ratio of 0.3 times in
place the important intellectual property and human assets necessary to
a bid to improve its capital efficiency and financial stability.
realize future growth from a mid- to long-term perspective.
(*Based on IFRS)
(*Based on IFRS)
FY2015 (Actual)
FY2018 (Plan)
Net sales
¥975.3 billion
Operating income
¥89.5 billion
Net income
(attributable to owners of the parent)
Operating income margin
ROE
¥65.7 billion
9.2％
14.3％
¥1 trillion
¥100 billion
¥70 billion
10.0％
Net D/E ratio
0.23 times
0.3 times
Exchange rate
US$1 = ¥120
€1
=
¥133
1RMB = ¥18.9
US$1 =
¥105
€1
= ¥120
1RMB = ¥16.7
The Fifth Mid-Term Management Plan
Capital Expenditure/R&D Expenses
Fourth MTP
Fifth MTP
(Actual)
(Plan)
Capital expenditure (including intangible assets)
¥149.0 billion
¥180.0 billion
(*Based on IFRS)
Operational Excellence
Enhance profitability, reorganize plant
network, improve operational efficiency
Innovate and Challenge
New manufacturing methods, smart factories,
Reinforce Business Base
Safety, security, environment, BCP
¥140.0 billion
¥20.0 billion
¥20.0 billion
R&D expenses
¥68.5 billion
¥80.0 billion
Depreciation and amortization
¥115.3 billion
¥130.0 billion
10.0% or more
new products and fields
Strategies by Business
Industrial Machinery
Automotive
Against a backdrop of factors that include a slowdown in growth in
emerging markets and a downturn in resource prices, the demand
environment for the Industrial Machinery Business is in an adjustment
phase and its future remains uncertain. In contrast, mid- to long-term
technological needs are evolving, and we will engage in the following
key initiatives so that we can meet and grow those needs.
Based on the two main topics of “diversification in automotive power sources” and
the “evolution in vehicle dynamics control,” significant changes in the environment
in which the Automotive Business operates are proceeding at a rapid pace. In
accordance with these changes in the environment, the Company reorganizes the
business into the Automotive Powertrain Division HQ and the Automotive Steering
and Actuator Division HQ and link them to next-generation growth.
Measures Geared toward Key Initiatives
▶Response to Changes in the Business Environment
To rework its competitive edge and improve profitability, the
Company will review quality and costs, work to shorten lead times
and strengthen product appeal.
▶Measures for Focus Sectors
Having cited the infrastructure field, including wind turbines and
railcars; capital goods, including machine tools; and the rapidly
growing fields of robotics and medicine as its focus sectors, the
Company will provide solutions. The Company will also strengthen
the management of its sales channels in the aftermarket field.
▶Creation of New Added Value and Demand
In addition to engaging in the technological development and the
establishment of a business model for a condition monitoring
system (CMS), NSK will focus on developing new products by
harnessing the synergies created by combining bearing and linear
motion technology.
Measures Geared toward Key Initiatives
▶Powertrain Business
The Company will bring about the further evolution of its elemental
technologies for bearings and automatic transmission (AT) products. With
regard to the latter, the Company is anticipating sales expansion boosted
by multistep AT and an increase in business from customers that handle
unit products. Against the backdrop of the spread of electrical components
for automobiles, the Company is also aiming for growth by developing new
products in the field, such as electrical chargers and in-vehicle motors.
▶Steering and Actuator Business
The Company has positioned the period of the Fifth Mid-Term
Management Plan as the time for sowing the seeds for the next
generation of growth. Aiming to expand the customer base of its
mainstay column-type EPS, the Company will link this to growth over the
duration of the next mid-term management plan by further developing
its rack-type EPS. The Company will also utilize the mechatronics
technologies accumulated in its EPS business to advance the
development of new core products, such as actuators for electric brakes.
Key Initiatives
Respond to Changes in the Business Environment
and Expand Target Fields
Key Initiatives
Reinforce Profit Base
and Establish Platform for Future Growth
Operational Excellence
● Reinforce response capabilities and profitability
● Enhance product development capabilities
Innovate and Challenge
● Concentrate resources on focus sectors
● Create new added value and demand
Operational Excellence
● Expand drivetrain business, achieve growth with accompanying profitability
● Expand customer portfolio for EPS
Innovate and Challenge
● Respond to technology evolution (high efficiency, electrification, autonomous driving)
● Develop lower-assist EPS
Status of Initiatives under the Fifth Mid-Term Management Plan
The Company concluded the fiscal year ended March 31, 2017 (fiscal 2016), the first of the Mid-Term Management Plan, with a recovery in demand that was
projected to be limited actually stronger than expected particularly in the Industrial Machinery Business sectors, such as machine tools and semiconductors.
Although the situation varies depending on the sector, in the fiscal year ending March 31, 2018, it is expected that the gradual recovery trend will continue. Although
the automotive market continues to expand at a moderate pace globally, an adjustment in North American demand and a slowdown in China are expected to take
place. Under such circumstances, in the Industrial Machinery Business, a key initiative is to maximize the expansion of sales in the sectors experiencing
remarkable demand recovery and to strengthen supply management for that purpose. In the Automotive Business, the Company will cover the negative impact of
the EPS model change through the powertrain business, which is expected to increase. The Company is also planning to expand orders for ball screws for electric
brake systems. As a manufacturer that makes products, the Company gives its levels of safety, quality and compliance the highest priority.
Industrial Machinery Business Progress Report
Automotive Business Progress Report
▶Response to Changes in the Business Environment
Although there are fields where the competitive environment is
intensifying due to the rise of Chinese manufacturers, NSK clarifies its
target markets and focuses on areas requiring advanced technologies.
With regard to the strengthening of cost competitiveness and
productivity, the Company will conduct design reviews and work to
accelerate global procurement.
▶Measures for Focus Sectors
In the railway field, the Company has begun its full-scale entry into the
European MRO business and is continuing to expand its sales activities in
China. To secure stable supplies of machine tools, the Company will
strengthen its productivity and procurement capabilities on a global basis.
▶Creation of New Added Value and Demand
Having newly established a CMS Development Department, the
Company is developing the systems that will become its platform and
promoting efficient and effective technology and product development.
▶Powertrain Business
In the new application business that is accompanying the shift toward electrification,
the level of performance required of bearings is high, and the Company is working
to expand orders by drawing on NSK’s technical capabilities. The Company has also
commenced sales of hub unit bearings that leverage the low friction technologies
for the new, mass production electric vehicle models. To strengthen the production
structure of its AT business, where demand is expanding, the Company will start
operations at a needle roller bearing plant in South Korea and at an AT components
factory in Mexico in the current fiscal year, ending March 2018.
▶Steering and Actuator Business
The Company will endeavor to expand its customer base by means of its
next-generation column-type EPS. The development of the rack-type EPS is under
way and on schedule, and the Company will accelerate activities for the gaining of
orders. In addition, the trend for standardization in the mandatory installation of
automatic emergency braking is expanding globally, and following on from
large-scale projects for ball screws for electric brake systems that will enter mass
production in March 2018, the Company is working to further expand orders.
26
NSK REPORT 2017
NSK REPORT 2017
27
Corporate Value Results
Review of Operations
Industrial Machinery Business
13/3
14/3
15/3
16/3
17/3
18/3
13/3
14/3
15/3
16/3
17/3
18/3
(Forecast)
(Forecast)
*IFRS standards from 16/3 onwards
Business Overview
The industrial machinery bearings business comprises three
sub-segments: general machinery, which manufactures bearings for
applications in a wide range of industries such as machine tools,
steel plant facilities, railcars, construction machinery, chemical
plants, industrial pumps and wind turbines; electrical and IT
equipment, which includes home appliances, office equipment, hard
disk drives (HDDs) and general-purpose motors; and the aftermarket
business, which provides maintenance and repair services.
Industrial machinery bearings come in a range of sizes, from
bearings with an outer diameter of approximately 2 mm that are
incorporated into ultra-small motors to bearings with an outer
diameter of more than 2 m that are utilized in wind turbines. The
typical household contains around 150 bearings, which are used in
general appliances such as vacuum cleaners and washing machines.
On the other hand, the precision machinery and parts business
manufactures linear motion products and mechatronics products
that are utilized in machine tools, injection molding machines,
transfer machines, and machines for producing semiconductors and
LCD panels. Many NSK products are being put to work in machine
tools in which precise positioning is paramount.
Refer to page 4 of this report for information on our net sales and main products.
Customers
● Machinery manufacturers in Japan and overseas (excluding automotive), distributors
● Large number of customers, wide range of products
Features of
Customers
and NSK
Businesses
● Products for use in general machinery are produced in small lots and many varieties, whereas products
for electrical and IT equipment are mass produced (large volumes of standardized products).
● Products for use in general machinery and the aftermarket include large products with relatively long lead times.
● The aftermarket mainly consists of demand from end users of general machinery for maintenance and repair of facilities
and equipment. It also includes sales of standardized products through distributors. In partnership with distributors, it is
important to avoid lost opportunities by maintaining appropriate inventory levels to ensure immediate delivery.
NSK’s
Competitive
Advantages
● Extensive product lineup as a comprehensive manufacturer
● Technological capabilities based on our four core technologies
● Accumulated expertise in customer needs and technology for a wide range of industries and applications
● Manufacturing, supply and technical support capabilities delivered via a global network
Business Environment
The Industrial Machinery Business is influenced by a range of
factors, including changes in business conditions, movements in
customer demand, the status of competition and technological
innovation. Due to changes in the economic cycle, global demand has
been remained in a slump. However, many industries have seen clear
recoveries starting in the second half of the fiscal year ended March
31, 2017, led by semiconductors and machine tools.
On the other hand, the competitive environment with rival
bearing makers in and outside Japan remains in a severe condition.
Along with clarifying target markets and taking steps to differentiate
itself from rivals mainly in fields that require advanced technologies
in which NSK specializes, NSK will enhance cost competitiveness
and productivity in an effort to adapt to changes in the competitive
environment.
In this market environment, the NSK Group has targeted and
will address two areas under its Fifth Mid-Term Management Plan: 1)
raising its share of infrastructure-related sectors projected to grow in
the medium to long term, such as wind power generation and
railways, and 2) expanding its presence in new fields where high
growth can be expected, such as robotics and medicine.
Refer to page 27 of this report for information on the Mid-Term Management Plan.
276.4
243.0
243.4＊
226.9＊
233.5＊
Net Sales
(¥ Billions)
300
216.1
200
100
0
Operating Income/
Operating Income Margin
■ Operating Income (left)
- Operating Income Margin (right)
(¥ Billions)
12.4
9.8
23.7
6.0
13.0
34.4
8.3
7.5
6.5
20.2＊
17.5＊
14.7＊
(%)
12
10
8
6
4
2
0
50
40
30
20
10
0
A Look Back at the Year Ended March 31, 2017, and the Forecast for the Year Ending March 31, 2018
Expect sales and profits to rise in the year ending March 31, 2018,
as demand recovers after bottoming in the first half of the year ended March 31, 2017.
Global demand in the Industrial Machinery Business had
been weak but is now on a recovery track (albeit uneven by
sector) after bottoming in the second quarter, with
noticeable rebounds being seen mainly for machine tools,
semiconductors and LCDs. Net sales was on par with the
year ended March 31, 2016, on a volume basis, reflecting a
rebound in the second half that offset sluggish sales in the
first half, but ultimately declined due to the strong yen.
Looking at results by region, in Japan sales in the
machine tools sector were weak. In the Americas, sales
recovered in the semiconductor and aftermarket sectors. In
Europe, demand was sluggish centered on the wind power
and aftermarket sectors. In China, sales were solid mainly
in the electrical and railcar sectors. In other Asian
countries, sales rose for semiconductors and LCDs in South
Korea.
As a result, net sales in the Industrial Machinery
Business totaled ¥226.9 billion (a year-on-year decrease of
6.8%), operating income was ¥14.7 billion (a year-on-year
decrease of 27.3%) and the operating income margin was
6.5%. (Results for the year ended March 31, 2016, have been
adjusted retroactively to reflect the transfer of a certain
business domain from the Industrial Machinery Business to
the Automotive Business from the year ended March 31,
2017.)
In the fiscal year ending March 31, 2018, it is expected
that sales will increase gradually as demand recovers, while
sales for precision machinery and parts are expected to
continue to grow solidly throughout the year despite an
expected peak in the semiconductor market. As a result, we
forecast net sales of ¥233.5 billion (a year-on-year increase
of 2.9%), operating income of ¥17.5 billion (a year-on-year
increase of 19.4%) and an operating income margin of 7.5%.
Risks and Opportunities, Future Policies
①Economic Fluctuation Risks
②Globalization and Tough Competitive Environment
The Industrial Machinery Business maintains a presence in
Rapid changes in the market environment, such as an
a wide array of sectors, but business performance tends to
increasingly tough competitive environment and the
be affected by cyclical fluctuations in the overall economic
global expansion of our customers, can be said to present
environment. In addition, the precision machinery and
risks. In particular, there is the possibility that the
parts sector is affected by shifts in demand given its high
intensifying rivalry in emerging markets with local
sales weightings for semiconductor production equipment
manufacturers and those from developed countries will
and machine tools. While these are unavoidable risks for
affect the NSK Group’s business performance. However,
NSK, the Company places emphasis on formulating
accurate estimates of demand, building a production
expanding businesses in emerging markets is a key
challenge concerning the Group’s growth. The Group will
structure and systems that can property address changes in
aim to maintain and expand its global market share and
demand, and bolstering its cost competitiveness. Moreover,
ensure high profitability by devising ways to bolster its
NSK is taking steps to alleviate the impact of demand
declines in fields it is highly dependent on by increasing
competitiveness in areas other than on price, such as by
the expansion of business in fields requiring high-quality
sales weightings in the general machinery and aftermarket
bearings and technical service enhancements.
fields, demand for both of which is broad. Particularly in the
aftermarket field, we are pursuing initiatives to boost the
quality of sales channels while steadily capturing demand in
the MRO (Maintenance, Replacement, Operation) business.
28
NSK REPORT 2017
NSK REPORT 2017
29
Corporate Value Results
Review of Operations
Industrial Machinery Business
Business Overview
The industrial machinery bearings business comprises three
sub-segments: general machinery, which manufactures bearings for
applications in a wide range of industries such as machine tools,
steel plant facilities, railcars, construction machinery, chemical
plants, industrial pumps and wind turbines; electrical and IT
equipment, which includes home appliances, office equipment, hard
disk drives (HDDs) and general-purpose motors; and the aftermarket
business, which provides maintenance and repair services.
diameter of more than 2 m that are utilized in wind turbines. The
typical household contains around 150 bearings, which are used in
general appliances such as vacuum cleaners and washing machines.
On the other hand, the precision machinery and parts business
manufactures linear motion products and mechatronics products
that are utilized in machine tools, injection molding machines,
transfer machines, and machines for producing semiconductors and
LCD panels. Many NSK products are being put to work in machine
Industrial machinery bearings come in a range of sizes, from
tools in which precise positioning is paramount.
bearings with an outer diameter of approximately 2 mm that are
incorporated into ultra-small motors to bearings with an outer
Refer to page 4 of this report for information on our net sales and main products.
Customers
Features of
Customers
and NSK
Businesses
NSK’s
Competitive
Advantages
● Machinery manufacturers in Japan and overseas (excluding automotive), distributors
● Large number of customers, wide range of products
● Products for use in general machinery are produced in small lots and many varieties, whereas products
for electrical and IT equipment are mass produced (large volumes of standardized products).
● Products for use in general machinery and the aftermarket include large products with relatively long lead times.
● The aftermarket mainly consists of demand from end users of general machinery for maintenance and repair of facilities
and equipment. It also includes sales of standardized products through distributors. In partnership with distributors, it is
important to avoid lost opportunities by maintaining appropriate inventory levels to ensure immediate delivery.
● Extensive product lineup as a comprehensive manufacturer
● Technological capabilities based on our four core technologies
● Accumulated expertise in customer needs and technology for a wide range of industries and applications
● Manufacturing, supply and technical support capabilities delivered via a global network
Business Environment
The Industrial Machinery Business is influenced by a range of
factors, including changes in business conditions, movements in
customer demand, the status of competition and technological
innovation. Due to changes in the economic cycle, global demand has
been remained in a slump. However, many industries have seen clear
recoveries starting in the second half of the fiscal year ended March
31, 2017, led by semiconductors and machine tools.
On the other hand, the competitive environment with rival
bearing makers in and outside Japan remains in a severe condition.
Along with clarifying target markets and taking steps to differentiate
itself from rivals mainly in fields that require advanced technologies
in which NSK specializes, NSK will enhance cost competitiveness
and productivity in an effort to adapt to changes in the competitive
environment.
In this market environment, the NSK Group has targeted and
will address two areas under its Fifth Mid-Term Management Plan: 1)
raising its share of infrastructure-related sectors projected to grow in
the medium to long term, such as wind power generation and
railways, and 2) expanding its presence in new fields where high
growth can be expected, such as robotics and medicine.
Refer to page 27 of this report for information on the Mid-Term Management Plan.
Net Sales
(¥ Billions)
300
216.1
276.4
243.0
243.4＊
226.9＊
233.5＊
200
100
0
13/3
14/3
15/3
16/3
17/3
18/3
(Forecast)
Operating Income/
Operating Income Margin
■ Operating Income (left)
- Operating Income Margin (right)
(¥ Billions)
12.4
50
40
30
20
10
0
9.8
23.7
6.0
13.0
34.4
8.3
7.5
6.5
20.2＊
17.5＊
14.7＊
13/3
14/3
15/3
16/3
17/3
18/3
(Forecast)
(%)
12
10
8
6
4
2
0
*IFRS standards from 16/3 onwards
A Look Back at the Year Ended March 31, 2017, and the Forecast for the Year Ending March 31, 2018
Expect sales and profits to rise in the year ending March 31, 2018,
as demand recovers after bottoming in the first half of the year ended March 31, 2017.
Global demand in the Industrial Machinery Business had
been weak but is now on a recovery track (albeit uneven by
sector) after bottoming in the second quarter, with
noticeable rebounds being seen mainly for machine tools,
semiconductors and LCDs. Net sales was on par with the
year ended March 31, 2016, on a volume basis, reflecting a
rebound in the second half that offset sluggish sales in the
first half, but ultimately declined due to the strong yen.
Looking at results by region, in Japan sales in the
machine tools sector were weak. In the Americas, sales
recovered in the semiconductor and aftermarket sectors. In
Europe, demand was sluggish centered on the wind power
and aftermarket sectors. In China, sales were solid mainly
in the electrical and railcar sectors. In other Asian
countries, sales rose for semiconductors and LCDs in South
Korea.
As a result, net sales in the Industrial Machinery
Business totaled ¥226.9 billion (a year-on-year decrease of
6.8%), operating income was ¥14.7 billion (a year-on-year
decrease of 27.3%) and the operating income margin was
6.5%. (Results for the year ended March 31, 2016, have been
adjusted retroactively to reflect the transfer of a certain
business domain from the Industrial Machinery Business to
the Automotive Business from the year ended March 31,
2017.)
In the fiscal year ending March 31, 2018, it is expected
that sales will increase gradually as demand recovers, while
sales for precision machinery and parts are expected to
continue to grow solidly throughout the year despite an
expected peak in the semiconductor market. As a result, we
forecast net sales of ¥233.5 billion (a year-on-year increase
of 2.9%), operating income of ¥17.5 billion (a year-on-year
increase of 19.4%) and an operating income margin of 7.5%.
Risks and Opportunities, Future Policies
①Economic Fluctuation Risks
②Globalization and Tough Competitive Environment
The Industrial Machinery Business maintains a presence in
a wide array of sectors, but business performance tends to
be affected by cyclical fluctuations in the overall economic
environment. In addition, the precision machinery and
parts sector is affected by shifts in demand given its high
sales weightings for semiconductor production equipment
and machine tools. While these are unavoidable risks for
NSK, the Company places emphasis on formulating
accurate estimates of demand, building a production
structure and systems that can property address changes in
demand, and bolstering its cost competitiveness. Moreover,
NSK is taking steps to alleviate the impact of demand
declines in fields it is highly dependent on by increasing
sales weightings in the general machinery and aftermarket
fields, demand for both of which is broad. Particularly in the
aftermarket field, we are pursuing initiatives to boost the
quality of sales channels while steadily capturing demand in
the MRO (Maintenance, Replacement, Operation) business.
Rapid changes in the market environment, such as an
increasingly tough competitive environment and the
global expansion of our customers, can be said to present
risks. In particular, there is the possibility that the
intensifying rivalry in emerging markets with local
manufacturers and those from developed countries will
affect the NSK Group’s business performance. However,
expanding businesses in emerging markets is a key
challenge concerning the Group’s growth. The Group will
aim to maintain and expand its global market share and
ensure high profitability by devising ways to bolster its
competitiveness in areas other than on price, such as by
the expansion of business in fields requiring high-quality
bearings and technical service enhancements.
28
NSK REPORT 2017
NSK REPORT 2017
29
Corporate Value Results
Review of Operations
Automotive Business
Business Overview
To respond to major changes rapidly occurring in automotive technology,
NSK reorganized the structure of its Automotive Business to coincide
with the start of the Fifth Mid-Term Management Plan in 2016. NSK’s
Automotive Business has undergone a change from its previous
organization based on its products to a structure consisting of a
two-division HQ system: the Automotive Powertrain Division
Headquarters, which focuses on bearings and businesses for increasing
efficiency and the trend toward electrification, and the Automotive
Steering & Actuator Division Headquarters, which handles business
areas concerning vehicle dynamics control. Accompanying this
reorganization, a certain business domain overseen by the Industrial
Machinery Business has been transferred to the Powertrain Division
Headquarters to enhance NSK’s ability to meet the needs related to the
electrification of vehicles, which is progressing at a rapid pace.
Structural changes in automobiles from a technical standpoint,
such as power source diversification and the evolution of vehicle
dynamics controls geared toward autonomous driving, are accelerating.
Building on technologies the Company has accumulated up to now, NSK
will contribute to automotive technical innovations through its
components and system products.
Refer to page 5 of this report for information on our net sales and main products.
Customers
● Automakers in Japan and overseas
● Auto component manufacturers in Japan and overseas
Features of
Customers
and NSK
Businesses
● In principle, opportunities to win new orders arise when automakers introduce new vehicle models or undertake a full
model change. According to the schedule of each customer’s new vehicle project, NSK cooperates on development
after being nominated as a development supplier. Development suppliers are generally also responsible for supplying
mass-produced products, and prepare mass production in accordance with the launch schedule for the new vehicle.
● The delivery volume required for a single project has been on the rise as customers employ common platforms and
planned production volumes grow.
● NSK’s net sales are affected by the sales volumes of the car models on the market. In principle, deliveries are based
on the just-in-time system, so inventories are light. However, customers often require that manufacturing take
place near the regions of demand, meaning that the local production ratio is relatively high.
NSK’s
Competitive
Advantages
● Diverse business relationships/customer base among automakers and first-tier auto parts makers
● Global supply capabilities
● Developmental capabilities/technological response capabilities for advances in automobile functions
● Global management systems to focus on meeting the needs of non-Japanese customers
Business Environment
Directly affected by automotive sales around the world and the
production volumes of automakers, the Automotive Business is
influenced by global economic trends. Global automobile production
volumes in the year ended March 31, 2017, were solid, increasing 6%
year on year to 94.1 million vehicles, which was driven by China and
India. Over the medium to long term, global automotive production
volume is forecast to gradually continue expanding toward 100 million
vehicles a year.
Against the backdrop of expansion in automotive production
volume, the sales volumes in the automotive business are also
expected to increase. Accordingly, it is imperative that the Company
successfully respond to technological innovation in the automotive
sector. Based on the business environment assumed in its Fifth
Mid-Term Management Plan, the Company is advancing business
expansion and strengthening profitability by means of a new
organizational structure. In more specific terms, the Company will
expand its lineup of powertrain field–related products, respond to new
application businesses with the shift toward electrification, develop
rack-type electric power steering (EPS) and introduce actuator
products to the market led by ball screws for e-brake boosters.
Refer to page 27 of this report for information on the Mid-Term Management Plan.
Net Sales
(¥ Billions)
800
657.0
590.5
490.5
600
400
200
0
Operating Income/
Operating Income Margin
■ Operating Income (left)
- Operating Income Margin (right)
705.5＊
696.3＊ 698.0＊
(¥ Billions)
100
10.0
10.0
70.8＊
65.7
9.3
9.0
64.6＊ 62.5＊
8.3
49.2
5.1
25.0
80
60
40
20
0
(%)
12
10
8
6
4
2
0
13/3
14/3
15/3
16/3
17/3
18/3
13/3
14/3
15/3
16/3
17/3
18/3
(Forecast)
(Forecast)
*IFRS standards from 16/3
A Look Back at the Year Ended March 31, 2017, and the Forecast for the Year Ending March 31, 2018
In the year ended March 31, 2017, sales increased on a volume basis,
but net sales dipped slightly due to the strong yen, while profit margins remained high.
During the year ended March 31, 2017, the Automotive
Business continued to expand gradually globally, with sales
year-on-year decrease of 1.3%), operating income was ¥64.6
billion (a year-on-year decrease of 8.8%) and the operating
increasing 7% on a volume basis. Looking at results by region,
income margin was 9.3%.
in Japan transmission-related sales were solid. In North
America, despite the market being solid, the Company’s sales
decreased mainly due to the impact of model changes in
vehicles equipped with the Company’s EPS. In Europe, sales
gradually rose as this market recovered. In China, automobile
production increased significantly owing to the impact of
compact car tax incentives there. In other Asian countries,
there were indications of an overall uptrend in sales.
Despite these regional trends, due to the strong yen net
sales in the Automotive Business totaled ¥696.3 billion (a
In the year ending March 31, 2018, the Company forecasts
global automobile production volume to increase 1%, while
there are indications that the North American market has
peaked. Although the Automotive Business has seen EPS
decline as a result of customer vehicle model changes, NSK
targets net sales of ¥698.0 billion (a year-on-year increase of
0.2%), operating income of ¥62.5 billion (a year-on-year
decrease of 3.2%) based on its foreign exchange assumptions
(¥105/$, ¥115/€) and an operating income margin of 9.0%.
Risks and Opportunities, Future Policies
①Automobile Power Source Diversification
In the automotive market, it is forecast that there will be a continuation in the
diversification of power sources from the previous standard gasoline- and
diesel-powered vehicles to hybrids, plug-in hybrids, electric vehicles and fuel
cell vehicles. This will lead to increasing requirements for efficiency
improvements in component performance and further performance
improvements in environmental aspects. Moreover , enhanced safety aspects
and IT developments associated with the evolution of vehicle dynamics controls
such as autonomous driving and ADAS (Advanced Driver Assistance Systems)
are progressing. Although there are risks in these kinds of environmental
changes accompanying these types of innovations in automotive technology,
they can also lead to opportunities to increase our market share.
In response to the comfort, safety and environmental performance
demanded in association with the increased sophistication of automotive
technologies, NSK is adding to its 100 years of business development and
accumulation of expertise and wide-ranging technologies by undertaking
further research and development to achieve further growth in the
Automotive Business.
②EPS demand changes
market share for column-type EPS systems (motors installed in steering
columns) and growth looks promising down the road accompanying rising
compact car demand in emerging markets. However, there is a risk of a
temporary slowing of NSK’s EPS business growth in light of an expected
rise in demand mainly for lower-assist rack-type EPS centered on large
vehicles. Regarding column-type EPS systems, the Company will take
steps to stabilize and strengthen its earnings foundation by expanding its
customer base, while aiming to cultivate medium-term growth drivers by
developing new rack-type EPS systems that leverage NSK’s technological
capabilities.
③Product Liabilities Arising from Recalls and Other Factors
NSK Group products are utilized in many industrial fields and end
products. Particularly for automobiles that require high functionality, in the
event of defects that lead to product liability, there is the risk that this could
lead to the incurrence of significant costs or a decline in the Company’s
social responsibility. In recognition of the importance of quality, the NSK
Group has established systems designed to ensure high quality and
utilizes insurance that allows a certain level of risk cover. Continuing to
redouble its efforts with regard to quality and safety in the years to come,
the Company’s policy is to give these areas sufficient consideration.
In NSK’s strategic product field of EPS, the Company has captured a high
Refer to pages 44–45 of this report for information on quality and safety management.
30
NSK REPORT 2017
NSK REPORT 2017
31
Corporate Value Results
Review of Operations
Net Sales
(¥ Billions)
800
705.5＊
696.3＊ 698.0＊
(¥ Billions)
100
657.0
590.5
490.5
600
400
200
0
Operating Income/
Operating Income Margin
■ Operating Income (left)
- Operating Income Margin (right)
8.3
49.2
5.1
25.0
80
60
40
20
0
10.0
10.0
70.8＊
65.7
9.3
9.0
64.6＊ 62.5＊
(%)
12
10
8
6
4
2
0
17/3
18/3
(Forecast)
*IFRS standards from 16/3
13/3
14/3
15/3
16/3
13/3
14/3
15/3
16/3
17/3
18/3
(Forecast)
Automotive Business
Business Overview
To respond to major changes rapidly occurring in automotive technology,
Machinery Business has been transferred to the Powertrain Division
NSK reorganized the structure of its Automotive Business to coincide
with the start of the Fifth Mid-Term Management Plan in 2016. NSK’s
Automotive Business has undergone a change from its previous
organization based on its products to a structure consisting of a
two-division HQ system: the Automotive Powertrain Division
Headquarters, which focuses on bearings and businesses for increasing
efficiency and the trend toward electrification, and the Automotive
Steering & Actuator Division Headquarters, which handles business
areas concerning vehicle dynamics control. Accompanying this
reorganization, a certain business domain overseen by the Industrial
Headquarters to enhance NSK’s ability to meet the needs related to the
electrification of vehicles, which is progressing at a rapid pace.
Structural changes in automobiles from a technical standpoint,
such as power source diversification and the evolution of vehicle
dynamics controls geared toward autonomous driving, are accelerating.
Building on technologies the Company has accumulated up to now, NSK
will contribute to automotive technical innovations through its
components and system products.
Refer to page 5 of this report for information on our net sales and main products.
Customers
● Automakers in Japan and overseas
● Auto component manufacturers in Japan and overseas
● In principle, opportunities to win new orders arise when automakers introduce new vehicle models or undertake a full
model change. According to the schedule of each customer’s new vehicle project, NSK cooperates on development
after being nominated as a development supplier. Development suppliers are generally also responsible for supplying
mass-produced products, and prepare mass production in accordance with the launch schedule for the new vehicle.
● The delivery volume required for a single project has been on the rise as customers employ common platforms and
planned production volumes grow.
● NSK’s net sales are affected by the sales volumes of the car models on the market. In principle, deliveries are based
on the just-in-time system, so inventories are light. However, customers often require that manufacturing take
place near the regions of demand, meaning that the local production ratio is relatively high.
● Diverse business relationships/customer base among automakers and first-tier auto parts makers
● Global supply capabilities
● Developmental capabilities/technological response capabilities for advances in automobile functions
● Global management systems to focus on meeting the needs of non-Japanese customers
Features of
Customers
and NSK
Businesses
NSK’s
Competitive
Advantages
Business Environment
Directly affected by automotive sales around the world and the
production volumes of automakers, the Automotive Business is
influenced by global economic trends. Global automobile production
volumes in the year ended March 31, 2017, were solid, increasing 6%
year on year to 94.1 million vehicles, which was driven by China and
India. Over the medium to long term, global automotive production
successfully respond to technological innovation in the automotive
sector. Based on the business environment assumed in its Fifth
Mid-Term Management Plan, the Company is advancing business
expansion and strengthening profitability by means of a new
organizational structure. In more specific terms, the Company will
expand its lineup of powertrain field–related products, respond to new
volume is forecast to gradually continue expanding toward 100 million
application businesses with the shift toward electrification, develop
vehicles a year.
Against the backdrop of expansion in automotive production
volume, the sales volumes in the automotive business are also
expected to increase. Accordingly, it is imperative that the Company
30
NSK REPORT 2017
A Look Back at the Year Ended March 31, 2017, and the Forecast for the Year Ending March 31, 2018
In the year ended March 31, 2017, sales increased on a volume basis,
but net sales dipped slightly due to the strong yen, while profit margins remained high.
During the year ended March 31, 2017, the Automotive
Business continued to expand gradually globally, with sales
increasing 7% on a volume basis. Looking at results by region,
in Japan transmission-related sales were solid. In North
America, despite the market being solid, the Company’s sales
decreased mainly due to the impact of model changes in
vehicles equipped with the Company’s EPS. In Europe, sales
gradually rose as this market recovered. In China, automobile
production increased significantly owing to the impact of
compact car tax incentives there. In other Asian countries,
there were indications of an overall uptrend in sales.
Despite these regional trends, due to the strong yen net
sales in the Automotive Business totaled ¥696.3 billion (a
year-on-year decrease of 1.3%), operating income was ¥64.6
billion (a year-on-year decrease of 8.8%) and the operating
income margin was 9.3%.
In the year ending March 31, 2018, the Company forecasts
global automobile production volume to increase 1%, while
there are indications that the North American market has
peaked. Although the Automotive Business has seen EPS
decline as a result of customer vehicle model changes, NSK
targets net sales of ¥698.0 billion (a year-on-year increase of
0.2%), operating income of ¥62.5 billion (a year-on-year
decrease of 3.2%) based on its foreign exchange assumptions
(¥105/$, ¥115/€) and an operating income margin of 9.0%.
Risks and Opportunities, Future Policies
①Automobile Power Source Diversification
In the automotive market, it is forecast that there will be a continuation in the
diversification of power sources from the previous standard gasoline- and
diesel-powered vehicles to hybrids, plug-in hybrids, electric vehicles and fuel
cell vehicles. This will lead to increasing requirements for efficiency
improvements in component performance and further performance
improvements in environmental aspects. Moreover , enhanced safety aspects
and IT developments associated with the evolution of vehicle dynamics controls
such as autonomous driving and ADAS (Advanced Driver Assistance Systems)
are progressing. Although there are risks in these kinds of environmental
changes accompanying these types of innovations in automotive technology,
they can also lead to opportunities to increase our market share.
In response to the comfort, safety and environmental performance
demanded in association with the increased sophistication of automotive
technologies, NSK is adding to its 100 years of business development and
accumulation of expertise and wide-ranging technologies by undertaking
further research and development to achieve further growth in the
Automotive Business.
rack-type electric power steering (EPS) and introduce actuator
products to the market led by ball screws for e-brake boosters.
②EPS demand changes
market share for column-type EPS systems (motors installed in steering
columns) and growth looks promising down the road accompanying rising
compact car demand in emerging markets. However, there is a risk of a
temporary slowing of NSK’s EPS business growth in light of an expected
rise in demand mainly for lower-assist rack-type EPS centered on large
vehicles. Regarding column-type EPS systems, the Company will take
steps to stabilize and strengthen its earnings foundation by expanding its
customer base, while aiming to cultivate medium-term growth drivers by
developing new rack-type EPS systems that leverage NSK’s technological
capabilities.
③Product Liabilities Arising from Recalls and Other Factors
NSK Group products are utilized in many industrial fields and end
products. Particularly for automobiles that require high functionality, in the
event of defects that lead to product liability, there is the risk that this could
lead to the incurrence of significant costs or a decline in the Company’s
social responsibility. In recognition of the importance of quality, the NSK
Group has established systems designed to ensure high quality and
utilizes insurance that allows a certain level of risk cover. Continuing to
redouble its efforts with regard to quality and safety in the years to come,
the Company’s policy is to give these areas sufficient consideration.
Refer to page 27 of this report for information on the Mid-Term Management Plan.
In NSK’s strategic product field of EPS, the Company has captured a high
Refer to pages 44–45 of this report for information on quality and safety management.
NSK REPORT 2017
31
Corporate Value Results
Financial Strategy / Policy on Shareholder Returns
Financial Position
Shareholder Returns
The Company’s financial position for the year ended March 31, 2017, as well as an evaluation and comments on the position
compared with the previous year, are as follows.
Maintaining the target of a sound financial position, the ratio of net worth to total capital was 44.2% and the net D/E ratio was 0.28.
2016/3
2017/3
Year-on-year
comparison
Evaluation and comments
Total assets
¥1,032.4 billion
¥1,044.0 billion
+¥11.6 billion
Expansion in scale of business
Shareholders’ equity
¥454.7 billion
¥461.4 billion
+¥6.7 billion
Retained a portion of profit
Cash and cash
equivalents
¥175.5 billion
¥139.6 billion
–¥35.9 billion
Reduced interest-bearing debt
Acquired ¥15 billion worth of
treasury shares
Interest-bearing debt
¥278.2 billion
¥267.4 billion
–¥10.8 billion
Reduced interest-bearing debt
Ratio of net worth
to total capital
44.0%
44.2%
+0.2
percentage point
Net D/E ratio
0.23 times
0.28 times
+0.05
ROE
14.3％
9.9％
–4.4
percentage point
Due to increase in
shareholders’ equity
Within range of 0.3 times target
in the MTP
Despite a downturn in the profit
decline, we still met the MTP
target of 10% or more.
A Stable Financial Base
The Company plans to conduct growth investment (¥180.0
billion over three years) to achieve medium- to long-term
increases in corporate value and regards the stabilization of
its financial base as paramount to the payment of ongoing
dividends to all shareholders. The Company recognizes that
maintaining an A-level credit rating and a net D/E ratio of
Rating and Investment
Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd.
(JCR)
A
A＋
Growth with Profitability
Generating cash and continued growth by constantly and actively
investing profits and increasing ROE in excess of the investment
return (the cost of capital) expected by shareholders can be
considered the “mission” of a publicly listed company. We believe
achieving a mid-term ROE that exceeds the Company’s cost of
capital̶estimated from past share trends, business
characteristics and the current state of the stock market̶is a
yardstick for capital efficiency, and our Fifth Mid-Term
Management Plan targets ROE of at least 10%.
For the fiscal year ended March 2017, the effects of yen
appreciation and the booking of other operating expenses resulted
in net income falling 31% compared with the previous year, which
in turn resulted in ROE of 9.9%. Although this was down from
14.3% in the fiscal year ended March 2016, it was still close to the
Fifth Mid-Term Management Plan target of about 10%. We believe
maintaining this target over the medium term could contribute to
further improvement in shareholder value.
32
NSK REPORT 2017
around 0.3 times are the minimum base requirements
needed to ensure the Company’s financial stability.
NSK has been able to steadily improve its ability to
generate cash flow over the past 11 years, resulting in a
sharp improvement in the Company’s financial structure.
(Please see the 11-year summary on page 14.) NSK has
received high evaluations from ratings agencies, including
an upgrade to an A rating from Rating and Investment
Information, Inc. (R&I) in August 2014 after being rated A-,
and maintaining an A+ rating from Japan Credit Rating
Agency, Ltd. (JCR), since September 2006.
Stabilization of
the Financial Base
Maintain an A-level credit rating
Net D/E ratio of around 0.3 times
Balance investment
in future growth with
shareholder returns under
a stable financial
structure.
Shareholder
Returns
Dividend payout ratio of
approximately 30%
Growth
with Profitability
ROE of 10% or more
Investment for future growth:
¥180.0 billion/3 years
Acquisition of treasury shares
2007/3
2008/3
2009/3
2010/3
2011/3
2012/3
2013/3
2014/3
2015/3
2016/3
2017/3
- NSK - TOPIX - TOPIX Machinery
*Share price index trends including dividends (March 31, 2007 = 100)
NSK REPORT 2017
33
Alongside growth investment, the Fifth Mid-Term
ratio came to 44%. NSK also acquired ¥15 billion worth of
Management Plan focuses on enhancing returns provided to
treasury shares for the first time in 12 years in May 2016. This
shareholders, and the current plan is the first to set a
numerical dividend payout ratio target̶of approx. 30%.
resulted in a total payout ratio, combining dividends and share
buybacks, of 77% in the fiscal year ended March 2017.
Although net income for the fiscal year ended March 2017
In addition to returning profits through dividends, the
declined compared with the previous year, the Company
Company recognizes share buybacks as one of the choices
decided to pay a cash dividend of ¥38 per share after taking
available in its financial and capital policy. Considering its
into consideration its financial position and such factors as the
financial situation and stock market trends, the Company
continuity of dividends. In addition to a normal dividend of ¥28
would like to proceed with an appropriate and flexible financial
per share, this cash dividend included a ¥10 per share
payment to commemorate the 100th anniversary of the
strategy in the years to come. For the fiscal year ending March
2018, the Company is targeting a cash dividend per share of
Company’s founding. Based on the aforementioned the payout
¥38 (for a payout ratio of 36%).
TSR (Total Shareholders’ Return)
In addition to ROE exceeding the cost of capital, the
dividends, exceeds the cost of capital. Past TSR trends
Company believes it is important that TSR, the total
are as follows. Also, please see the comparison with
return on investment including capital gains and
TOPIX and the TOPIX machinery sector.
NSK’s Share Price Trends (10-Year Period including Dividends)
Share Price Trend (TSR)
Investment
period
NSK
TOPIX
TOPIX
Machinery
1-Year
3-Year
5-Year
10-Year
Cumulative/
annual rate Cumulative
Annual rate
Cumulative
Annual rate
Cumulative
Annual rate
58.3%
59.3%
16.8%
169.9%
22.0%
58.6%
14.7%
33.7%
10.2%
96.2%
14.4%
8.0%
4.7%
0.8%
29.6%
35.0%
10.5%
101.4%
15.0%
35.1%
3.1%
*TSR (Total Shareholders’ Return): Total return on investment including capital gains and dividends
*Annual rate based on the geometric mean
*Created by the Company, based on Bloomberg data
Share Price Fiscal Year Trends (High · Low · Fiscal Year-End · Volatility)
Fiscal Year
High (Yen) Low (Yen) Fiscal Year-end
Volatility
(Yen)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
1,349
1,077
750
836
815
758
1,360
1,815
2,120
1,739
745
282
366
495
458
414
646
1,023
910
691
755
377
738
717
637
715
1,062
1,758
1,030
1,592
42.4%
74.3%
47.6%
37.4%
36.7%
36.5%
45.7%
32.6%
39.0%
44.3%
*Volatility refers to the standard deviation annualized rate based
on the daily closing price.
（Index）
250
200
150
100
50
0
Corporate Value Results
Financial Strategy / Policy on Shareholder Returns
The Company’s financial position for the year ended March 31, 2017, as well as an evaluation and comments on the position
compared with the previous year, are as follows.
Maintaining the target of a sound financial position, the ratio of net worth to total capital was 44.2% and the net D/E ratio was 0.28.
2016/3
2017/3
Evaluation and comments
Year-on-year
comparison
Total assets
¥1,032.4 billion
¥1,044.0 billion
+¥11.6 billion
Expansion in scale of business
Shareholders’ equity
¥454.7 billion
¥461.4 billion
+¥6.7 billion
Retained a portion of profit
Cash and cash
equivalents
¥175.5 billion
¥139.6 billion
–¥35.9 billion
Reduced interest-bearing debt
Acquired ¥15 billion worth of
treasury shares
Interest-bearing debt
¥278.2 billion
¥267.4 billion
–¥10.8 billion
Reduced interest-bearing debt
Ratio of net worth
to total capital
44.0%
44.2%
+0.2
percentage point
Due to increase in
shareholders’ equity
Net D/E ratio
0.23 times
0.28 times
+0.05
–4.4
Within range of 0.3 times target
in the MTP
Despite a downturn in the profit
decline, we still met the MTP
target of 10% or more.
ROE
14.3％
9.9％
percentage point
A Stable Financial Base
The Company plans to conduct growth investment (¥180.0
around 0.3 times are the minimum base requirements
billion over three years) to achieve medium- to long-term
needed to ensure the Company’s financial stability.
increases in corporate value and regards the stabilization of
NSK has been able to steadily improve its ability to
its financial base as paramount to the payment of ongoing
generate cash flow over the past 11 years, resulting in a
dividends to all shareholders. The Company recognizes that
sharp improvement in the Company’s financial structure.
maintaining an A-level credit rating and a net D/E ratio of
(Please see the 11-year summary on page 14.) NSK has
Rating and Investment
Information, Inc. (R&I)
A
Japan Credit Rating Agency, Ltd.
(JCR)
A＋
received high evaluations from ratings agencies, including
an upgrade to an A rating from Rating and Investment
Information, Inc. (R&I) in August 2014 after being rated A-,
and maintaining an A+ rating from Japan Credit Rating
Agency, Ltd. (JCR), since September 2006.
Growth with Profitability
Generating cash and continued growth by constantly and actively
investing profits and increasing ROE in excess of the investment
return (the cost of capital) expected by shareholders can be
considered the “mission” of a publicly listed company. We believe
achieving a mid-term ROE that exceeds the Company’s cost of
capital̶estimated from past share trends, business
characteristics and the current state of the stock market̶is a
yardstick for capital efficiency, and our Fifth Mid-Term
Management Plan targets ROE of at least 10%.
For the fiscal year ended March 2017, the effects of yen
appreciation and the booking of other operating expenses resulted
in net income falling 31% compared with the previous year, which
in turn resulted in ROE of 9.9%. Although this was down from
14.3% in the fiscal year ended March 2016, it was still close to the
Fifth Mid-Term Management Plan target of about 10%. We believe
maintaining this target over the medium term could contribute to
further improvement in shareholder value.
32
NSK REPORT 2017
Stabilization of
the Financial Base
Maintain an A-level credit rating
Net D/E ratio of around 0.3 times
Balance investment
in future growth with
shareholder returns under
a stable financial
structure.
Shareholder
Returns
Dividend payout ratio of
approximately 30%
Acquisition of treasury shares
Growth
with Profitability
ROE of 10% or more
Investment for future growth:
¥180.0 billion/3 years
Financial Position
Shareholder Returns
Alongside growth investment, the Fifth Mid-Term
Management Plan focuses on enhancing returns provided to
shareholders, and the current plan is the first to set a
numerical dividend payout ratio target̶of approx. 30%.
ratio came to 44%. NSK also acquired ¥15 billion worth of
treasury shares for the first time in 12 years in May 2016. This
resulted in a total payout ratio, combining dividends and share
buybacks, of 77% in the fiscal year ended March 2017.
Although net income for the fiscal year ended March 2017
In addition to returning profits through dividends, the
declined compared with the previous year, the Company
decided to pay a cash dividend of ¥38 per share after taking
into consideration its financial position and such factors as the
continuity of dividends. In addition to a normal dividend of ¥28
per share, this cash dividend included a ¥10 per share
payment to commemorate the 100th anniversary of the
Company’s founding. Based on the aforementioned the payout
Company recognizes share buybacks as one of the choices
available in its financial and capital policy. Considering its
financial situation and stock market trends, the Company
would like to proceed with an appropriate and flexible financial
strategy in the years to come. For the fiscal year ending March
2018, the Company is targeting a cash dividend per share of
¥38 (for a payout ratio of 36%).
TSR (Total Shareholders’ Return)
In addition to ROE exceeding the cost of capital, the
Company believes it is important that TSR, the total
return on investment including capital gains and
dividends, exceeds the cost of capital. Past TSR trends
are as follows. Also, please see the comparison with
TOPIX and the TOPIX machinery sector.
NSK’s Share Price Trends (10-Year Period including Dividends)
Share Price Trend (TSR)
Investment
period
1-Year
3-Year
5-Year
10-Year
Cumulative/
annual rate Cumulative
Annual rate
Cumulative
Annual rate
Cumulative
Annual rate
58.3%
59.3%
16.8%
169.9%
22.0%
58.6%
14.7%
33.7%
10.2%
96.2%
14.4%
8.0%
4.7%
0.8%
29.6%
35.0%
10.5%
101.4%
15.0%
35.1%
3.1%
NSK
TOPIX
TOPIX
Machinery
*TSR (Total Shareholders’ Return): Total return on investment including capital gains and dividends
*Annual rate based on the geometric mean
*Created by the Company, based on Bloomberg data
Share Price Fiscal Year Trends (High · Low · Fiscal Year-End · Volatility)
High (Yen) Low (Yen) Fiscal Year-end
Fiscal Year
Volatility
(Yen)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
1,349
1,077
750
836
815
758
1,360
1,815
2,120
1,739
745
282
366
495
458
414
646
1,023
910
691
755
377
738
717
637
715
1,062
1,758
1,030
1,592
42.4%
74.3%
47.6%
37.4%
36.7%
36.5%
45.7%
32.6%
39.0%
44.3%
*Volatility refers to the standard deviation annualized rate based
on the daily closing price.
（Index）
250
200
150
100
50
0
2007/3
2008/3
2009/3
2010/3
2011/3
2012/3
2013/3
2014/3
2015/3
2016/3
2017/3
- NSK - TOPIX - TOPIX Machinery
*Share price index trends including dividends (March 31, 2007 = 100)
NSK REPORT 2017
33
The Underlying Strength of Corporate Value
Fundamental Technologies and R&D
１NSK’s Four Core Technologies
NSK has relentlessly pursued innovative technologies and focused on improving quality in order to contribute to the well-being
and safety of society and to protect the global environment, in line with its corporate philosophy. NSK leads the world in the
product fields of bearings, automotive components and precision machinery and parts. The foundation that underpins those
technologies consists of tribology, materials, numerical simulation and mechatronics, which are NSK’s four core technologies.
The technologies and products that have been created based on our four core technologies are contributing both to the
development of industry across the world and to people’s abundant lifestyles. NSK will continue to engage in advanced
technological development and provide highly functional, high-quality products that meet market needs in the years to come.
Tribology
Materials
Tribology is a technology that controls the friction and wear of
sliding surfaces of materials that are in contact while in relative
motion. This is the key technology for bearings that support the
rotational or linear motion of machinery. The principle of bearings
traces its origin to ancient Assyria, where the method used for
transporting gigantic stones with relative ease involved placing logs
underneath them. It can thus be said that the technology is based on
human wisdom and ingenuity that date back to before the Christian
era. Referred to as the jewels of tribology technologies, bearings are
used in the rotating parts of various machines. Bearings contribute
to reducing friction and friction-induced wear and preventing
machine galling caused by frictional heat while contributing to
energy-saving, long-serving and more reliable machines.
Materials play a key role in enhancing the functionality and durability of
bearings subjected to harsh operating environments.
If there are impurities contained in the bearing materials, these
will cause the bearing to break. For that reason, a special steel known
as bearing steel is used in bearings that is practically free of impurities.
Aiming to develop products with even greater durability and
reliability, NSK uses a wide variety of performance assessments and
analytical technologies to develop new materials with optimal
compositions and new heat treatment processes with optimal
conditions. Moreover, the Company engages in technological
developments in which new materials, such as ceramics and high
polymeric materials, are utilized.
From a mural unearthed at Nineveh, the capital of ancient Assyria
Ceramic ball bearings
Numerical Simulation
Mechatronics
Numerical simulation is an essential technology used in the
optimal design of bearings and product development. For
example, there could be a thousand ways for a parts
combination to meet a certain condition. Finding the optimum
combination would require the making of 1,000 types of trial
products and one million experiments, an enormous amount
of time and funds. Computer simulations, backed by NSK’s 100
years of data from R&D in bearings, help solve difficult
problems like these. Taking advantage of NSK’s advanced
numerical simulation also enables performance evaluations
under which the testing of actual machinery is conducted
under extremely difficult conditions. The diagram below is a
simulation of the oil flow when a tapered roller bearing rotates.
Mechatronics refers to technologies that combine
mechanics and electronics. Placing part of the control of
a machine onto electronic circuits and combining them
with sensors and actuators achieves complex
movements and enables the realization of difficult
functions merely by combining machine elements.
Based on technologies in the mechanical field
fostered through product development and at production
sites, NSK has been honing its proprietary mechatronics
technologies in combination with electronics and
creating new products that exemplify Motion & Control™.
A representative example is electric power steering (EPS).
▶Oil flow analysis of a tapered roller bearing
▶Modularization-compatible, high-performance EPS
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
34
NSK REPORT 2017
NSK REPORT 2017
35
2 Global Technology Platform
Global Development Structure
NSK has a global development structure that has evolved to spur
business expansion and sustain growth while flexibly and rapidly
responding to the diverse needs of its customers around the world.
Engineering Development Division. Also, the divisions identify customer
needs through collaboration with sales engineering staff, the primary
contact point for customers, and technology centers in each region, and
While advancing the development of the four core technologies, product
this information about their needs is reflected back in product
and application development and production is supported in Japan by
development. In addition, we are working to create new businesses
the Core Technology R&D Division, which is in charge of developing new
through the development of products in new fields by letting divisions in
products, and the Manufacturing Engineering Development Division,
which creates and refines production technologies at our manufacturing
bases throughout the world. The Technology Development Divisions for
industrial machinery bearings, precision machinery and parts,
charge operate independently on pioneering developments and
preparing for mass production. NSK operates 15 technology centers in
10 countries, including Japan, North America, South America, Europe,
China, South Korea, ASEAN and India. We have experts in each field in
automotive bearings and automotive components are under the direct
charge of providing solutions to customers. Information from these
control of each business division headquarters, while coordinating
technology centers is shared globally to improve technical services and
closely with the Core Technology R&D Division and the Manufacturing
to develop and propose new products and technologies.
Global Customer Support (Global TC Network)
Japan
North America South America
Europe
China
South Korea
ASEAN
India
New field products development
Automotive products development
Industrial machinery products development
Application Development
Core technology R & D
Manufacturing engineering development
NSK Institute of Technology (NIT)
In November 2007, NSK established the NSK Institute of Technology (NIT).
NIT is a global educational institution that provides opportunities to obtain
knowledge about a broad range of technologies that respond to the needs
of customers and the market while also gaining specialized knowledge by
diving deeper into each field. Going beyond technical theory, the institute
aims to provide a comprehensive education about technologies, from the
application and handling of products to quality management, production
methods and cost management. The curriculum is divided by academic
discipline and has an individual certification system. Classes are provided
In Japan, all academic disciplines require courses in logical thinking
and communications, as well as courses for understanding different
cultures and respecting diversity. In addition to these standard courses,
there is an entire system of courses for English instruction, technology
management training for managers, sales engineer training and quality
knowledge/practical education. Open seminars are held periodically with
outside experts bringing new perspectives. Going beyond technical
education, we focus on nurturing advanced technical personnel who will
have a direct impact on strengthening the competitiveness of NSK’s
at domestic technological divisions and overseas technology centers.
businesses.
▶NIT Education System
NIT standard course: Four-year curriculum mainly for newly graduated engineers (two-year curriculum overseas)
Primary
Engineering
Bearing
Engineering
Steering
Engineering
Precision
Engineering
General
Education
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
Common courses (e.g., different cultures, diversity)
Professional
General
Fourth
year
Third
year
Second
year
First
year
Common courses (e.g., logical thinking and communications)
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
English
education
only
in Japan
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
General education
General education
The Underlying Strength of Corporate Value
Fundamental Technologies and R&D
１NSK’s Four Core Technologies
NSK has relentlessly pursued innovative technologies and focused on improving quality in order to contribute to the well-being
and safety of society and to protect the global environment, in line with its corporate philosophy. NSK leads the world in the
product fields of bearings, automotive components and precision machinery and parts. The foundation that underpins those
technologies consists of tribology, materials, numerical simulation and mechatronics, which are NSK’s four core technologies.
The technologies and products that have been created based on our four core technologies are contributing both to the
development of industry across the world and to people’s abundant lifestyles. NSK will continue to engage in advanced
technological development and provide highly functional, high-quality products that meet market needs in the years to come.
Tribology
Materials
Tribology is a technology that controls the friction and wear of
sliding surfaces of materials that are in contact while in relative
motion. This is the key technology for bearings that support the
rotational or linear motion of machinery. The principle of bearings
traces its origin to ancient Assyria, where the method used for
transporting gigantic stones with relative ease involved placing logs
underneath them. It can thus be said that the technology is based on
human wisdom and ingenuity that date back to before the Christian
era. Referred to as the jewels of tribology technologies, bearings are
used in the rotating parts of various machines. Bearings contribute
to reducing friction and friction-induced wear and preventing
machine galling caused by frictional heat while contributing to
energy-saving, long-serving and more reliable machines.
Materials play a key role in enhancing the functionality and durability of
bearings subjected to harsh operating environments.
If there are impurities contained in the bearing materials, these
will cause the bearing to break. For that reason, a special steel known
as bearing steel is used in bearings that is practically free of impurities.
Aiming to develop products with even greater durability and
reliability, NSK uses a wide variety of performance assessments and
analytical technologies to develop new materials with optimal
compositions and new heat treatment processes with optimal
conditions. Moreover, the Company engages in technological
developments in which new materials, such as ceramics and high
polymeric materials, are utilized.
From a mural unearthed at Nineveh, the capital of ancient Assyria
Ceramic ball bearings
Numerical Simulation
Mechatronics
Numerical simulation is an essential technology used in the
optimal design of bearings and product development. For
example, there could be a thousand ways for a parts
combination to meet a certain condition. Finding the optimum
combination would require the making of 1,000 types of trial
products and one million experiments, an enormous amount
of time and funds. Computer simulations, backed by NSK’s 100
years of data from R&D in bearings, help solve difficult
problems like these. Taking advantage of NSK’s advanced
numerical simulation also enables performance evaluations
under which the testing of actual machinery is conducted
under extremely difficult conditions. The diagram below is a
simulation of the oil flow when a tapered roller bearing rotates.
Mechatronics refers to technologies that combine
mechanics and electronics. Placing part of the control of
a machine onto electronic circuits and combining them
with sensors and actuators achieves complex
movements and enables the realization of difficult
functions merely by combining machine elements.
Based on technologies in the mechanical field
fostered through product development and at production
sites, NSK has been honing its proprietary mechatronics
technologies in combination with electronics and
creating new products that exemplify Motion & Control™.
A representative example is electric power steering (EPS).
▶Oil flow analysis of a tapered roller bearing
▶Modularization-compatible, high-performance EPS
2 Global Technology Platform
Global Development Structure
NSK has a global development structure that has evolved to spur
business expansion and sustain growth while flexibly and rapidly
responding to the diverse needs of its customers around the world.
While advancing the development of the four core technologies, product
and application development and production is supported in Japan by
the Core Technology R&D Division, which is in charge of developing new
products, and the Manufacturing Engineering Development Division,
which creates and refines production technologies at our manufacturing
bases throughout the world. The Technology Development Divisions for
industrial machinery bearings, precision machinery and parts,
automotive bearings and automotive components are under the direct
control of each business division headquarters, while coordinating
closely with the Core Technology R&D Division and the Manufacturing
Engineering Development Division. Also, the divisions identify customer
needs through collaboration with sales engineering staff, the primary
contact point for customers, and technology centers in each region, and
this information about their needs is reflected back in product
development. In addition, we are working to create new businesses
through the development of products in new fields by letting divisions in
charge operate independently on pioneering developments and
preparing for mass production. NSK operates 15 technology centers in
10 countries, including Japan, North America, South America, Europe,
China, South Korea, ASEAN and India. We have experts in each field in
charge of providing solutions to customers. Information from these
technology centers is shared globally to improve technical services and
to develop and propose new products and technologies.
Global Customer Support (Global TC Network)
Japan
North America South America
Europe
China
South Korea
ASEAN
India
New field products development
Automotive products development
Industrial machinery products development
Application Development
Core technology R & D
Manufacturing engineering development
NSK Institute of Technology (NIT)
In November 2007, NSK established the NSK Institute of Technology (NIT).
NIT is a global educational institution that provides opportunities to obtain
knowledge about a broad range of technologies that respond to the needs
of customers and the market while also gaining specialized knowledge by
diving deeper into each field. Going beyond technical theory, the institute
aims to provide a comprehensive education about technologies, from the
application and handling of products to quality management, production
methods and cost management. The curriculum is divided by academic
discipline and has an individual certification system. Classes are provided
at domestic technological divisions and overseas technology centers.
In Japan, all academic disciplines require courses in logical thinking
and communications, as well as courses for understanding different
cultures and respecting diversity. In addition to these standard courses,
there is an entire system of courses for English instruction, technology
management training for managers, sales engineer training and quality
knowledge/practical education. Open seminars are held periodically with
outside experts bringing new perspectives. Going beyond technical
education, we focus on nurturing advanced technical personnel who will
have a direct impact on strengthening the competitiveness of NSK’s
businesses.
▶NIT Education System
NIT standard course: Four-year curriculum mainly for newly graduated engineers (two-year curriculum overseas)
Primary
Engineering
Bearing
Engineering
Steering
Engineering
Precision
Engineering
General
Education
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
Common courses (e.g., different cultures, diversity)
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
Common courses (e.g., logical thinking and communications)
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
General education
Specialized course
Specialized course
Specialized course
Specialized course
Specialized course
General education
Professional
General
Fourth
year
Third
year
Second
year
First
year
English
education
only
in Japan
34
NSK REPORT 2017
NSK REPORT 2017
35
The Underlying Strength of Corporate Value
Fundamental Technologies and R&D
3 R&D Initiatives
Automotive Business ｜ Initiatives to Develop New Products Amid the Shift to Electrification
Initiatives in New Fields
Centered on the themes of the environment and safety, technological innovation in automobiles has accelerated
as companies move aggressively to improve fuel economy while developing control systems for autonomous
vehicles and shifting toward electrification. NSK is proactively developing new technologies to support its next
stage of growth while adapting to these structural changes occurring in the automobile industry.
Leveraging its technologies and expertise, NSK is developing new products that will lead to business in a
variety of new fields. NSK has also announced capital participation in a company that is developing and
deploying personal mobility solutions.
Ball Screws for Electric Braking Systems
Actuators for brakes
Mass production
orders received
● Increasing efficiency of electric braking systems
● Smaller, lighter systems by integrating shaft bearings
and peripheral parts
In automotive braking systems, the brake booster function
(brake pedal amplifier) is expected to become a key electrical
system used not only in hybrid and electric vehicles but also
gasoline- and diesel-powered vehicles, owing to moves to
make automatic emergency braking systems mandatory in
vehicles. While a variety of electric brake boosters exist, the
most promising type are ball screw brake boosters due to
their outstanding responsivity and controllability. Utilizing the
technologies it has accumulated in precision ball screws, NSK
has developed a specification that integrates with bearing.
Mass production orders for this product are growing steadily.
EV Drive Units
Electric drive unit for plug-in hybrid and electric vehicles
● Smaller and lighter drive unit uses an ultra-high-speed
motor and a traction drive speed reducer, allowing
electric vehicles to travel longer distances
As the market for electric vehicles expands, demand for
smaller and lighter electric drive units is growing.
NSK has developed traction drive speed reducer with
its tribology technologies and incorporated other NSK
technologies to create an innovative electric drive unit for
its customers. Traction drive speed reducer uses oil
instead of gears to transfer power. Compared to gear
speed reducer, traction drive speed reducer is quieter and
vibrate less, allowing the drive motor to spin faster and
enabling a smaller electric drive unit.
Transmission-Equipped Wheel Hub Motor
Motor drive unit for each wheel
● Successfully developed a compact wheel hub motor
without compromising driving performance through
the use of a special transmission
Wheel hub motors can be installed on any of the drive wheels.
These drive systems can be applied to the various drive systems of
automobiles, whether they be hybrid vehicles (HEV), electric
vehicles (EV) or fuel cell vehicles (FCV). These next-generation
drive systems are gaining attention for their potential to improve
environmental performance, safety and driving comfort.
NSK has developed technologies for making drive systems
more compact by combining two small motors with a
transmission, and was the first in the world to carry out verification
testing. Based on the knowledge gained from testing the prototype,
we aim to commercialize the components in the system.
［Product Structure］
Manipulation System
Electric Braking System
Ball screws
Systems for manipulating micro substances under microscopes
Bearing
Nut
Balls (screw)
Gear
Ball screws convert the rotational
motion of a motor into linear motion,
generating braking pressure.
［EV Drive Unit Structure］ ■NSK products
High-speed motor
High-speed ball bearing
for e-motor
Next-generation
tapered roller bearing
with plastic cage
Traction drive
speed reducer
Axle unit
［Parts targeted for commercialization］ ■NSK products
Hub unit bearing
with built-in
speed reducer
Miniature cage
and roller bearing
One-way
clutch unit
Anti-corrosion
bearing
［Comparison with Conventional Structure］
Conventional system
Developed system
Tire
Speed
reducer
Single motor
Hollow in
most cases
Single motor
Speed reducer
Tire
Two small
motors
Two motors
Speed
reducer
Transmission
Speed reducer
Transmission
● Biotech: micro-fertilization (ICSI)/inject DNA,
cells into egg cells, /cell transport
● Industrial machinery: removal of foreign materials
from microelectronic parts/high-precision positioning
of semiconductor parts
This manipulation system, which is used in the medical,
biotech, semiconductor and electronics industries, was
developed using NSK’s precision positioning drive
technologies. The latest model features an all-electric
drive system, enabling remote operation, while sharply
reducing operator load by requiring less skill to operate.
LIGHBOT™ Guide Robot
Obstacle avoidance guide robot with navigation function
● Acquired ISO 13482 certification as international safety standard
→ Available for practical use, and began renting in March 2017
● Introduced at the Kanagawa Rehabilitation Center in
Kanagawa Prefecture in March 2017
● Increases convenience for visually impaired and elderly users,
lightens the workload of staff who guide visitors
LIGHBOTTM is a robot that can guide people to a destination
selected on its touch-panel screen, using maps and current
location data to calculate routes and steer around obstacles.
The robot can safely guide people to their destination, including
visually impaired and elderly users when in unfamiliar places
that are easy to get lost in, such as large hospitals.
TOPICS
Next-Generation Personal Mobility
In April 2017, NSK announced a capital participation in WHILL, Inc., based in California, USA.
NSK aims to contribute to a safer, smoother society through its Motion & ControlTM
technology. To this end, NSK and WHILL agreed to collaborate towards the goal of creating
new personal mobility solutions for everyone. WHILL develops personal mobility solutions
with excellent designs and travel distance based on its
mission to deliver fun and innovation to pedestrian travel.
New model
Released in
April 2017
A fusion of WHILL’s mobility
development technologies
and NSK’s fundamental
components and
mechatronics technologies
NSK provides highly reliable
bearings for the Omni-wheel
A
Six large rollers
B
Six small rollers
A
B
Omni-wheel
One large and one small
roller arrange interchangeably
in 12 locations
Each roller uses
four bearings
Number of
bearings in
each personal
mobility
More than
100
36
NSK REPORT 2017
NSK REPORT 2017
37
The Underlying Strength of Corporate Value
Fundamental Technologies and R&D
3 R&D Initiatives
● Increasing efficiency of electric braking systems
● Smaller, lighter systems by integrating shaft bearings
and peripheral parts
In automotive braking systems, the brake booster function
(brake pedal amplifier) is expected to become a key electrical
system used not only in hybrid and electric vehicles but also
gasoline- and diesel-powered vehicles, owing to moves to
make automatic emergency braking systems mandatory in
vehicles. While a variety of electric brake boosters exist, the
most promising type are ball screw brake boosters due to
their outstanding responsivity and controllability. Utilizing the
technologies it has accumulated in precision ball screws, NSK
has developed a specification that integrates with bearing.
Mass production orders for this product are growing steadily.
EV Drive Units
Electric drive unit for plug-in hybrid and electric vehicles
● Smaller and lighter drive unit uses an ultra-high-speed
motor and a traction drive speed reducer, allowing
electric vehicles to travel longer distances
As the market for electric vehicles expands, demand for
smaller and lighter electric drive units is growing.
NSK has developed traction drive speed reducer with
its tribology technologies and incorporated other NSK
technologies to create an innovative electric drive unit for
its customers. Traction drive speed reducer uses oil
instead of gears to transfer power. Compared to gear
speed reducer, traction drive speed reducer is quieter and
vibrate less, allowing the drive motor to spin faster and
enabling a smaller electric drive unit.
Bearing
Nut
Balls (screw)
Gear
Ball screws convert the rotational
motion of a motor into linear motion,
generating braking pressure.
［EV Drive Unit Structure］ ■NSK products
High-speed motor
High-speed ball bearing
for e-motor
Next-generation
tapered roller bearing
with plastic cage
Traction drive
speed reducer
Axle unit
Transmission-Equipped Wheel Hub Motor
［Parts targeted for commercialization］ ■NSK products
Motor drive unit for each wheel
● Successfully developed a compact wheel hub motor
without compromising driving performance through
the use of a special transmission
Hub unit bearing
with built-in
speed reducer
Miniature cage
and roller bearing
One-way
clutch unit
Anti-corrosion
bearing
Wheel hub motors can be installed on any of the drive wheels.
These drive systems can be applied to the various drive systems of
［Comparison with Conventional Structure］
automobiles, whether they be hybrid vehicles (HEV), electric
vehicles (EV) or fuel cell vehicles (FCV). These next-generation
drive systems are gaining attention for their potential to improve
environmental performance, safety and driving comfort.
NSK has developed technologies for making drive systems
more compact by combining two small motors with a
transmission, and was the first in the world to carry out verification
testing. Based on the knowledge gained from testing the prototype,
we aim to commercialize the components in the system.
36
NSK REPORT 2017
Conventional system
Developed system
Tire
Speed
reducer
Single motor
Hollow in
most cases
Single motor
Speed reducer
Tire
Speed
reducer
Transmission
Speed reducer
Two small
motors
Two motors
Transmission
Automotive Business ｜ Initiatives to Develop New Products Amid the Shift to Electrification
Initiatives in New Fields
Centered on the themes of the environment and safety, technological innovation in automobiles has accelerated
as companies move aggressively to improve fuel economy while developing control systems for autonomous
vehicles and shifting toward electrification. NSK is proactively developing new technologies to support its next
stage of growth while adapting to these structural changes occurring in the automobile industry.
Leveraging its technologies and expertise, NSK is developing new products that will lead to business in a
variety of new fields. NSK has also announced capital participation in a company that is developing and
deploying personal mobility solutions.
Ball Screws for Electric Braking Systems
Mass production
orders received
［Product Structure］
Actuators for brakes
Electric Braking System
Ball screws
Manipulation System
Systems for manipulating micro substances under microscopes
● Biotech: micro-fertilization (ICSI)/inject DNA,
cells into egg cells, /cell transport
● Industrial machinery: removal of foreign materials
from microelectronic parts/high-precision positioning
of semiconductor parts
This manipulation system, which is used in the medical,
biotech, semiconductor and electronics industries, was
developed using NSK’s precision positioning drive
technologies. The latest model features an all-electric
drive system, enabling remote operation, while sharply
reducing operator load by requiring less skill to operate.
LIGHBOT™ Guide Robot
Obstacle avoidance guide robot with navigation function
● Acquired ISO 13482 certification as international safety standard
→ Available for practical use, and began renting in March 2017
● Introduced at the Kanagawa Rehabilitation Center in
Kanagawa Prefecture in March 2017
● Increases convenience for visually impaired and elderly users,
lightens the workload of staff who guide visitors
LIGHBOTTM is a robot that can guide people to a destination
selected on its touch-panel screen, using maps and current
location data to calculate routes and steer around obstacles.
The robot can safely guide people to their destination, including
visually impaired and elderly users when in unfamiliar places
that are easy to get lost in, such as large hospitals.
TOPICS
Next-Generation Personal Mobility
In April 2017, NSK announced a capital participation in WHILL, Inc., based in California, USA.
NSK aims to contribute to a safer, smoother society through its Motion & ControlTM
technology. To this end, NSK and WHILL agreed to collaborate towards the goal of creating
new personal mobility solutions for everyone. WHILL develops personal mobility solutions
with excellent designs and travel distance based on its
mission to deliver fun and innovation to pedestrian travel.
New model
Released in
April 2017
A fusion of WHILL’s mobility
development technologies
and NSK’s fundamental
components and
mechatronics technologies
NSK provides highly reliable
bearings for the Omni-wheel
A
Six large rollers
B
Six small rollers
A
B
Omni-wheel
One large and one small
roller arrange interchangeably
in 12 locations
Each roller uses
four bearings
Number of
bearings in
each personal
mobility
More than
100
NSK REPORT 2017
37
The Underlying Strength of Corporate Value
Global Business Platform
In expanding business globally, NSK maintains the necessary sites, human resources and management structure
as an essential foundation, and strives to expand business in each region while promoting global projects through
collaboration between regions. While giving exhaustive consideration to being a good corporate citizen in each
region, the Company is also endeavoring to further enhance and strengthen its global business foundation.
Global Sites
Background to Globalization
Current Status of Global Sites
As far as the Japanese manufacturing industry goes, NSK long has been
advancing overseas expansion. Having continued its overseas exports that
commenced in 1948 and started overseas production in Brazil, the United
States and the United Kingdom in the 1970s, the Company has regarded
these operations as the basis of its overseas business through their locally
manufactured products. In addition to expanding its product lineup in
association with the overseas relocations of its Japanese customers,
primarily in the electrical sector and automobiles from the 1980s onward,
the Company established production sites in China, Indonesia, Thailand,
India and elsewhere against a backdrop of emerging market economic
development at the start of the 1990s. Thereafter, the Company further
increased its global expansion due to a number of factors, including
business expansion in emerging markets, the globalization of automobile
platforms and increased business with non-Japanese overseas customers.
The overseas business currently accounts for nearly 70% of net sales.
As of March 31, 2017, the Company had a total of 210 production,
sales and technology sites in operation in 30 countries under six
headquarters in six countries.
In addition to their responsibilities for developing business in
each area, the respective sites are performing an important role in
global project collaboration, which is currently on the increase. Group
companies supply high-quality products in a stable manner by
undertaking local production in response to customer demand, while
the sales and technology centers in each area work to improve NSK’s
brand power by offering rapid and detailed responses and services to
customers’ various needs. Expanding into every area in the world, the
network represents one of NSK’s essential business foundations.
Japan
日本
3,305億円
¥330.5 billion
3,333
333.3
3,291
329.1
3,288
328.8
3,184
318.4
Sales by Region (Based on Customer Location)
［顧客地域別売上高推移］
China
中国
2,012億円
¥201.2 billion
United
イギリス
Kingdom
Europe
欧州
1,219億円
¥121.9 billion
2,102
210.2
2,044
204.4
1,672
167.2
1,338
133.8
1,318
131.8
1,246
124.6
1,027
102.7
914
91.4
China
中国
Japan
日本
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
India
インド
1,304億円
¥130.4 billion
Other
その他アジア
Asia
1,372
137.2
1,370
137.0
Singapore
シンガポール
1,163
116.3
1,020
102.0
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
Headquarters (●)
6 locations in 6 countries
Production Sites
64 locations in 13 countries
Sales Sites
119 locations in 29 countries
Representative Offices
6 locations in 5 countries
R&D Centers
15 locations in 10 countries
38
NSK REPORT 2017
The Americas
U.S.A.
Canada
Mexico
Brazil
Peru
Argentina
Total
Europe/Middle
East/Africa
U.K.
Germany
France
Italy
Netherlands
Spain
Poland
Russia
Turkey
UAE
South Africa
Total
7
◎ ○ ● ◇ ◆
10
1
1
3
1
5
1
1
21
1
1
1
2
1
1
9
1
1
4
1
4
1
9
2
2
1
1
1
1
3
1
1
1
1
15
2
1
1
1
2
3
Asia/Oceania
Japan
China
Taiwan
South Korea
Singapore
Indonesia
Thailand
Malaysia
Philippines
Vietnam
India
Australia
New Zealand
Total
Global Total
1
21
12
◎ ○ ● ◇ ◆
1
31
6
18
1
1
3
2
2
2
6
4
3
2
2
1
2
1
1
1
9
4
1
83
119
4
46
64
1
4
6
1
1
3
6
1
10
15
◎Headquarters
○Production sites
●Sales sites
◇Representative offices
◆R&D centers
Global Management
Advancement of Global Management
Organizations Supporting Global Management
One of the themes under the Fourth MTP was the
“advancement of global management.” After gaining
Regarding its Industrial Machinery Business and Automotive Business as
its two business axes, NSK has adopted a matrix-type organization
global consistency as the NSK Group, this initiative aimed
underpinned by the regional headquarters in charge of business execution
to build a system to enable the flexible business
management of the local entity in each region.*
in each region and a functional headquarters that supports
cross-organizational business from a functional standpoint.
The Company has taken steps to further enhance both
From the business execution standpoint, a regional headquarters is
its business and functional integration capabilities by
promoting the localization of regional management and
strengthening collaboration between headquarters and
regions through global meetings.
*NSK establishes each site and divides the sites into Japan, the Americas,
Europe, China, ASEAN, India and South Korea by the region in which they
are located.
¥165.2 billion
1,652億円
The
米州
Americas
183.7
1,837
164.8
1,648
The
アメリカ
Americas
134.5
1,345
103.4
1,034
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
positioned to oversee a region under each business headquarters, and
each business site is positioned beneath each regional headquarters. In
this way, directions and directives with regard to business planning and the
execution of strategy are made to flow from the business headquarters to
the regional headquarters and from there to the business sites. On the
other hand, each functional headquarters located at headquarters in
Japan is responsible for functions that are common throughout the entire
Group, such as human resources, legal affairs and accounting, and
oversees and supports from policy and standardization aspects.
The Company is aiming for two effects by having adopted this kind of
organizational form: 1) to reduce the duplication of operations and costs
under a policy that maintains consistency on a global basis with regard to
common functions across the entire Company and, 2) from the business
execution standpoint, to delegate decision making to lower-level
organizations, based on outlines determined by higher-level organizations,
and to enable faster responses.
Automotive Business
Division Headquarters
Industrial Machinery Business
Division Headquarters
Japan
The
Americas
Europe
China
ASEAN
India
South
Korea
Functional Division
Headquarters
Globally Minded Talent
Global Talent Management
Global Posts, Global Management Resources
Under its Management Principles, the NSK Group works “to provide
The NSK Group controls key management personnel posts as global
challenges and opportunities to its employees, utilizing their skills
and encouraging their creativity and individuality.” and “to manage
its business from an international perspective and to develop a
strong presence throughout the world.” In order to achieve business
efficiency from an optimal global viewpoint while promoting the
localization of operations that are spread across the world,
management human resources, who possess global views
posts. This includes the regional key management posts that have
responsibilities for business and functions in each region and global
business as well as key posts of the Japanese headquarters. In the case
of the Asian region and some of the posts, there are instances in which
Japanese employees on assignment fill the posts because of business
features or differences in the expansion period, but as progress with
global management is made, the rate at which local human resources
regardless of their region of origin, and the recruitment and training
are taking up posts is certainly on the rise. In the years to come, amid
of local human resources to support them. are considered
important. For that reason, NSK is aiming for the development of
global talent management by introducing a training program to
select and educate human resources who have the potential to
ongoing responses to changes in the business environment, it is believed
that there will naturally be further advances made in the diversification
of management personnel. The Company will embark on the
streamlining of its systems to ensure excellent human resources and
become key executives as well as a common global succession plan.
smoothly progress with personnel changes between regions and posts.
NSK REPORT 2017
39
The Underlying Strength of Corporate Value
Global Business Platform
In expanding business globally, NSK maintains the necessary sites, human resources and management structure
as an essential foundation, and strives to expand business in each region while promoting global projects through
collaboration between regions. While giving exhaustive consideration to being a good corporate citizen in each
region, the Company is also endeavoring to further enhance and strengthen its global business foundation.
Global Sites
Background to Globalization
Current Status of Global Sites
As far as the Japanese manufacturing industry goes, NSK long has been
advancing overseas expansion. Having continued its overseas exports that
commenced in 1948 and started overseas production in Brazil, the United
States and the United Kingdom in the 1970s, the Company has regarded
As of March 31, 2017, the Company had a total of 210 production,
sales and technology sites in operation in 30 countries under six
headquarters in six countries.
In addition to their responsibilities for developing business in
these operations as the basis of its overseas business through their locally
each area, the respective sites are performing an important role in
manufactured products. In addition to expanding its product lineup in
association with the overseas relocations of its Japanese customers,
primarily in the electrical sector and automobiles from the 1980s onward,
the Company established production sites in China, Indonesia, Thailand,
India and elsewhere against a backdrop of emerging market economic
development at the start of the 1990s. Thereafter, the Company further
increased its global expansion due to a number of factors, including
business expansion in emerging markets, the globalization of automobile
platforms and increased business with non-Japanese overseas customers.
The overseas business currently accounts for nearly 70% of net sales.
global project collaboration, which is currently on the increase. Group
companies supply high-quality products in a stable manner by
undertaking local production in response to customer demand, while
the sales and technology centers in each area work to improve NSK’s
brand power by offering rapid and detailed responses and services to
customers’ various needs. Expanding into every area in the world, the
network represents one of NSK’s essential business foundations.
Japan
日本
¥330.5 billion
3,305億円
333.3
3,333
3,291
329.1
328.8
3,288
318.4
3,184
Sales by Region (Based on Customer Location)
［顧客地域別売上高推移］
China
中国
United
イギリス
Kingdom
Europe
欧州
¥121.9 billion
1,219億円
210.2
2,102
204.4
2,044
1,672
167.2
¥201.2 billion
2,012億円
133.8
1,338
131.8
1,318
1,246
124.6
102.7
1,027
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
91.4
914
India
インド
China
中国
Japan
日本
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
Singapore
シンガポール
¥130.4 billion
1,304億円
Other
その他アジア
Asia
1,372
137.2
1,370
137.0
116.3
1,163
102.0
1,020
Headquarters (●)
6 locations in 6 countries
Production Sites
64 locations in 13 countries
Sales Sites
119 locations in 29 countries
Representative Offices
6 locations in 5 countries
R&D Centers
15 locations in 10 countries
U.S.A.
Canada
Mexico
Brazil
Peru
Argentina
Total
Europe/Middle
East/Africa
U.K.
Germany
France
Italy
Netherlands
Spain
Poland
Russia
Turkey
UAE
South Africa
Total
1
1
1
7
1
1
9
4
1
4
1
1
2
1
1
1
21
1
1
2
10
3
1
5
1
1
2
2
1
1
1
1
3
1
1
1
1
1
9
15
2
3
Japan
China
Taiwan
South Korea
Singapore
Indonesia
Thailand
Malaysia
Philippines
Vietnam
India
Australia
New Zealand
Total
1
1
1
1
4
6
21
12
31
18
2
3
2
2
4
3
2
2
2
6
4
1
9
4
1
46
64
83
119
1
1
1
3
6
6
1
1
1
1
10
15
Global Total
◎Headquarters
○Production sites
●Sales sites
◇Representative offices
◆R&D centers
Global Management
Advancement of Global Management
Organizations Supporting Global Management
One of the themes under the Fourth MTP was the
“advancement of global management.” After gaining
global consistency as the NSK Group, this initiative aimed
to build a system to enable the flexible business
management of the local entity in each region.*
Regarding its Industrial Machinery Business and Automotive Business as
its two business axes, NSK has adopted a matrix-type organization
underpinned by the regional headquarters in charge of business execution
in each region and a functional headquarters that supports
cross-organizational business from a functional standpoint.
The Company has taken steps to further enhance both
From the business execution standpoint, a regional headquarters is
its business and functional integration capabilities by
promoting the localization of regional management and
strengthening collaboration between headquarters and
regions through global meetings.
*NSK establishes each site and divides the sites into Japan, the Americas,
Europe, China, ASEAN, India and South Korea by the region in which they
are located.
¥165.2 billion
1,652億円
The
米州
Americas
183.7
1,837
164.8
1,648
The
アメリカ
Americas
134.5
1,345
103.4
1,034
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
positioned to oversee a region under each business headquarters, and
each business site is positioned beneath each regional headquarters. In
this way, directions and directives with regard to business planning and the
execution of strategy are made to flow from the business headquarters to
the regional headquarters and from there to the business sites. On the
other hand, each functional headquarters located at headquarters in
Japan is responsible for functions that are common throughout the entire
Group, such as human resources, legal affairs and accounting, and
oversees and supports from policy and standardization aspects.
The Company is aiming for two effects by having adopted this kind of
organizational form: 1) to reduce the duplication of operations and costs
under a policy that maintains consistency on a global basis with regard to
common functions across the entire Company and, 2) from the business
execution standpoint, to delegate decision making to lower-level
organizations, based on outlines determined by higher-level organizations,
and to enable faster responses.
Automotive Business
Division Headquarters
Industrial Machinery Business
Division Headquarters
Japan
The
Americas
Europe
China
ASEAN
India
South
Korea
Functional Division
Headquarters
13/3
13/3
14/3
14/3
15/3
15/3
16/3
16/3
17/3
17/3
The Americas
◎ ○ ● ◇ ◆
Asia/Oceania
◎ ○ ● ◇ ◆
Globally Minded Talent
Global Talent Management
Global Posts, Global Management Resources
Under its Management Principles, the NSK Group works “to provide
challenges and opportunities to its employees, utilizing their skills
and encouraging their creativity and individuality.” and “to manage
its business from an international perspective and to develop a
strong presence throughout the world.” In order to achieve business
efficiency from an optimal global viewpoint while promoting the
localization of operations that are spread across the world,
management human resources, who possess global views
regardless of their region of origin, and the recruitment and training
of local human resources to support them. are considered
important. For that reason, NSK is aiming for the development of
global talent management by introducing a training program to
select and educate human resources who have the potential to
become key executives as well as a common global succession plan.
The NSK Group controls key management personnel posts as global
posts. This includes the regional key management posts that have
responsibilities for business and functions in each region and global
business as well as key posts of the Japanese headquarters. In the case
of the Asian region and some of the posts, there are instances in which
Japanese employees on assignment fill the posts because of business
features or differences in the expansion period, but as progress with
global management is made, the rate at which local human resources
are taking up posts is certainly on the rise. In the years to come, amid
ongoing responses to changes in the business environment, it is believed
that there will naturally be further advances made in the diversification
of management personnel. The Company will embark on the
streamlining of its systems to ensure excellent human resources and
smoothly progress with personnel changes between regions and posts.
38
NSK REPORT 2017
NSK REPORT 2017
39
The Underlying Strength of Corporate Value
Global Business Platform (Interview)
Striving to become
a truly global Japanese company,
NSK is strengthening its global business
foundations through the improvement of
administrative functions and increasing diversity.
Question 1
You joined NSK 15 years ago. How has its organisation developed over that time?
NSK has grown significantly over this
period, particularly in its overseas
regions. It now has about two-thirds of
its sales and employees outside Japan.
This growth has been supported by the
globalisation of the company - its
development from a Japanese company
with international operations towards
the goal of being a truly global Japanese
company. By this I mean a company that
can operate as one coherent unit across
the globe, despite the wide geographical
spread of its operations and the diversity
of cultures within it, and retain its
Japanese identity. This development of
NSK as a global company is reflected in
its Global Business Platform (described
on [P. 39]), particularly through the
operation of a matrix structure and the
localisation of regional management.
More than 10 years ago we
established a matrix organisation
structure comprising Business Division
HQs, Regional HQs and Function HQs.
This allows us to combine global and
local perspectives in the management of
the business. It also provides a
structure to support the delegation of
responsibility and decision-making and
to provide common functions, such as
human resources, legal affairs and
accounting, and infrastructure. Again
more than 10 years ago, we fully
localised the management team of our
European regional HQ. We subsequently
did the same in our Americas region
and, more recently, have substantially
localised our management team in
China. Regional managers are involved
in the global management of the
company through the matrix structure.
Localisation of regional management
has, therefore, significantly increased
diversity within the overall management
pool of NSK.
Question 2
Efforts to establish “corporate fundamentals appropriate for a company with sales of 1 trillion Yen”
were started in the Fourth MTP and continue through the Fifth MTP. How do these relate to the globalisation of NSK?
I mentioned that the globalisation of
NSK has supported its growth over the
last few years towards sales of ¥1 trillion.
Regarding organisation structure and
the administrative functions, the actions
being taken to establish corporate
fundamentals include ones to support
further development of the company’s
globalisation and, therefore, future
growth. A ¥1 trillion company with a
wide geographical spread of operations
cannot operate effectively with all
decision-making concentrated at a
central HQ. The challenge is to balance
delegation of responsibilities and
decision-making with proper control.
Globalisation of the company provides
the framework for establishing the
structures, processes and resources
that are required to achieve this in an
efficient and effective way.
As we have already discussed, NSK
has previously implemented some key
requirements, such as a matrix
organisation structure and the
localisation of regional management.
However, there is more that we can do in
these areas. In particular, the Function
HQs generally have substantially more to
do to make the change in mindset and
behaviour from Head Office units to
global HQs and to drive the
standardisation and improvement of
common administrative processes
across our global operations. The
Business Division HQs can further
deepen the global links within their
organisations and there is also more to
be done on the localisation and
strengthening of regional management.
Another key requirement for the
successful operation of the organisation
Senior Vice President
Adrian Browne
Deputy Head of Corporate Strategy
Division Headquarters,
Head of Finance Division Headquarters,
Responsible for IR
structure is clear and effective
communication between all of the
components of the matrix. We have
always relied on communication to
regions as a key management tool.
Whilst this will continue, it is not a
sufficient communication process in a
matrix organisation. So we also have
significantly the information flow in the
company through the improvement and
standardisation of our administrative
infrastructure, including systems and
Tokyo from Japanese staff based in the
actions underway to enhance
processes.
Question 3
Question 4
You mentioned the administrative functions. In your area of responsibility,
what actions are being taken to establish corporate fundamentals and support further globalisation?
A key requirement is the improvement
throughout the company of the quality,
depth, timeliness and accessibility of
financial management information and
analysis. In the past we have allowed a
considerable level of independence in
system selection and design in the
significantly limits our ability to provide
management workload, one of these
comprehensive and standardised
projects is being managed from our
financial management information in a
European regional HQ rather than Tokyo.
timely and efficient way. So we now have
In addition, Finance Division HQ is
global projects underway to achieve our
developing its role as a global Function
requirements through the
HQ and strengthening its links with the
implementation across all operations of
finance functions throughout the
regions. Consequently, we have many
new standardised accounting and
different financial systems with varying
costing systems and financial
company, including the development of
opportunities for inter-regional staff
levels of functionality. This environment
management processes. To spread the
transfers.
What other challenges is NSK addressing in its efforts to become a truly global Japanese company?
One challenge is to extend the diversity
for NSK, it does bring challenges. A key
training processes. We also need to use
of nationalities in our management. As
one is cultural differences. We must
already discussed, we have increased
retain our Japanese core identity as a
the cross-cultural experience that
comes with diversity to support our
the diversity of our overall management
company but also operate effectively as
efforts to encourage a more proactive
pool by localising regional management.
a team of many national cultures. This
mindset and a reduction in extreme risk
The next step is to expand the
requires adaptability from our managers
aversion in our staff. Finally, in a large,
opportunities for inter-regional transfers
and other staff working with colleagues
diverse company we face the challenge
of managers, to increase diversity within
from different countries. It also requires
of maintaining a common global
regions, including Japan, and at various
some understanding by them of cultural
purpose – we can achieve this through
differences and their practical impact.
adherence to our Mission Statement and
levels within our businesses and
functions. However, whilst we strongly
believe that such diversity is beneficial
Our global HR function is including
these matters in its development and
Vision 2026.
40
NSK REPORT 2017
NSK REPORT 2017
41
The Underlying Strength of Corporate Value
Global Business Platform (Interview)
Striving to become
a truly global Japanese company,
NSK is strengthening its global business
foundations through the improvement of
administrative functions and increasing diversity.
You joined NSK 15 years ago. How has its organisation developed over that time?
NSK has grown significantly over this
NSK as a global company is reflected in
human resources, legal affairs and
period, particularly in its overseas
its Global Business Platform (described
accounting, and infrastructure. Again
regions. It now has about two-thirds of
on [P. 39]), particularly through the
more than 10 years ago, we fully
its sales and employees outside Japan.
operation of a matrix structure and the
localised the management team of our
This growth has been supported by the
localisation of regional management.
European regional HQ. We subsequently
globalisation of the company - its
More than 10 years ago we
development from a Japanese company
established a matrix organisation
did the same in our Americas region
and, more recently, have substantially
with international operations towards
structure comprising Business Division
localised our management team in
the goal of being a truly global Japanese
HQs, Regional HQs and Function HQs.
China. Regional managers are involved
company. By this I mean a company that
This allows us to combine global and
in the global management of the
can operate as one coherent unit across
local perspectives in the management of
company through the matrix structure.
the globe, despite the wide geographical
the business. It also provides a
spread of its operations and the diversity
structure to support the delegation of
Localisation of regional management
has, therefore, significantly increased
of cultures within it, and retain its
responsibility and decision-making and
diversity within the overall management
Japanese identity. This development of
to provide common functions, such as
pool of NSK.
Question 1
Question 2
Efforts to establish “corporate fundamentals appropriate for a company with sales of 1 trillion Yen”
were started in the Fourth MTP and continue through the Fifth MTP. How do these relate to the globalisation of NSK?
I mentioned that the globalisation of
delegation of responsibilities and
HQs generally have substantially more to
NSK has supported its growth over the
decision-making with proper control.
do to make the change in mindset and
last few years towards sales of ¥1 trillion.
Globalisation of the company provides
behaviour from Head Office units to
Regarding organisation structure and
the framework for establishing the
global HQs and to drive the
the administrative functions, the actions
structures, processes and resources
being taken to establish corporate
fundamentals include ones to support
further development of the company’s
globalisation and, therefore, future
growth. A ¥1 trillion company with a
wide geographical spread of operations
cannot operate effectively with all
decision-making concentrated at a
that are required to achieve this in an
efficient and effective way.
standardisation and improvement of
common administrative processes
across our global operations. The
As we have already discussed, NSK
Business Division HQs can further
has previously implemented some key
deepen the global links within their
requirements, such as a matrix
organisation structure and the
organisations and there is also more to
be done on the localisation and
localisation of regional management.
strengthening of regional management.
However, there is more that we can do in
Another key requirement for the
central HQ. The challenge is to balance
these areas. In particular, the Function
successful operation of the organisation
Senior Vice President
Adrian Browne
Deputy Head of Corporate Strategy
Division Headquarters,
Head of Finance Division Headquarters,
Responsible for IR
structure is clear and effective
communication between all of the
components of the matrix. We have
always relied on communication to
Tokyo from Japanese staff based in the
regions as a key management tool.
Whilst this will continue, it is not a
sufficient communication process in a
matrix organisation. So we also have
actions underway to enhance
significantly the information flow in the
company through the improvement and
standardisation of our administrative
infrastructure, including systems and
processes.
Question 3
You mentioned the administrative functions. In your area of responsibility,
what actions are being taken to establish corporate fundamentals and support further globalisation?
A key requirement is the improvement
throughout the company of the quality,
depth, timeliness and accessibility of
financial management information and
analysis. In the past we have allowed a
considerable level of independence in
system selection and design in the
regions. Consequently, we have many
different financial systems with varying
levels of functionality. This environment
significantly limits our ability to provide
comprehensive and standardised
financial management information in a
timely and efficient way. So we now have
global projects underway to achieve our
requirements through the
implementation across all operations of
new standardised accounting and
costing systems and financial
management processes. To spread the
management workload, one of these
projects is being managed from our
European regional HQ rather than Tokyo.
In addition, Finance Division HQ is
developing its role as a global Function
HQ and strengthening its links with the
finance functions throughout the
company, including the development of
opportunities for inter-regional staff
transfers.
Question 4
What other challenges is NSK addressing in its efforts to become a truly global Japanese company?
One challenge is to extend the diversity
of nationalities in our management. As
already discussed, we have increased
the diversity of our overall management
pool by localising regional management.
The next step is to expand the
opportunities for inter-regional transfers
of managers, to increase diversity within
regions, including Japan, and at various
levels within our businesses and
functions. However, whilst we strongly
believe that such diversity is beneficial
for NSK, it does bring challenges. A key
one is cultural differences. We must
retain our Japanese core identity as a
company but also operate effectively as
a team of many national cultures. This
requires adaptability from our managers
and other staff working with colleagues
from different countries. It also requires
some understanding by them of cultural
differences and their practical impact.
Our global HR function is including
these matters in its development and
training processes. We also need to use
the cross-cultural experience that
comes with diversity to support our
efforts to encourage a more proactive
mindset and a reduction in extreme risk
aversion in our staff. Finally, in a large,
diverse company we face the challenge
of maintaining a common global
purpose – we can achieve this through
adherence to our Mission Statement and
Vision 2026.
40
NSK REPORT 2017
NSK REPORT 2017
41
The Underlying Strength of Corporate Value
CSR / ESG Management
The NSK Group’s View of CSR
In 2015, the United Nations adopted the 2030 Agenda for Sustainable Development along with the Sustainable Development
Goals (SDGs), which are the goals under the Agenda. To achieve the SDGs, governments, companies, and citizens are called
upon to join forces to solve problems facing global society, including the eradication of poverty, reduction of inequality, and
protection of the global environment, while also pursuing prosperity.
Relationship with the Global Community
NSK Group Stakeholders
NSK respects and takes into consideration international norms such as the SDGs, which are the global
community’s shared goals, adopted at the United Nations. It is NSK’s management policy and commitment
always to think and take action with a global outlook.
Sustainable
Society
Improved
Corporate
Value of the
NSK Group
NSK’s CSR Activities
and Material Issues
NSK’s CSR Activities and Value Created
DRIVER
CSR/ESG
Management
Environmental Initiatives
Social Initiatives
● Environmental Management (P. 46)
Activities Aimed at Protecting
the Global Environment
● Creating Environmentally
Friendly Products
● Global Warming
Countermeasures
● Measures for Resource
Conservation and Recycling
● Reducing Use of Environmentally
Harmful Substances
● Biodiversity Conservation
● Research and Development
● Quality Management (P. 44)
Creating Quality that Can Be
Trusted
● Safety Management (P. 45)
Creating Safe and Healthy
Workplaces
● Human Resource Management
(P. 48)
Creating a Dynamic Work
Environment
● Working with Local Communities
42
NSK REPORT 2017
NSK REPORT 2017
43
NSK clearly avows in its mission statement that “creating a safer, smoother society” and “protecting the global
environment” are integral factors in all company operations. NSK officers and employees are firmly aware of NSK’s roles
and responsibilities, and embraces our vision to contribute to the societies of today and tomorrow. The entire NSK team is
working sincerely to expand the reach of our businesses and make social contributions in line with stakeholder expectations.
The NSK Group will continue to pursue higher corporate value and sustainable growth through comprehensive CSR efforts.
The NSK Group’s business is built on the trust of a variety of stakeholders. The NSK Group believes that
active communication is the key to building better relationships with its stakeholders.
Customers
Employees
The NSK Group’s customers are companies that
purchase NSK’s products and also the end users of the
devices and machines that incorporate NSK’s products.
Employees, who create NSK’s superior technology, services, and
safe and high-quality products, are the foundation of its business
success. Accordingly, the Group aims to create workplaces where
The Group aims to earn customer satisfaction with safe
all employees can work with enthusiasm. Toward that end, the
and high-quality products and services that meet
customer needs, and seeks customer input through
technology exchanges and everyday sales contacts.
company’s current situation and workplace issues are shared in
constructive dialgues between labor and management and in
communication among employees in an effort to solve issues
through labor-management and inter-departmental cooperation.
Suppliers
Local Communities
The NSK Group’s business is dependent upon numerous
The NSK Group’s activities depend upon the
suppliers. The Group aims to ensure mutual growth by
sharing with suppliers the needs of its customers and
understanding of the members of the communities in
which it does business. The Group aims to be valued as
other stakeholders via procurement policy briefings and the
a member of local communities by building more
routine exchange of information and by cooperating with
suppliers on initiatives such as technology development,
quality improvement, the environment, and safety.
mutual understanding through good communication
with the members of the communities, understanding
their needs, and contributing to their development.
Shareholders and Investors
Future Generations
Shareholders and investors are important stakeholders, and
The NSK Group sees children and students, the
they expect the NSK Group to keep growing. The NSK Group
torchbearers of the future, as important stakeholders.
seeks to obtain their understanding by disclosing business
The Group is working to one day hand over a rich
and financial information in a timely and appropriate manner.
environment and safe society to the next generation
To ensure sustainable growth and increase corporate value,
and to help build a more sustainable society by
the Group seeks to increase the transparency and soundness
supporting the growth of future generations through
of management and to practice business that is
well-balanced in terms of the society and environment.
programs such as science classes and internships.
●Material Issues
Governance Initiatives
● Corporate Governance (P. 51)
Realizing Highly Transparent,
Sound Management
● Compliance (P. 55)
Fostering Trust as a Company
● Risk Management
For details, please refer to the following NSK website for
“Business Risks and Other Risk Factors.”
http://www.nsk.com/investors/management/risk.html
● Supply Chain Management (P. 50)
Fair and Impartial Procurement
Value Created
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Contribution to an advanced technological society
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
CSR/ESG ManagementDRIVER The Fifth Mid-TermManagement PlanGlobal BusinessPlatformOverseas DevelopmentCapabilitiesNSK’s Business ActivitiesSales/AftermarketFeedbackR&DReceipt ofOrdersMass Production Design/PreparationProcurementManufacturingSafetyQualityComplianceDRIVER DRIVER Four Core TechnologiesDRIVER ( )
The Underlying Strength of Corporate Value
CSR / ESG Management
The NSK Group’s View of CSR
NSK respects and takes into consideration international norms such as the SDGs, which are the global
community’s shared goals, adopted at the United Nations. It is NSK’s management policy and commitment
always to think and take action with a global outlook.
In 2015, the United Nations adopted the 2030 Agenda for Sustainable Development along with the Sustainable Development
Goals (SDGs), which are the goals under the Agenda. To achieve the SDGs, governments, companies, and citizens are called
upon to join forces to solve problems facing global society, including the eradication of poverty, reduction of inequality, and
protection of the global environment, while also pursuing prosperity.
NSK clearly avows in its mission statement that “creating a safer, smoother society” and “protecting the global
environment” are integral factors in all company operations. NSK officers and employees are firmly aware of NSK’s roles
and responsibilities, and embraces our vision to contribute to the societies of today and tomorrow. The entire NSK team is
working sincerely to expand the reach of our businesses and make social contributions in line with stakeholder expectations.
The NSK Group will continue to pursue higher corporate value and sustainable growth through comprehensive CSR efforts.
Relationship with the Global Community
NSK Group Stakeholders
The NSK Group’s business is built on the trust of a variety of stakeholders. The NSK Group believes that
active communication is the key to building better relationships with its stakeholders.
Customers
The NSK Group’s customers are companies that
purchase NSK’s products and also the end users of the
devices and machines that incorporate NSK’s products.
The Group aims to earn customer satisfaction with safe
and high-quality products and services that meet
customer needs, and seeks customer input through
technology exchanges and everyday sales contacts.
Employees
Employees, who create NSK’s superior technology, services, and
safe and high-quality products, are the foundation of its business
success. Accordingly, the Group aims to create workplaces where
all employees can work with enthusiasm. Toward that end, the
company’s current situation and workplace issues are shared in
constructive dialgues between labor and management and in
communication among employees in an effort to solve issues
through labor-management and inter-departmental cooperation.
Suppliers
The NSK Group’s business is dependent upon numerous
suppliers. The Group aims to ensure mutual growth by
sharing with suppliers the needs of its customers and
other stakeholders via procurement policy briefings and the
routine exchange of information and by cooperating with
suppliers on initiatives such as technology development,
quality improvement, the environment, and safety.
Local Communities
The NSK Group’s activities depend upon the
understanding of the members of the communities in
which it does business. The Group aims to be valued as
a member of local communities by building more
mutual understanding through good communication
with the members of the communities, understanding
their needs, and contributing to their development.
Shareholders and Investors
Shareholders and investors are important stakeholders, and
they expect the NSK Group to keep growing. The NSK Group
seeks to obtain their understanding by disclosing business
and financial information in a timely and appropriate manner.
To ensure sustainable growth and increase corporate value,
the Group seeks to increase the transparency and soundness
of management and to practice business that is
well-balanced in terms of the society and environment.
Future Generations
The NSK Group sees children and students, the
torchbearers of the future, as important stakeholders.
The Group is working to one day hand over a rich
environment and safe society to the next generation
and to help build a more sustainable society by
supporting the growth of future generations through
programs such as science classes and internships.
Sustainable
Society
Improved
Corporate
Value of the
NSK Group
NSK’s CSR Activities
and Material Issues
NSK’s CSR Activities and Value Created
DRIVER
CSR/ESG
Management
Environmental Initiatives
Social Initiatives
● Environmental Management (P. 46)
● Research and Development
Activities Aimed at Protecting
the Global Environment
● Quality Management (P. 44)
Creating Quality that Can Be
● Creating Environmentally
Trusted
Friendly Products
● Global Warming
Countermeasures
● Measures for Resource
Conservation and Recycling
● Reducing Use of Environmentally
Harmful Substances
● Biodiversity Conservation
● Safety Management (P. 45)
Creating Safe and Healthy
Workplaces
● Human Resource Management
(P. 48)
Creating a Dynamic Work
Environment
● Working with Local Communities
●Material Issues
Governance Initiatives
● Corporate Governance (P. 51)
Realizing Highly Transparent,
Sound Management
● Compliance (P. 55)
Fostering Trust as a Company
● Risk Management
For details, please refer to the following NSK website for
“Business Risks and Other Risk Factors.”
http://www.nsk.com/investors/management/risk.html
● Supply Chain Management (P. 50)
Fair and Impartial Procurement
Value Created
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Contribution to an advanced technological society
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
42
NSK REPORT 2017
NSK REPORT 2017
43
CSR/ESG ManagementDRIVER The Fifth Mid-TermManagement PlanGlobal BusinessPlatformOverseas DevelopmentCapabilitiesNSK’s Business ActivitiesSales/AftermarketFeedbackR&DReceipt ofOrdersMass Production Design/PreparationProcurementManufacturingSafetyQualityComplianceDRIVER DRIVER Four Core TechnologiesDRIVER ( )
The Underlying Strength of Corporate Value
CSR / ESG Management
Material CSR Issues
１
Quality Management
To Build Quality into Each Process, the Company Is Promoting the NSK Product Development System (NPDS).
Creating Quality that Can Be Trusted
NSK’s Approach
NSK aims to become “No. 1 in Total Quality.” In other words, the
Company is working to achieve the industry’s best quality in
everything it delivers̶not only products and services but also
information. NSK believes that this commitment to quality
ensures that its products will satisfy customers all over the world.
In specific terms, the Company will endeavor to enhance the
quality of its products, work and human resources, key elements
that provide the underlying strength of its business activities, while
at the same time incorporating the necessary quality to deliver
attractive products that reflect the requirements of customers.
Quality Assurance Vision 2026
To strengthen Group-wide initiatives, NSK’s management checks
the status of quality control and directs all necessary measures in
a top-down manner through meetings of the Quality Board, which
is chaired by the president and composed of directors in charge of
each business division headquarters. In 2015, NSK put in place the
Quality Assurance Vision 2026 as a part of efforts to identify
specific targets through to 2026. As indicated at the right of the
page, this vision also clarifies the ideal state to which the Company
aspires. Guided by this vision, NSK will work diligently to achieve a
level of “NSK Quality” that engenders trust and contributes to the
peace of mind and safety of customers.
NSK Quality
Safety/Smartness/Confidence for Customer
[Customer 1st] [100% conforming article]
The Ideal State to which the Company Aspires
● Social contribution by product quality
● Quality constitution appraised by customers
● All employees think and act based on the
quality-first principle under high-quality ethics
The Fifth Mid-Term Management Plan
(FY2016 to FY2018)
1. Fostering quality-first culture and human development
2. Enhancing preventive measures for quality
monitoring and audit
3. Establishing a field quality responsibility system
4. Reasserting strict adherence to quality control basic matters
5. Enhancing site control ability based on 5 GEN-Principle*
*A set of Japanese principles that focus on“GEN-ba,” the ACTUAL
frontline; “GEN-butsu,” the ACTUAL item or product; “GEN-jitsu,”
the ACTUAL condition or situation; “GEN-ri,” the ACTUAL principle
or theory; and “GEN-soku,” the ACTUAL rules or standards.
Initiatives to Achieve Higher Quality
Fiscal 2016 Quality Priority Policies
Evaluation
Achieved, Partially Achieved, Not Achieved
1. Returning to the basics of the quality-first principle with full
employee participation in quality awareness improvement activities
2. Correcting processes that have gone as far as quality as
a starting point for preventing any recurrences
3. Receiving feedback from field (market) quality to design and
increase the sophistication of active application technology
4. Re-streamlining systematic quality regulations and
implement practical education
5. Implementing on-the-spot improvements by rank-based
site visits and onsite interactive communication
NSK classifies quality into four categories: the field
quality, design quality, manufacturing quality, and quality
of supplier components, and strives to enhance the
standard of each.
As a measure to enhance field quality, we are working
to establish a structure capable of proposing products and
services that meet not only the quality standards that our
customers demand but also the needs of the wider society.
To enhance our design standards and deliver even
higher quality products, we use our knowledge and
experience to establish voluntary internal targets that go
beyond the basic quality levels our customers require.
We also develop manufacturing processes that focus
on the 4Ms (manpower, machinery, materials and
methods) in order to further improve product quality.
To make high quality products, we need to ensure the
parts and materials we use are also of the highest quality.
To this end, NSK works with its suppliers to conduct
quality improvement initiatives.
(Refer to page 5.)
44
NSK REPORT 2017
Field Quality
Supplier Quality
Initiatives Aimed at
Enhancing Quality
Design Quality
Manufacturing
Quality
▶Degree of Customer Satisfaction (with FY2012 as a base of 100)
110
100
90
80
70
0
100
99.8
104.8
105.6
106.7
2012
(Base FY)
2013
2014
2015
2016
(FY)
This system is used for new projects and is designed to
moving on to the next stage. Moving forward, NSK will
achieve efficient mass production of high-quality products
globally deploy its innovative NPDS quality management
by solving problems at key points in each process before
system.
Process
Product
planning
Development
and design
Prototype
manufacture
Pilot
production
Pilot mass
production
Mass
production
▶Outline of NPDS
Specialists perform rigorous and
objective checks to confirm these items
Confirmation items
Determining whether to
move on to the next process
Can the product be
designed to satisfy
customer needs?
Can it be processed
and assembled
according to the
design?
Can it be processed
and assembled using
the intended methods
in mass production?
Can it be processed
and assembled using
the same methods in
mass production?
Can it be
stably mass
produced?
Material CSR Issues
2
Safety Management
Creating Safe and Healthy Workplaces
NSK’s Approach
To protect the safety and health of each and every employee, NSK
undertakes initiatives with the following basic philosophy: “Safety is
the first and foremost priority.”
Striving to ensure workplace safety, the Company implements
measures to address unsafe equipment and facilities while
promoting a set of uniform global standards across the Group as a
whole. At the same time, proactive measures are being taken to
share information with employees and to ferment a culture in which
workers openly caution each other through mutual education.
Occupational Safety and Health Management
NSK realizes how important it is to be proactive about safety and
health at its workplaces, which support the Company’s
manufacturing operations, and to provide a work environment that
allows all employees to reach their full potential. Based on this
conviction, we are building a proprietary occupational safety and
health management system that complies with OHSAS 18001 and
other related regulations while striving to foster a “safety first”
corporate culture that fully engages all employees at each site.
In fiscal 2016, we organized a Safety and Fire Prevention
Committee that is chaired by the CEO. In addition to providing a
forum to discuss safety on a global basis and unify the Company’s
policy, the committee shares best practices from each region while
working to create safer and more accommodating workplaces.
Overview of Activities and Main Initiatives in Fiscal 2016
In fiscal 2016, only a 5% reduction was achieved in the number of
occupational accidents for the entire Group against the target of a 25%
reduction compared to the previous fiscal year. In addition, we take the
fact that one major fire occurred extremely seriously and are redoubling
our efforts to establish measures to prevent serious accidents.
Main Initiatives in Fiscal 2016
● Promotion of risk assessments covering machine safety
● Rollout of “point and call” safety training
● Identification of areas where slippage risk is present and implementation
of countermeasures, display of risk maps showing hazardous locations
● Organizational enhancements (establishment of Safety and
Fire-Prevention Enhancement Committee chaired by the CEO)
● Standardization of safety training
▶Global Safety and Fire-Prevention Management System
President and CEO
Manufacturing Strategy
Division HQ
Safety and Fire-Prevention
Enhancement Office
Safety and Fire-Prevention
Enhancement Committee
The Americas
Europe
China
ASEAN/
Oceania
India
Persons responsible
for safety in the region
Persons responsible
for safety in region
Persons responsible
for safety in China
Persons responsible
for safety in the region
Persons responsible
for safety in India
Each plant
in Japan
Those responsible
for safety
Each plant
Each plant
Each plant
Each plant
Each plant
Those responsible
Those responsible
Those responsible
Those responsible
Those responsible
for safety
for safety
for safety
for safety
for safety
▶Occupational Safety and Health Management System
Announcement of safety and
health policy by management
Act
Continuous
improvement
Spiral up
Do
Plan
Check
Review
Basic elements
of system
● Reflect opinions
of employees
● Upgrade systems
● Document procedures
● Control records
▶Lost-Worktime
Injury Rate
In Japan
Outside Japan
Global
Japan’s Manufacturing
Industry (Average)
FY2014
FY2015
FY2016
0.44
1.00
0.80
1.06
0.32
0.91
0.70
1.06
0.28
0.89
0.68
1.15
Lost-worktime injury rate = Number of persons absent from work due to occupational
accidents ÷ Total actual working hours × 1,000,000. Defined as occupational accidents
involving one or more days of absence from work.
NSK REPORT 2017
45
The Underlying Strength of Corporate Value
CSR / ESG Management
Creating Quality that Can Be Trusted
NSK’s Approach
NSK aims to become “No. 1 in Total Quality.” In other words, the
In specific terms, the Company will endeavor to enhance the
Company is working to achieve the industry’s best quality in
everything it delivers̶not only products and services but also
information. NSK believes that this commitment to quality
quality of its products, work and human resources, key elements
that provide the underlying strength of its business activities, while
at the same time incorporating the necessary quality to deliver
ensures that its products will satisfy customers all over the world.
attractive products that reflect the requirements of customers.
Quality Assurance Vision 2026
To strengthen Group-wide initiatives, NSK’s management checks
the status of quality control and directs all necessary measures in
a top-down manner through meetings of the Quality Board, which
is chaired by the president and composed of directors in charge of
each business division headquarters. In 2015, NSK put in place the
Quality Assurance Vision 2026 as a part of efforts to identify
specific targets through to 2026. As indicated at the right of the
page, this vision also clarifies the ideal state to which the Company
aspires. Guided by this vision, NSK will work diligently to achieve a
level of “NSK Quality” that engenders trust and contributes to the
peace of mind and safety of customers.
NSK Quality
Safety/Smartness/Confidence for Customer
[Customer 1st] [100% conforming article]
The Ideal State to which the Company Aspires
● Social contribution by product quality
● Quality constitution appraised by customers
● All employees think and act based on the
quality-first principle under high-quality ethics
Fiscal 2016 Quality Priority Policies
Evaluation
Achieved, Partially Achieved, Not Achieved
The Fifth Mid-Term Management Plan
(FY2016 to FY2018)
1. Fostering quality-first culture and human development
2. Enhancing preventive measures for quality
monitoring and audit
3. Establishing a field quality responsibility system
4. Reasserting strict adherence to quality control basic matters
5. Enhancing site control ability based on 5 GEN-Principle*
*A set of Japanese principles that focus on“GEN-ba,” the ACTUAL
frontline; “GEN-butsu,” the ACTUAL item or product; “GEN-jitsu,”
the ACTUAL condition or situation; “GEN-ri,” the ACTUAL principle
or theory; and “GEN-soku,” the ACTUAL rules or standards.
Initiatives to Achieve Higher Quality
1. Returning to the basics of the quality-first principle with full
employee participation in quality awareness improvement activities
2. Correcting processes that have gone as far as quality [“experienced
quality concerns”?] as a starting point for preventing any recurrences
3. Receiving feedback from field (market) quality to design and
increase the sophistication of active application technology
4. Re-streamlining systematic quality regulations and
implement practical education
5. Implementing on-the-spot improvements by rank-based
site visits and onsite interactive communication
NSK classifies quality into four categories: the field
quality, design quality, manufacturing quality, and quality
of supplier components, and strives to enhance the
standard of each.
As a measure to enhance field quality, we are working
to establish a structure capable of proposing products and
services that meet not only the quality standards that our
customers demand but also the needs of the wider society.
To enhance our design standards and deliver even
higher quality products, we use our knowledge and
experience to establish voluntary internal targets that go
beyond the basic quality levels our customers require.
We also develop manufacturing processes that focus
on the 4Ms (manpower, machinery, materials and
methods) in order to further improve product quality.
To make high quality products, we need to ensure the
parts and materials we use are also of the highest quality.
To this end, NSK works with its suppliers to conduct
quality improvement initiatives.
(Refer to page 5.)
110
100
90
80
70
0
Field Quality
Supplier Quality
Initiatives Aimed at
Enhancing Quality
Design Quality
Manufacturing
Quality
▶Degree of Customer Satisfaction (with FY2012 as a base of 100)
100
99.8
104.8
105.6
106.7
2012
(Base FY)
2013
2014
2015
2016
(FY)
Material CSR Issues
１
Quality Management
To Build Quality into Each Process, the Company Is Promoting the NSK Product Development System (NPDS).
This system is used for new projects and is designed to
achieve efficient mass production of high-quality products
by solving problems at key points in each process before
moving on to the next stage. Moving forward, NSK will
globally deploy its innovative NPDS quality management
system.
▶Outline of NPDS
Process
Product
planning
Development
and design
Prototype
manufacture
Pilot
production
Pilot mass
production
Mass
production
Specialists perform rigorous and
objective checks to confirm these items
Confirmation items
Determining whether to
move on to the next process
Can the product be
designed to satisfy
customer needs?
Can it be processed
and assembled
according to the
design?
Can it be processed
and assembled using
the intended methods
in mass production?
Can it be processed
and assembled using
the same methods in
mass production?
Can it be
stably mass
produced?
Material CSR Issues
2
Safety Management
Creating Safe and Healthy Workplaces
NSK’s Approach
To protect the safety and health of each and every employee, NSK
undertakes initiatives with the following basic philosophy: “Safety is
the first and foremost priority.”
Striving to ensure workplace safety, the Company implements
measures to address unsafe equipment and facilities while
promoting a set of uniform global standards across the Group as a
whole. At the same time, proactive measures are being taken to
share information with employees and to ferment a culture in which
workers openly caution each other through mutual education.
Occupational Safety and Health Management
NSK realizes how important it is to be proactive about safety and
health at its workplaces, which support the Company’s
manufacturing operations, and to provide a work environment that
allows all employees to reach their full potential. Based on this
conviction, we are building a proprietary occupational safety and
health management system that complies with OHSAS 18001 and
other related regulations while striving to foster a “safety first”
corporate culture that fully engages all employees at each site.
In fiscal 2016, we organized a Safety and Fire Prevention
Committee that is chaired by the CEO. In addition to providing a
forum to discuss safety on a global basis and unify the Company’s
policy, the committee shares best practices from each region while
working to create safer and more accommodating workplaces.
Overview of Activities and Main Initiatives in Fiscal 2016
In fiscal 2016, only a 5% reduction was achieved in the number of
occupational accidents for the entire Group against the target of a 25%
reduction compared to the previous fiscal year. In addition, we take the
fact that one major fire occurred extremely seriously and are redoubling
our efforts to establish measures to prevent serious accidents.
Main Initiatives in Fiscal 2016
● Promotion of risk assessments covering machine safety
● Rollout of “point and call” safety training
● Identification of areas where slippage risk is present and implementation
of countermeasures, display of risk maps showing hazardous locations
● Organizational enhancements (establishment of Safety and
Fire-Prevention Enhancement Committee chaired by the CEO)
● Standardization of safety training
▶Global Safety and Fire-Prevention Management System
President and CEO
Manufacturing Strategy
Division HQ
Safety and Fire-Prevention
Enhancement Office
Safety and Fire-Prevention
Enhancement Committee
The Americas
Persons responsible
for safety in the region
Europe
Persons responsible
for safety in region
China
Persons responsible
for safety in China
ASEAN/
Oceania
Persons responsible
for safety in the region
India
Persons responsible
for safety in India
Each plant
in Japan
Those responsible
for safety
Each plant
Each plant
Each plant
Each plant
Each plant
Those responsible
for safety
Those responsible
for safety
Those responsible
for safety
Those responsible
for safety
Those responsible
for safety
▶Occupational Safety and Health Management System
Announcement of safety and
health policy by management
Plan
Act
Continuous
improvement
Spiral up
Do
Check
Review
Basic elements
of system
● Reflect opinions
of employees
● Upgrade systems
● Document procedures
● Control records
▶Lost-Worktime
Injury Rate
In Japan
Outside Japan
FY2014
FY2015
FY2016
0.44
1.00
0.32
0.91
0.28
0.89
0.80
Global
Japan’s Manufacturing
Industry (Average)
Lost-worktime injury rate = Number of persons absent from work due to occupational
accidents ÷ Total actual working hours × 1,000,000. Defined as occupational accidents
involving one or more days of absence from work.
0.68
0.70
1.06
1.06
1.15
44
NSK REPORT 2017
NSK REPORT 2017
45
The Underlying Strength of Corporate Value
CSR / ESG Management
Material CSR Issues
3
Environmental Management
Activities for Global Environmental Protection
To realize a sustainable society, global environmental targets and
environmental regulations by country and region have been established.
Companies are required to run PDCA cycles for environmental
management with the intention of balancing environmental conserva-
tion with financial gain.
NSK adheres to the principle that global environmental protection,
as outlined in the Company’s mission statement, must be an ever-pres-
ent concern in all its business activities. Accordingly, the Group states in
its Environmental Policy that environmental management forms the
basis of its existence and pursuits. While raising the awareness of each
of its employees, NSK works to create environmentally friendly
products, implement global warming countermeasures, enact
measures to promote resource conservation and recycling, and enforce
measures to reduce the use of environmentally harmful substances.
Material and Energy Balance
▶NSK’s Environmental Management
Contribution to the realization of a sustainable society
Improvement in NSK’s corporate value
Maximization of an environmental contribution through products
Minimization of the environmental impact from business activities
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Environmental compliance
Global environmental management
NSK business activities in all regions/divisions
NSK works hard to continually reduce its environmental impact and to use energy and resources in the most effective manner by quantifying the
amount of resources used in its business activities and the amount of greenhouse gases, including CO2, waste and other emissions, that it outputs.
▶Input and Output of Global Business Activities (FY2016)
INPUT (Global)
Materials and parts
Energy
Water supply
Steel
705 × 103 tons
Oils and
greases
21.1 × 103 tons
Energy
Fuel
16,312 TJ
Water
4,716 × 103 m3
2,330 TJ
Groundwater
1,840 × 103 m3
Electricity and heat
(steam, etc. supplied
from third parties)
13,982 TJ
General water
2,274 × 103 m3
Industrial water
601 × 103 m3
Materials and parts (Japan)
(Environmentally harmful substances)
PRTR*1-designated substances
487.8 tons
NSK
Development
Design
Procurement
Manufacturing
Distribution
Atmospheric gases
Waste
Water quantity
OUTPUT (Global)
Greenhouse gases (CO2 equivalent)*2
991.4 × 103 tons
Total waste
211.5 × 103 tons
(Japan 105.5×103 tons, outside Japan 106.0×103 tons)
NOx
SOx
128 tons
48 tons
Recycled
194.0 × 103 tons
Landfill waste
Incinerated waste
and water treatment
3.7 × 103 tons
13.8 × 103 tons
Wastewater
2,863 × 103 m3
Rivers
704 × 103 m3
Sewage system
2,159 × 103 m3
Environmentally harmful
substances (Japan)
Discharge/transfer of
PRTR-designated substances
95.8 tons
BOD*3
2.3 tons
VOC*4
85.8 tons
*1 Act on Confirmation, etc., of Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof (law concerning Pollutant Release and Transfer
Register/PRTR). This Japanese law is intended to facilitate the improvement of chemical substance management by ensuring that the amounts released into the environment are ascertained and reported to the authorities.
*2 The amount of greenhouse gas emissions is multiplied by each region's global warming coefficient. In Japan, calculated in conformity with the Ministry of the Environment and the Ministry of Economy, Trade
and Industry’s “Greenhouse Gas Emission Calculation and Reporting Manual.” Outside Japan, calculated in conformity with the International Energy Agency (IEA)’s “CO2 Emissions from Fuel Combustion.”
*3 An index indicating to degrees of water pollution organic materials, and the amount of oxygen required for the organic material to oxidize and decompose into microbes. The amount of the biochemical
oxygen demand (BOD) load shown here is the BOD measurement value multiplied by the amount of the river water discharge.
*4 Abbreviation for volatile organic compounds, which are considered to be one of the substances that cause photochemical smog.
Creating Environmentally Friendly Products
Harnessing NSK’s Four Core Technologies to
Help Reduce the Environmental Impact of Human Societies
The products of the future must perform better than today’s to help
reduce the impact that human societies have on the natural environment.
To contribute to a safer, smoother society and to help protect the global
environment, as spelled out by its corporate philosophy, NSK is working
hard to accurately determine the needs of its customers and the broader
society, as well as to develop environmentally friendly products and
technologies that make the most of the Company’s four core technologies
(tribology, materials, numerical simulation, and mechatronics).
By delivering these products and technologies to all corners of the globe,
NSK aims to contribute to the sophistication of the machinery in which its
products are incorporated and to the development of environmentally
friendly products as well as to the reduction of the environmental impact
of society.
Other related
information
For further information on environmental management (policy, framework, targets/achievements, environmental accounting), global
warming countermeasures, measures for resource conservation and recycling, reducing the use of environmentally harmful substances,
and biodiversity conservation, please refer to our CSR Report (NSK website: http://www.nsk.com/sustainability/csrReport/index.html).
46
NSK REPORT 2017
NSK REPORT 2017
47
Basic Policy for the Development of Environmentally Friendly Products
NSK minimizes the environmental impact of its products at every stage̶from R&D and design to production, usage and
disposal̶by upholding the following standards:
1. Each product should contribute toward the energy and resource conservation of the machine in which it is installed.
2. The amount of energy and resources required during product manufacturing should be minimal.
3. Environmentally harmful substances should not be used in products or manufacturing processes.
4. Products should contribute to the health and safety of end users by having low emissions of vibration, noise, and dust.
▶NSK Eco-Efficiency Indicators (Neco)
The Company conducts assessments of products under development by utilizing NSK eco-efficiency
indicators (Neco) as a yardstick for quantitatively assessing the degree of their environmental
Neco=
friendliness. The Neco score is a numerical value obtained by dividing the product value V by the
environmental impact E. The product value numerator V represents, in numerical form, the degree
Product value V (product life, functions)
Environmental impact E
(resource and energy conservation)
of improvement of a product in development were an existing product assessed at 1 with regard to
Product value UP
Environmental impact DOWN
assessment parameters that need to be increased to improve product value, such as service life,
performance and accuracy. By comparison to an existing NSK product, the environmental impact
denominator E represents assessment parameters, such as product weight, power consumption
and friction loss, which must be reduced to decrease the environmental impact.
To use a bearing as an example, the longer its service life when compared to an existing
product, the better its ability to withstand high-speed rotation, the lighter and more compact that
bearing is, and the lower the friction loss, the higher its Neco value will be, and that bearing will be
assessed as an environmentally friendly product. NSK is working to develop new products with a
＝
Neco UP
Neco UP
＝
＝
Newly developed
product
Environmentally
friendly products
Existing
NSK product
1
Existing
NSK product
1
Newly developed
product
Neco score of 1.2 or higher and has developed 219 environmentally friendly products to date.
Product value V
Environmental impact E
▶Environmentally Friendly Products Developed in Fiscal 2016
In fiscal 2016, NSK developed eight new environmentally friendly products that help customers conserve energy and resources.
Product Name
Long-Life, Optimized
Cylindrical Roller
High Performance
Standard NSKHPS™
Bearings for the Free Side
of a Steel/Continuous
Casting Machine Guide
Series of Large
Spherical Roller
Bearings for
Roll
Industrial Machinery
Ultra-High-Speed
Spindles with
Grease Lubrication
Highly Dust
Resistant, Low
Friction Loss
Right/Left Hand Ball
Screw Series of
Super High Load
S-HTF Series of
Ball Screws for
High-Load Drive
for Grinding
Processes
Bearings for Office
Capacity
Equipment
ToughCarrier™
Single-Axis Actuators
Super Long-life
Needle Rollers for
Automobile
Transmissions
6th-Generation
Low-Friction
Tapered Roller
Bearings for
Automotive
Transmissions
Technology
Developed by
NSK
Longer life
Longer life
Improvement
of high speeds
Low friction
loss
Low heat
generation
Improved
waterproof
performance
Realization of high
dust resistant
performance
Environmental
Benefits for
NSK’s Customers
Improved
productivity
Improved
productivity
Energy savings
Energy savings
Realization of
clean environment
Increased
reliability
Super-high load
capacity and
longer life
High rigidity
Helps make
production
equipment more
power
conservative
Longer life
and improved
load-bearing
capacity
Improved
lifetime durability
Damage prevention
of mating parts
Low friction
loss
Improved
productivity
Improved
automotive
fuel economy
Improved
automotive
fuel economy
Neco
2.9
1.6
1.3
1.4
2.3
1.3
1.4
1.2
Contributing to more energy-efficient, cleaner injection molding machines through super-large ball screw featuring world-top-class load capacity
Consuming 40%–60% less electricity than hydraulic injection molding machines, electric models feature superior energy-saving
performance. In addition, as the movement of each part can be controlled directly with a ball screw and servomotor, electric injection
molding machines make product quality consistent and shorten cycle times. Moreover, since no oil is needed to move hydraulic
cylinders, they can contribute to the creation of safer and cleaner working environments.
NSK is contributing to the evolution of injection molding machines by promoting high load capacity and long service life of super-large
ball screws for injection molding machines. In recent years, in accordance with the increasingly more stringent automobile fuel
efficiency and exhaust emission regulations in each country and region, further
reductions in automobile weights have been required. As a result, there is increasing
pressure to replace metal and glass with lightweight resins for some large parts.
The production of large resin parts requires larger injection-molding machines and
has demanded that the ball screws used have a higher load capacity.
Having developed the necessary processing technology and production equipment,
NSK commercialized a ball screw for high load drive applications that features
world-top-class load capacity. With this ball screw, NSK will further help its
customers and society as a whole to conserve energy.
The Underlying Strength of Corporate Value
CSR / ESG Management
Material CSR Issues
3
Environmental Management
Activities for Global Environmental Protection
To realize a sustainable society, global environmental targets and
environmental regulations by country and region have been established.
Companies are required to run PDCA cycles for environmental
management with the intention of balancing environmental conserva-
tion with financial gain.
NSK adheres to the principle that global environmental protection,
as outlined in the Company’s mission statement, must be an ever-pres-
ent concern in all its business activities. Accordingly, the Group states in
its Environmental Policy that environmental management forms the
basis of its existence and pursuits. While raising the awareness of each
of its employees, NSK works to create environmentally friendly
products, implement global warming countermeasures, enact
measures to promote resource conservation and recycling, and enforce
measures to reduce the use of environmentally harmful substances.
Material and Energy Balance
▶NSK’s Environmental Management
Contribution to the realization of a sustainable society
Improvement in NSK’s corporate value
Maximization of an environmental contribution through products
Minimization of the environmental impact from business activities
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Environmental compliance
Global environmental management
NSK business activities in all regions/divisions
NSK works hard to continually reduce its environmental impact and to use energy and resources in the most effective manner by quantifying the
amount of resources used in its business activities and the amount of greenhouse gases, including CO2, waste and other emissions, that it outputs.
▶Input and Output of Global Business Activities (FY2016)
INPUT (Global)
Materials and parts
Energy
Water supply
Steel
705 × 103 tons
Oils and
greases
21.1 × 103 tons
Energy
Fuel
16,312 TJ
Water
4,716 × 103 m3
2,330 TJ
Groundwater
1,840 × 103 m3
13,982 TJ
General water
2,274 × 103 m3
Industrial water
601 × 103 m3
Electricity and heat
(steam, etc. supplied
from third parties)
Materials and parts (Japan)
(Environmentally harmful substances)
PRTR*1-designated substances
487.8 tons
NSK
Development
Design
Procurement
Manufacturing
Distribution
Atmospheric gases
Waste
Water quantity
OUTPUT (Global)
Greenhouse gases (CO2 equivalent)*2
991.4 × 103 tons
Total waste
211.5 × 103 tons
(Japan 105.5×103 tons, outside Japan 106.0×103 tons)
NOx
SOx
128 tons
48 tons
Recycled
194.0 × 103 tons
Landfill waste
3.7 × 103 tons
Incinerated waste
and water treatment
13.8 × 103 tons
Wastewater
2,863 × 103 m3
Rivers
704 × 103 m3
Sewage system
2,159 × 103 m3
BOD*3
2.3 tons
VOC*4
Environmentally harmful
substances (Japan)
Discharge/transfer of
PRTR-designated substances
95.8 tons
85.8 tons
*1 Act on Confirmation, etc., of Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof (law concerning Pollutant Release and Transfer
Register/PRTR). This Japanese law is intended to facilitate the improvement of chemical substance management by ensuring that the amounts released into the environment are ascertained and reported to the authorities.
*2 The amount of greenhouse gas emissions is multiplied by each region's global warming coefficient. In Japan, calculated in conformity with the Ministry of the Environment and the Ministry of Economy, Trade
and Industry’s “Greenhouse Gas Emission Calculation and Reporting Manual.” Outside Japan, calculated in conformity with the International Energy Agency (IEA)’s “CO2 Emissions from Fuel Combustion.”
*3 An index indicating to degrees of water pollution organic materials, and the amount of oxygen required for the organic material to oxidize and decompose into microbes. The amount of the biochemical
oxygen demand (BOD) load shown here is the BOD measurement value multiplied by the amount of the river water discharge.
*4 Abbreviation for volatile organic compounds, which are considered to be one of the substances that cause photochemical smog.
Creating Environmentally Friendly Products
Harnessing NSK’s Four Core Technologies to
Help Reduce the Environmental Impact of Human Societies
society, as well as to develop environmentally friendly products and
technologies that make the most of the Company’s four core technologies
(tribology, materials, numerical simulation, and mechatronics).
The products of the future must perform better than today’s to help
By delivering these products and technologies to all corners of the globe,
reduce the impact that human societies have on the natural environment.
NSK aims to contribute to the sophistication of the machinery in which its
To contribute to a safer, smoother society and to help protect the global
environment, as spelled out by its corporate philosophy, NSK is working
products are incorporated and to the development of environmentally
friendly products as well as to the reduction of the environmental impact
hard to accurately determine the needs of its customers and the broader
of society.
Other related
information
For further information on environmental management (policy, framework, targets/achievements, environmental accounting), global
warming countermeasures, measures for resource conservation and recycling, reducing the use of environmentally harmful substances,
and biodiversity conservation, please refer to our CSR Report (NSK website: http://www.nsk.com/sustainability/csrReport/index.html).
Basic Policy for the Development of Environmentally Friendly Products
NSK minimizes the environmental impact of its products at every stage̶from R&D and design to production, usage and
disposal̶by upholding the following standards:
1. Each product should contribute toward the energy and resource conservation of the machine in which it is installed.
2. The amount of energy and resources required during product manufacturing should be minimal.
3. Environmentally harmful substances should not be used in products or manufacturing processes.
4. Products should contribute to the health and safety of end users by having low emissions of vibration, noise, and dust.
▶NSK Eco-Efficiency Indicators (Neco)
The Company conducts assessments of products under development by utilizing NSK eco-efficiency
indicators (Neco) as a yardstick for quantitatively assessing the degree of their environmental
friendliness. The Neco score is a numerical value obtained by dividing the product value V by the
environmental impact E. The product value numerator V represents, in numerical form, the degree
of improvement of a product in development were an existing product assessed at 1 with regard to
assessment parameters that need to be increased to improve product value, such as service life,
performance and accuracy. By comparison to an existing NSK product, the environmental impact
denominator E represents assessment parameters, such as product weight, power consumption
and friction loss, which must be reduced to decrease the environmental impact.
To use a bearing as an example, the longer its service life when compared to an existing
product, the better its ability to withstand high-speed rotation, the lighter and more compact that
bearing is, and the lower the friction loss, the higher its Neco value will be, and that bearing will be
assessed as an environmentally friendly product. NSK is working to develop new products with a
Neco score of 1.2 or higher and has developed 219 environmentally friendly products to date.
Neco=
Product value V (product life, functions)
Environmental impact E
(resource and energy conservation)
Product value UP
＝
Neco UP
Newly developed
product
Environmental impact DOWN
＝
Neco UP
＝
Environmentally
friendly products
Existing
NSK product
1
Existing
NSK product
1
Newly developed
product
Product value V
Environmental impact E
▶Environmentally Friendly Products Developed in Fiscal 2016
In fiscal 2016, NSK developed eight new environmentally friendly products that help customers conserve energy and resources.
Product Name
Long-Life, Optimized
Cylindrical Roller
Bearings for the Free Side
of a Steel/Continuous
Casting Machine Guide
Roll
High Performance
Standard NSKHPS™
Series of Large
Spherical Roller
Bearings for
Industrial Machinery
Ultra-High-Speed
Spindles with
Grease Lubrication
for Grinding
Processes
Highly Dust
Resistant, Low
Friction Loss
Bearings for Office
Equipment
Right/Left Hand Ball
Screw Series of
Super High Load
Capacity
ToughCarrier™
Single-Axis Actuators
S-HTF Series of
Ball Screws for
High-Load Drive
Super Long-life
Needle Rollers for
Automobile
Transmissions
6th-Generation
Low-Friction
Tapered Roller
Bearings for
Automotive
Transmissions
Technology
Developed by
NSK
Longer life
Longer life
Improvement
of high speeds
Low friction
loss
Low heat
generation
Improved
waterproof
performance
Realization of high
dust resistant
performance
Environmental
Benefits for
NSK’s Customers
Improved
productivity
Improved
productivity
Energy savings
Energy savings
Realization of
clean environment
Increased
reliability
Super-high load
capacity and
longer life
High rigidity
Helps make
production
equipment more
power
conservative
Longer life
and improved
load-bearing
capacity
Improved
lifetime durability
Damage prevention
of mating parts
Low friction
loss
Improved
productivity
Improved
automotive
fuel economy
Improved
automotive
fuel economy
Neco
2.9
1.6
1.3
1.4
2.3
1.3
1.4
1.2
Contributing to more energy-efficient, cleaner injection molding machines through super-large ball screw featuring world-top-class load capacity
Consuming 40%–60% less electricity than hydraulic injection molding machines, electric models feature superior energy-saving
performance. In addition, as the movement of each part can be controlled directly with a ball screw and servomotor, electric injection
molding machines make product quality consistent and shorten cycle times. Moreover, since no oil is needed to move hydraulic
cylinders, they can contribute to the creation of safer and cleaner working environments.
NSK is contributing to the evolution of injection molding machines by promoting high load capacity and long service life of super-large
ball screws for injection molding machines. In recent years, in accordance with the increasingly more stringent automobile fuel
efficiency and exhaust emission regulations in each country and region, further
reductions in automobile weights have been required. As a result, there is increasing
pressure to replace metal and glass with lightweight resins for some large parts.
The production of large resin parts requires larger injection-molding machines and
has demanded that the ball screws used have a higher load capacity.
Having developed the necessary processing technology and production equipment,
NSK commercialized a ball screw for high load drive applications that features
world-top-class load capacity. With this ball screw, NSK will further help its
customers and society as a whole to conserve energy.
46
NSK REPORT 2017
NSK REPORT 2017
47
The Underlying Strength of Corporate Value
CSR / ESG Management
Material CSR Issues
4
Human Resource Management
Promoting the Advancement of Women in the Workplace (Japan)
Creating a Dynamic Work Environment
As globalization continues its advance, there are more and more opportunities for exchange among
people of different nationalities and backgrounds. It has never been more important to work across
national borders and regional boundaries to achieve prosperity for all, and the basis of this must be
deeper mutual understanding. In order to contribute to the sustainable growth of both the Company and
its employees, NSK is committed to creating a safe and motivating workplace that respects the cultures
and practices of countries and regions worldwide, and that embraces diversity in the workforce.
Leveraging
a diverse workforce
Promoting diversity
and inclusion
Facilitating
work-life balance
Maximizing Individual
Talent in a Fair and
Dynamic Work Environment
NSK’s Approach
In its Management Principles, NSK clearly states its aim to
provide challenges and opportunities to its employees, channeling
their skills and fostering their creativity and individuality. With the
aim to maximize the individual talent of each employee, NSK will
work to create an inspiring and purpose-driven workplace, and
develop the talent to lead NSK forward.
Respecting Fundamental Rights at Work
Creating
a motivating workplace
Respecting fundamental
rights at work
Creating a safe
and inspiring workplace
Creating workplaces
and opportunities that
foster employee growth
Talent management
Providing opportunities
for training and
self-development
Prohibiting Discrimination and Respecting Fundamental Rights at Work
Respecting the Universal Declaration of Human Rights, NSK promotes activities based on the declaration’s ideals. Having clearly stated its aim “to
provide challenges and opportunities to our employees, channeling their skills and fostering their creativity and individuality” in its Management
Principles (please refer to page 1), the Company also defines the “prohibition of unfair discrimination” and “respect for basic fundamental rights at
work” in the NSK Code of Corporate Ethics. Prohibiting discrimination̶on the basis of race, appearance, belief, gender, social status, lineage, ethnicity,
nationality, age or disability̶as well as harassment, forced labor and child labor, the Company creates workplaces where diverse human resources
can work enthusiastically, while striving to provide equal opportunity in recruitment, job assignment, evaluations and other employment issues.
In addition to making NSK’s stance on human rights better known among its employees, the Company identifies acts that run contrary to that
stance through internal audits and its internal reporting system, and takes immediate action when necessary to correct it.
Employment Policy to Preserve
the Stability of NSK and the Society at Large
As a company that is committed to monozukuri, NSK aims
for sustainable growth. For that reason, NSK takes a
long-term perspective on employment and places high
value on the continual recruitment and development of
outstanding human resources to lead its businesses.
Having established a policy to prevent mass layoffs, the
Company also engages in appropriate employment
practices in accordance with the laws and ordinances of
each country and region where it operates.
Labor-Management Relations Based on Dialogue
NSK regards sound labor-management relations as critical to the
sustainable growth of the Company. One way in which the Company
respects fundamental rights at work, as pledged in the NSK Code of
Corporate Ethics, is by guaranteeing employees the right to
communicate openly and directly with management without fear of
retaliation, intimidation or harassment. Employees and managers work
as partners and strive to communicate at a deeper level, sharing views
on the work environment and business conditions, and discussing and
implementing improvement measures. NSK is committed to creating
workplaces where employees can proactively engage in their duties.
Creating an Organization that Embraces Diversity
Promoting Diversity and Inclusion
Leveraging Global Talent
It is NSK’s conviction that employing people with diverse
backgrounds̶in gender, age, nationality, culture, lifestyle and
values̶will foster a work environment full of new perspectives
and ways of thinking, which will in turn strengthen the
Company’s competitiveness and ability to avoid risks. For this
reason, through diversity training and LGBT* seminars for both
executives and employees, and directed talks from the
president and other members of senior management, NSK
promotes the creation of a corporate culture that embraces
the diversity and inclusion of people and the values they hold.
*LGBT is an inclusive term for sexual minorities which stands for lesbian,
gay, bisexual, and transgender.
Through close coordination between its headquarters in
Japan and regional HR offices throughout the world, NSK
has undertaken a variety of initiatives to leverage its global
talent across both national and regional boundaries. The
Company is currently working to create a shared global
infrastructure for HR that promotes standardization while
leaving room for regional distinctions. This will include a
common grading system for ranking executive posts, a
deliberate system of promotion and development based
on succession plans, competencies deemed necessary for
leaders at NSK, and a guideline for global mobility.
48
NSK REPORT 2017
Despite recent trends in the industry, the rate of female employees at NSK remains at 10.7% (FY 2016, NSK non-consolidated
and major group companies in Japan), and the rate of women in management positions also remains low at 1.2%. To promote
gender diversity, NSK has started attempts to improve its female hiring rate and to expand the work options of female
employees. The Company’s efforts do not stop there, however: as a first step in cultivating diversity in talent and values at the
management level, NSK conducts training for female managerial candidates to prepare them with the skills and mindset they
will need to excel as a leader. NSK believes that diversity and inclusion will be encouraged and the competitiveness of the
Company enhanced by increasing the number of female employees who actively demonstrate their abilities.
Human Resource Development Programs
Support for Working Parents and Caregivers (Japan)
To develop the talent necessary to support sustainable
To create a more open, amiable workplace that responds
growth, NSK employs a talent management system to
ensure that each employee can realize their full potential.
NSK is also working to promote career advancement and
motivation by orchestrating strategic job rotations that
serve to stretch the skills and abilities of its employees.
Through a variety of educational offerings and
training programs that further refine its people’s abilities,
knowledge and character, NSK provides opportunities and
forums to help in the development of its employees.
In addition to targeted training geared for managers
to the needs of a diverse workforce, NSK’s first step of
action is providing support for parents of small children
and caregivers. While the Company’s priority in the past
has been to stay legally compliant in this area, it is now
beginning to take a more proactive role. Not only will NSK
work to provide comprehensive support for these
employees, but will also create a work environment where
they can maximize their full potential. Many employees
struggling with the time constraints of parenthood are still
very eager to excel in the workplace. For these parents,
NSK is offering flexible working hours on a trial basis, and
and other levels of the organization, each year NSK runs
has started an onsite childcare service on working public
both the Japan Management College and the Global
Management College, which provide selective training for
future leaders of the organization. NSK has also begun
offering opportunities to study abroad or participate in
liberal arts programs, with an aim to broaden horizons
and develop character. The Company also offers
professional education by function, such as the NSK
Manufacturing Education and Training Center, established
to facilitate the transfer of technical skills involved in
manufacturing, and the NSK Institute of Technology (NIT),
which conducts comprehensive technical training for
engineers.
In fiscal 2016, NSK invested approximately ¥44,000
per person in employee training and development.
Work Style Reforms (Japan)
NSK believes that having employees who enjoy and are actively
engaged in both their work and personal lives will have a
beneficial impact on its business activities. An improvement in
employee productivity will lead to an improvement in their ability
to produce quality work, which will ultimately cultivate a more
fulfilling life both at work and home. For this reason, NSK strives
to better manage employee working hours, to encourage
employees to take their annual paid leave, and to provide a variety
of work style options to fit
the diverse lifestyles of its
employees. With an aim
of boosting employee job
satisfaction, NSK also
runs seminars and other
programs to raise
awareness̶of both
managers and
employees̶on the need
for work style reform.
Work style reform seminar
holidays when regular daycare facilities close down.
▶Support System for Parents and Caregivers*1
Parental leave
NSK
Through end of April
following child’s third birthday
(first five days are paid)
Japanese law
Up to 18 months
(non-paid)*2
Up to 3 years
Reduced hours for
working parents
Through end of March of
child’s 6th grade year
Caregiver leave
Reduced hours for
working caregivers
Exemption from
half-day limit
Re-employment
registration system
Up to 1 year
Up to 93 days
Up to 3 years
Up to 3 years
Usually limited to 12 half-days per year,
but unlimited for family care
Employees who resign to follow a transferring
spouse can register for re-employment at
NSK upon their return
*1 NSK and main group companies in Japan
*2 Changed to two years from October 1, 2017
External Assessments:
Eruboshi and Kurumin Certifications
In recognition for its efforts to support working parents
and the advancement of women in the workplace, the
Minister of Health, Labour, and Welfare awarded NSK
certification for Eruboshi*1 and Kurumin*2.
1. Eruboshi: Based on the Act of Promotion of Women’s Participation and
Advancement in the Workplace, this accreditation awarded by the Minister of
Health, Labour and Welfare goes to “companies and organizations working
proactively to create work environments where women can play an active role.”
2. Kurumin: Based on the Act for Measures to Support the Development of the
Next-Generation Children, NSK formulated an action plan as a general business
operator and received certification from the Minister of Health, Labour and
Welfare as a corporation that supports child raising.
NSK REPORT 2017
49
The Underlying Strength of Corporate Value
CSR / ESG Management
Leveraging
a diverse workforce
Promoting diversity
and inclusion
Facilitating
work-life balance
Maximizing Individual
Talent in a Fair and
Dynamic Work Environment
Creating a Dynamic Work Environment
As globalization continues its advance, there are more and more opportunities for exchange among
people of different nationalities and backgrounds. It has never been more important to work across
national borders and regional boundaries to achieve prosperity for all, and the basis of this must be
deeper mutual understanding. In order to contribute to the sustainable growth of both the Company and
its employees, NSK is committed to creating a safe and motivating workplace that respects the cultures
and practices of countries and regions worldwide, and that embraces diversity in the workforce.
NSK’s Approach
In its Management Principles, NSK clearly states its aim to
provide challenges and opportunities to its employees, channeling
their skills and fostering their creativity and individuality. With the
aim to maximize the individual talent of each employee, NSK will
work to create an inspiring and purpose-driven workplace, and
develop the talent to lead NSK forward.
Creating
a motivating workplace
Respecting fundamental
rights at work
Creating a safe
and inspiring workplace
Respecting Fundamental Rights at Work
Prohibiting Discrimination and Respecting Fundamental Rights at Work
Creating workplaces
and opportunities that
foster employee growth
Talent management
Providing opportunities
for training and
self-development
Respecting the Universal Declaration of Human Rights, NSK promotes activities based on the declaration’s ideals. Having clearly stated its aim “to
provide challenges and opportunities to our employees, channeling their skills and fostering their creativity and individuality” in its Management
Principles (please refer to page 1), the Company also defines the “prohibition of unfair discrimination” and “respect for basic fundamental rights at
work” in the NSK Code of Corporate Ethics. Prohibiting discrimination̶on the basis of race, appearance, belief, gender, social status, lineage, ethnicity,
nationality, age or disability̶as well as harassment, forced labor and child labor, the Company creates workplaces where diverse human resources
can work enthusiastically, while striving to provide equal opportunity in recruitment, job assignment, evaluations and other employment issues.
In addition to making NSK’s stance on human rights better known among its employees, the Company identifies acts that run contrary to that
stance through internal audits and its internal reporting system, and takes immediate action when necessary to correct it.
Employment Policy to Preserve
the Stability of NSK and the Society at Large
Labor-Management Relations Based on Dialogue
As a company that is committed to monozukuri, NSK aims
for sustainable growth. For that reason, NSK takes a
NSK regards sound labor-management relations as critical to the
sustainable growth of the Company. One way in which the Company
long-term perspective on employment and places high
respects fundamental rights at work, as pledged in the NSK Code of
value on the continual recruitment and development of
Corporate Ethics, is by guaranteeing employees the right to
outstanding human resources to lead its businesses.
communicate openly and directly with management without fear of
Having established a policy to prevent mass layoffs, the
retaliation, intimidation or harassment. Employees and managers work
Company also engages in appropriate employment
as partners and strive to communicate at a deeper level, sharing views
practices in accordance with the laws and ordinances of
on the work environment and business conditions, and discussing and
each country and region where it operates.
implementing improvement measures. NSK is committed to creating
workplaces where employees can proactively engage in their duties.
Creating an Organization that Embraces Diversity
Promoting Diversity and Inclusion
Leveraging Global Talent
It is NSK’s conviction that employing people with diverse
Through close coordination between its headquarters in
backgrounds̶in gender, age, nationality, culture, lifestyle and
Japan and regional HR offices throughout the world, NSK
values̶will foster a work environment full of new perspectives
has undertaken a variety of initiatives to leverage its global
and ways of thinking, which will in turn strengthen the
talent across both national and regional boundaries. The
Company’s competitiveness and ability to avoid risks. For this
Company is currently working to create a shared global
reason, through diversity training and LGBT* seminars for both
infrastructure for HR that promotes standardization while
executives and employees, and directed talks from the
leaving room for regional distinctions. This will include a
president and other members of senior management, NSK
common grading system for ranking executive posts, a
promotes the creation of a corporate culture that embraces
deliberate system of promotion and development based
the diversity and inclusion of people and the values they hold.
on succession plans, competencies deemed necessary for
*LGBT is an inclusive term for sexual minorities which stands for lesbian,
leaders at NSK, and a guideline for global mobility.
gay, bisexual, and transgender.
48
NSK REPORT 2017
Material CSR Issues
4
Human Resource Management
Promoting the Advancement of Women in the Workplace (Japan)
Despite recent trends in the industry, the rate of female employees at NSK remains at 10.7% (FY 2016, NSK non-consolidated
and major group companies in Japan), and the rate of women in management positions also remains low at 1.2%. To promote
gender diversity, NSK has started attempts to improve its female hiring rate and to expand the work options of female
employees. The Company’s efforts do not stop there, however: as a first step in cultivating diversity in talent and values at the
management level, NSK conducts training for female managerial candidates to prepare them with the skills and mindset they
will need to excel as a leader. NSK believes that diversity and inclusion will be encouraged and the competitiveness of the
Company enhanced by increasing the number of female employees who actively demonstrate their abilities.
Human Resource Development Programs
Support for Working Parents and Caregivers (Japan)
To develop the talent necessary to support sustainable
growth, NSK employs a talent management system to
ensure that each employee can realize their full potential.
NSK is also working to promote career advancement and
motivation by orchestrating strategic job rotations that
serve to stretch the skills and abilities of its employees.
Through a variety of educational offerings and
training programs that further refine its people’s abilities,
knowledge and character, NSK provides opportunities and
forums to help in the development of its employees.
In addition to targeted training geared for managers
and other levels of the organization, each year NSK runs
both the Japan Management College and the Global
Management College, which provide selective training for
future leaders of the organization. NSK has also begun
offering opportunities to study abroad or participate in
liberal arts programs, with an aim to broaden horizons
and develop character. The Company also offers
professional education by function, such as the NSK
Manufacturing Education and Training Center, established
to facilitate the transfer of technical skills involved in
manufacturing, and the NSK Institute of Technology (NIT),
which conducts comprehensive technical training for
engineers.
In fiscal 2016, NSK invested approximately ¥44,000
per person in employee training and development.
Work Style Reforms (Japan)
NSK believes that having employees who enjoy and are actively
engaged in both their work and personal lives will have a
beneficial impact on its business activities. An improvement in
employee productivity will lead to an improvement in their ability
to produce quality work, which will ultimately cultivate a more
fulfilling life both at work and home. For this reason, NSK strives
to better manage employee working hours, to encourage
employees to take their annual paid leave, and to provide a variety
of work style options to fit
the diverse lifestyles of its
employees. With an aim
of boosting employee job
satisfaction, NSK also
runs seminars and other
programs to raise
awareness̶of both
managers and
employees̶on the need
for work style reform.
Work style reform seminar
To create a more open, amiable workplace that responds
to the needs of a diverse workforce, NSK’s first step of
action is providing support for parents of small children
and caregivers. While the Company’s priority in the past
has been to stay legally compliant in this area, it is now
beginning to take a more proactive role. Not only will NSK
work to provide comprehensive support for these
employees, but will also create a work environment where
they can maximize their full potential. Many employees
struggling with the time constraints of parenthood are still
very eager to excel in the workplace. For these parents,
NSK is offering flexible working hours on a trial basis, and
has started an onsite childcare service on working public
holidays when regular daycare facilities close down.
▶Support System for Parents and Caregivers*1
Parental leave
Reduced hours for
working parents
Caregiver leave
Reduced hours for
working caregivers
Exemption from
half-day limit
Re-employment
registration system
NSK
Through end of April
following child’s third birthday
(first five days are paid)
Through end of March of
child’s 6th grade year
Japanese law
Up to 18 months
(non-paid)*2
Up to 3 years
Up to 1 year
Up to 93 days
Up to 3 years
Up to 3 years
Usually limited to 12 half-days per year,
but unlimited for family care
Employees who resign to follow a transferring
spouse can register for re-employment at
NSK upon their return
*1 NSK and main group companies in Japan
*2 Changed to two years from October 1, 2017
External Assessments:
Eruboshi and Kurumin Certifications
In recognition for its efforts to support working parents
and the advancement of women in the workplace, the
Minister of Health, Labour, and Welfare awarded NSK
certification for Eruboshi*1 and Kurumin*2.
1. Eruboshi: Based on the Act of Promotion of Women’s Participation and
Advancement in the Workplace, this accreditation awarded by the Minister of
Health, Labour and Welfare goes to “companies and organizations working
proactively to create work environments where women can play an active role.”
2. Kurumin: Based on the Act for Measures to Support the Development of the
Next-Generation Children, NSK formulated an action plan as a general business
operator and received certification from the Minister of Health, Labour and
Welfare as a corporation that supports child raising.
NSK REPORT 2017
49
The Underlying Strength of Corporate Value
CSR / ESG Management
Material CSR Issues
5
Supply Chain Management
Material CSR Issues
6
Corporate Governance
Other related information
http://www.nsk.com/company/governance/index.html
Fair and Impartial Procurement
NSK’s Approach
NSK proactively strives to meet the expectations of society through its supply chain while strengthening the procurement
foundation that supports its business activities. To this end, NSK shares its approach to value creation with suppliers based
on the belief that cooperation is key to further the development of the supply chain as a whole.
Supply Chain Management
Promoting and Enhancing CSR Activities
NSK has built a system for supply chain management
centered on the Procurement Division headquarters that
promotes coordination between the functional division
headquarters, such as CSR Div. HQ, the Global Environment
Department, and QA Div. HQ, and its plants and the production
and procurement departments at Group companies. Global
procurement meetings attended by procurement officers from
each world region are held twice a year to discuss action
policies for CSR, the environment, and quality, as well as to
review the state of progress on related initiatives.
Building Relationships with Suppliers Based on Trust
NSK endeavors to build relationships of trust and forge
long-term cooperative relationships with its suppliers by
holding procurement policy briefings for key suppliers,
sending managers to suppliers to exchange information, and
collaborating on quality and technology issues.
We have established an internal reporting system
(whistleblower hotline) for anyone to anonymously convey
their criticisms and opinions, enabling us to identify issues at
an early stage and take corrective
measures. In fiscal 2016, the hotline
did not receive any calls.
NSK distributes the NSK Supplier CSR Guidelines to its suppliers
to gain their understanding and approval of its initiatives to
provide safe products, observe all legal requirements, respect
human rights, ensure occupational safety, and protect the
environment. In addition, basic business contracts contain
clauses that pertain to ESG (Environment, Society, and
Governance). We periodically ask our suppliers to take a CSR
self-assessment test to monitor the state of their activities and
reflect the results of these surveys in future measures.
In fiscal 2016, we asked approximately 500 suppliers in
Japan to conduct a self-assessment, and 87% responded. Based
on the results of the survey, we identified issues regarding the
implementation of CSR activities at second-tier suppliers. NSK
implored them to cooperate and improve their efforts at a
procurement policy briefing held in January 2017.
▶CSR Assessment
Results (FY2016)
Compliance
100%
Supply chain
involvement
80%
60%
40%
20%
0%
Human rights
and labor practices
Information
disclosure
Environment
Procurement policy briefing
Internal reporting
system leaflet
Activities to Improve Quality at Suppliers
Through regularly scheduled technology and quality
meetings, NSK shares issues with suppliers as a part
of ongoing activities to improve quality. Representatives
from NSK headquarters, regional headquarters and
plants around the world visit suppliers to audit
processes and suggest improvement measures with
the objective of enhancing the level of quality.
In fiscal 2016, NSK undertook a new initiative in
Japan to prevent serious quality problems by
coordinating more closely with key suppliers.
50
NSK REPORT 2017
Risk reduction
Local communities
Meeting Regulations for Information Disclosure
about Conflict Minerals
NSK has a policy of not using conflict minerals and takes care in
its procurement activities to avoid benefitting armed groups that
violate human rights. If involvement by armed forces is
suspected, NSK takes steps to avoid using the suspected parts or
materials. In 2013, the NSK Supplier CSR Guidelines were revised
to unequivocally prohibit the use of conflict minerals, and we have
endeavored to raise awareness of that among our suppliers.
Every year, we conduct a conflict mineral survey with cooperation
from the suppliers of parts, steel and other materials used in
NSK products. Surveys through 2016 have not identified any case
of conflict minerals produced in restricted regions.
Other related information
For further information on supply chain management,
please refer to our CSR Report
(NSK website: http://www.nsk.com/sustainability/csrReport/index.html).
Basic Philosophy
NSK believes it is essential to have systems that ensure transparent,
fair and timely decision making to raise our corporate value in a
sustainable manner over the long term. To realize this objective, the
Company is constructing its corporate governance systems based on
the following four guiding principles.
Policy on Creating a Corporate Governance Structure
1) To increase the efficiency and agility of management by
proactively delegating decision-making authority
regarding the execution of operations from the Board of
Directors to the Company’s executive organizations.
2) To establish oversight of the executive organizations by
supervisory organizations through the separation of the
former and the latter.
3) To strengthen supervisory organizations’ oversight of the
executive organizations through cooperation between the
4) To improve the fairness of management by strengthening
former and the latter.
compliance systems.
Corporate Governance Structure
Current Structure and Operating Status
NSK has adopted a Company with Three Committees system as its
form of corporate organization to better achieve the aforementioned
basic philosophy. As the business execution entity, the CEO has the
ultimate authority and responsibility for all operational executive
functions and makes decisions concerning the execution of business
by the executive officers appointed by directors. In line with that
guidance, the executive officers execute business based on a division
of responsibilities and duties. The Board of Directors determines
fundamental management policies that aim to contribute to the
sustained mid- and long-term improvement of corporate value, while
properly supervising the state of operational executive functions as a
supervisory organization. The Board of Directors comprises
non-independent directors with insight into business and industry and
independent directors who provide supervisory functions and advice
from an objective standpoint, taking the perspective of outside
stakeholders. In principle, the ratio of independent to non-independent
directors is at least one to three. As a Company with Three
Committees, NSK has three committees (Nominating, Audit and
Compensation) consisting mainly of independent directors. In the fiscal
year ended March 31, 2017, the Board of Directors met 10 times and
the Nominating, Audit and Compensation committees convened
meetings six times, 15 times and five times, respectively.
▶NSK’s Corporate Governance Structure
Independence of Independent Directors
NSK has set specific standards for independence, which are applied when
appointing independent directors. By applying these standards, NSK
mitigates the risk that a candidate might have a special relationship with
the Company’s management or its principal shareholders, or a conflict of
interest with general shareholders. All four of NSK’s independent
directors meet these standards of independence. The Company’s
independent directors, who possess a wide range of experience and deep
insight in business, management and fields of specialty, offer their advice
while supervising management from an independent standpoint, thereby
enhancing the vailidity of decision making by the Board of Directors.
Initiatives Geared toward Further Enhancements
Evaluation of the Board of Directors’ Effectiveness and
Training of Board Members
The Company verifies whether the functions of the Board of Directors are
being properly fulfilled and, to further strengthen its effectiveness, has
evaluations of the Board of Directors carried out by outside experts every
year. Based on the results of those evaluations, the Company endeavors
to increase the operational efficiency of the Board of Directors and
improve the strategic long-term discussions of the Board of Directors.
The Company provides training as necessary to directors when they are
appointed. The Company sends its outside directors on tours of business
sites in various regions to deepen their knowledge of matters distinct to
the NSK Group to enhance discussions at the Board of Directors.
▶Strengthening NSK’s Corporate Governance Structure
(Year to March 31)
● Became a Company with Three Committees in accordance with
revisions to Japan’s Companies Act
● Established the Compliance Committee
● Submitted a notification to the Tokyo Stock Exchange to confirm
the independence of all four independent directors
● Established independence criteria for the Company’s independent directors
● Became a company with committees pursuant to Japan’s Companies Act;
restructured the Compensation, Nominating and Audit committees to each
comprise two independent directors and one non-independent director
● Established the Internal Control Project Team (later merged into
the current Internal Audit Department)
2006
2005
● Established the Information Disclosure Team
(current Disclosure Committee)
● Established the Nominating Committee
● Adopted a company with committees system
● Established the Management Monitoring Office (current Internal
Audit Department) to undertake auditing functions and monitor the
operations of the Company
● Established the Voluntary Audit Committee
● Established the Crisis Management Committee
● Adopted an executive officer system and subsequently appointed
independent directors to the Company’s Board of Directors
● Established the Compensation Committee
2016
2013
2011
2007
2004
2003
2000
General Shareholders’ Meeting
Executive Organizations
President & Representative Executive Officer/CEO
Report
Direction
Report
Report
Report
Corporate Strategy Division
Headquarters
Compliance Committee
CSR Division Headquarters
Compliance Enhancement Office
Disclosure Committee
Crisis Management Committee
Inquiry
Decision-making support function
Operating
Committee
Information sharing
Executive
Direction
Officers Meeting
Cooperation
Direction
Monitoring function
Internal Audit Department
Direction
Cooperation
Election & dismissal of Directors
Proposal & report
Supervisory Organizations
Election & dismissal of
Executive Officers
Delegation of authority
Supervision
Board of Directors
Report
Election & dismissal
of each committee
member
Report
Compensation
Committee
Nominating
Committee
Audit
Committee
NSK REPORT 2017
51
Material CSR Issues
5
Supply Chain Management
Material CSR Issues
6
Corporate Governance
Other related information
http://www.nsk.com/company/governance/index.html
Basic Philosophy
NSK believes it is essential to have systems that ensure transparent,
fair and timely decision making to raise our corporate value in a
sustainable manner over the long term. To realize this objective, the
Company is constructing its corporate governance systems based on
the following four guiding principles.
Policy on Creating a Corporate Governance Structure
1) To increase the efficiency and agility of management by
proactively delegating decision-making authority
regarding the execution of operations from the Board of
Directors to the Company’s executive organizations.
2) To establish oversight of the executive organizations by
supervisory organizations through the separation of the
former and the latter.
3) To strengthen supervisory organizations’ oversight of the
executive organizations through cooperation between the
former and the latter.
4) To improve the fairness of management by strengthening
compliance systems.
Corporate Governance Structure
Current Structure and Operating Status
NSK has adopted a Company with Three Committees system as its
form of corporate organization to better achieve the aforementioned
basic philosophy. As the business execution entity, the CEO has the
ultimate authority and responsibility for all operational executive
functions and makes decisions concerning the execution of business
by the executive officers appointed by directors. In line with that
guidance, the executive officers execute business based on a division
of responsibilities and duties. The Board of Directors determines
fundamental management policies that aim to contribute to the
sustained mid- and long-term improvement of corporate value, while
properly supervising the state of operational executive functions as a
supervisory organization. The Board of Directors comprises
non-independent directors with insight into business and industry and
independent directors who provide supervisory functions and advice
from an objective standpoint, taking the perspective of outside
stakeholders. In principle, the ratio of independent to non-independent
directors is at least one to three. As a Company with Three
Committees, NSK has three committees (Nominating, Audit and
Compensation) consisting mainly of independent directors. In the fiscal
year ended March 31, 2017, the Board of Directors met 10 times and
the Nominating, Audit and Compensation committees convened
meetings six times, 15 times and five times, respectively.
▶NSK’s Corporate Governance Structure
Independence of Independent Directors
NSK has set specific standards for independence, which are applied when
appointing independent directors. By applying these standards, NSK
mitigates the risk that a candidate might have a special relationship with
the Company’s management or its principal shareholders, or a conflict of
interest with general shareholders. All four of NSK’s independent
directors meet these standards of independence. The Company’s
independent directors, who possess a wide range of experience and deep
insight in business, management and fields of specialty, offer their advice
while supervising management from an independent standpoint, thereby
enhancing the vailidity of decision making by the Board of Directors.
Initiatives Geared toward Further Enhancements
Evaluation of the Board of Directors’ Effectiveness and
Training of Board Members
The Company verifies whether the functions of the Board of Directors are
being properly fulfilled and, to further strengthen its effectiveness, has
evaluations of the Board of Directors carried out by outside experts every
year. Based on the results of those evaluations, the Company endeavors
to increase the operational efficiency of the Board of Directors and
improve the strategic long-term discussions of the Board of Directors.
The Company provides training as necessary to directors when they are
appointed. The Company sends its outside directors on tours of business
sites in various regions to deepen their knowledge of matters distinct to
the NSK Group to enhance discussions at the Board of Directors.
▶Strengthening NSK’s Corporate Governance Structure
(Year to March 31)
2016
2013
2011
2007
2006
2005
2004
2003
2000
● Became a Company with Three Committees in accordance with
revisions to Japan’s Companies Act
● Established the Compliance Committee
● Submitted a notification to the Tokyo Stock Exchange to confirm
the independence of all four independent directors
● Established independence criteria for the Company’s independent directors
● Became a company with committees pursuant to Japan’s Companies Act;
restructured the Compensation, Nominating and Audit committees to each
comprise two independent directors and one non-independent director
● Established the Internal Control Project Team (later merged into
the current Internal Audit Department)
● Established the Information Disclosure Team
(current Disclosure Committee)
● Established the Nominating Committee
● Adopted a company with committees system
● Established the Management Monitoring Office (current Internal
Audit Department) to undertake auditing functions and monitor the
operations of the Company
● Established the Voluntary Audit Committee
● Established the Crisis Management Committee
● Adopted an executive officer system and subsequently appointed
independent directors to the Company’s Board of Directors
● Established the Compensation Committee
General Shareholders’ Meeting
The Underlying Strength of Corporate Value
CSR / ESG Management
Fair and Impartial Procurement
NSK’s Approach
NSK proactively strives to meet the expectations of society through its supply chain while strengthening the procurement
foundation that supports its business activities. To this end, NSK shares its approach to value creation with suppliers based
on the belief that cooperation is key to further the development of the supply chain as a whole.
Supply Chain Management
Promoting and Enhancing CSR Activities
NSK has built a system for supply chain management
NSK distributes the NSK Supplier CSR Guidelines to its suppliers
centered on the Procurement Division headquarters that
to gain their understanding and approval of its initiatives to
promotes coordination between the functional division
provide safe products, observe all legal requirements, respect
headquarters, such as CSR Div. HQ, the Global Environment
human rights, ensure occupational safety, and protect the
Department, and QA Div. HQ, and its plants and the production
environment. In addition, basic business contracts contain
and procurement departments at Group companies. Global
clauses that pertain to ESG (Environment, Society, and
procurement meetings attended by procurement officers from
Governance). We periodically ask our suppliers to take a CSR
each world region are held twice a year to discuss action
self-assessment test to monitor the state of their activities and
policies for CSR, the environment, and quality, as well as to
reflect the results of these surveys in future measures.
review the state of progress on related initiatives.
Building Relationships with Suppliers Based on Trust
on the results of the survey, we identified issues regarding the
NSK endeavors to build relationships of trust and forge
long-term cooperative relationships with its suppliers by
holding procurement policy briefings for key suppliers,
sending managers to suppliers to exchange information, and
collaborating on quality and technology issues.
We have established an internal reporting system
(whistleblower hotline) for anyone to anonymously convey
their criticisms and opinions, enabling us to identify issues at
an early stage and take corrective
measures. In fiscal 2016, the hotline
did not receive any calls.
Procurement policy briefing
Internal reporting
system leaflet
Activities to Improve Quality at Suppliers
Through regularly scheduled technology and quality
meetings, NSK shares issues with suppliers as a part
of ongoing activities to improve quality. Representatives
from NSK headquarters, regional headquarters and
plants around the world visit suppliers to audit
processes and suggest improvement measures with
the objective of enhancing the level of quality.
In fiscal 2016, NSK undertook a new initiative in
Japan to prevent serious quality problems by
coordinating more closely with key suppliers.
50
NSK REPORT 2017
In fiscal 2016, we asked approximately 500 suppliers in
Japan to conduct a self-assessment, and 87% responded. Based
implementation of CSR activities at second-tier suppliers. NSK
implored them to cooperate and improve their efforts at a
procurement policy briefing held in January 2017.
▶CSR Assessment
Results (FY2016)
Compliance
100%
Supply chain
involvement
Human rights
and labor practices
80%
60%
40%
20%
0%
Information
disclosure
Environment
Risk reduction
Local communities
Meeting Regulations for Information Disclosure
about Conflict Minerals
NSK has a policy of not using conflict minerals and takes care in
its procurement activities to avoid benefitting armed groups that
violate human rights. If involvement by armed forces is
suspected, NSK takes steps to avoid using the suspected parts or
materials. In 2013, the NSK Supplier CSR Guidelines were revised
to unequivocally prohibit the use of conflict minerals, and we have
endeavored to raise awareness of that among our suppliers.
Every year, we conduct a conflict mineral survey with cooperation
from the suppliers of parts, steel and other materials used in
NSK products. Surveys through 2016 have not identified any case
of conflict minerals produced in restricted regions.
Other related information
For further information on supply chain management,
please refer to our CSR Report
(NSK website: http://www.nsk.com/sustainability/csrReport/index.html).
Election & dismissal of Directors
Election & dismissal of
Executive Officers
Delegation of authority
Supervision
Proposal & report
Supervisory Organizations
Board of Directors
Report
Election & dismissal
of each committee
member
Report
Corporate Strategy Division
Headquarters
Compliance Committee
CSR Division Headquarters
Compliance Enhancement Office
Disclosure Committee
Crisis Management Committee
Direction
Monitoring function
Internal Audit Department
Direction
Cooperation
Executive Organizations
President & Representative Executive Officer/CEO
Compensation
Committee
Nominating
Committee
Audit
Committee
NSK REPORT 2017
51
Decision-making support function
Operating
Committee
Information sharing
Executive
Officers Meeting
Report
Direction
Report
Report
Report
Cooperation
Direction
Inquiry
The Underlying Strength of Corporate Value
CSR / ESG Management
Corporate Governance
Directors/Officers’ Compensation
１．Policy for Directors/Officers’ Compensation
The compensation package for NSK’s Officers consists of basic compensation, which includes fixed compensation, a performance-based
salary that fluctuates and stock compensation, whereas “directors’ compensation” and “executive officers’ compensation” are separately
determined. When a director also serves as an executive officer, the total of each compensation amount shall be paid.
Actions for Japan’s Corporate Governance Code
NSK shall adhere to each principle of the Code. In addition, NSK’s implementation status of the 11 items necessary for
disclosure is as follows. For details, please refer to the following NSK website ①. This page is a summary of the relevant
sections of the “NSK Corporate Governance Report” (in Japanese only).
① http://www.nsk.com/company/governance/index.html ② http://www.nsk.com/investors/index.html
In addition, in the event a member of a management team of another
company such as a subsidiary or an affiliate, etc., assumes an
executive officer position, compensation will be determined separately.
the title of the executive officer. Moreover, an additional amount
will be paid to executive officers with representation rights.
(2) Performance-based salary
Using the consolidated sales operating income margin and the
consolidated ROE targeted in the Company’s mid-term management
plan and the operating income margin and cash flow as numerical
targets for a single fiscal year and an index to evaluate
quality-contributing activity as criteria, the total amount of
performance-based salary is calculated. For the compensation
amount for the respective executive officers, the title and achievement
level in the performance of job duties are evaluated for payment.
(3) Stock compensation
To further enhance the commitment of executive officers to a
sustainable increase in corporate value, NSK introduced a stock
compensation program using a Board Benefit Trust system. Under the
program, NSK grants executive officers shares of NSK stock at
retirement based on a point system whereby points are awarded
depending on the title of the executive officer and according to the
value of the stock. However, NSK will compensate executive officers
with money acquired by converting a certain portion of NSK’s shares
into cash.
２．Decision-Making Process for Directors/Officers’ Compensation
[Directors’ Compensation]
The directors’ compensation package consists of basic
compensation and stock compensation.
(1) Basic compensation
Basic compensation is determined based on whether the director
is an independent director or a non-independent director in
addition to the director’s role on committees to which the director
belongs and the Board of Directors.
(2) Stock compensation
To further enhance the commitment of directors to a sustainable
increase in corporate value, NSK introduced a stock compensation
program using a Board Benefit Trust system. Under the program,
NSK grants directors shares of NSK stock at retirement based on
a point system whereby points are awarded depending on whether
the director is independent or non-independent and according to
the value of the stock. However, NSK will compensate directors
with money acquired by converting a certain portion of NSK’s
shares into cash. For directors who also serve as executive
officers, performance shares as directors will not be provided.
[Executive Officer’s Compensation]
The executive officer compensation package consists of basic
compensation, a performance-based salary and stock compensation.
(1) Basic compensation
For basic compensation, the amount is determined according to
[Principle 1-4. Cross-Shareholdings]
(1) Policy for Cross-Shareholdings
From the perspective of improving corporate value over the
medium to long term, NSK holds the shares of other listed
companies as cross-shareholdings based on a comprehensive
consideration of the business stability, growth, partnership and
reliability. The Board of Directors receives periodic reporting for
the objectives and rationale behind the cross-shareholdings and
supervises such cross-shareholdings.
(2) Criteria of Exercising Voting Rights as to Our Cross-Shareholdings
The exercising of voting rights as to our cross-shareholdings will
be determined from the perspectives of whether the agenda leads
to damaging shareholder value and whether there is a contribution
to improving the corporate value of NSK and the companies in
which NSK owns shares over the medium to long term.
[Principle 1-7. Related Party Transactions]
NSK’s Board of Directors approves transactions (related party
transactions) between NSK and our executive officers/major
shareholders in accordance with applicable laws and regulations
including the Companies Act and internal regulations to ensure
that such transactions do not harm the interests of the Company
or the common interests of our shareholders and receives
periodic reporting. Furthermore, the Audit Committee carries
out audits on transactions based on necessity.
[Principle 3-1. Enhanced Information Disclosure]
i) Company objectives, business strategies and business plans, etc.
NSK has stipulated a mission statement, and based on the
mission statement, the Board of Directors resolves mid- to
long-term business strategies and business plans, etc. For our
mission statement, please refer to page 1 of this NSK Report.
For our business strategies and business plans, please refer to
this NSK Report and NSK’s website ② above.
ii) Basic Views and Guidelines on Corporate Governance
Please refer to page 51 of this NSK Report.
iii) Policies and Procedures of the Compensation Committee in
Determining the Compensation of Executive Officers and
Directors
Please refer to page 52 of this NSK Report.
iv) Policies and Procedures in the Appointment of Executive Officers
and the Nomination of Directors by the Nominating Committee
The Company’s Directors are expected to have extensive knowledge
about business and management or have field of expertise, as well
as high ethical standards as managers and insight into corporate
governance, with the ability to make objective decisions while
supervising business execution. For the selection of Directors,
based on our expected composition of the Board of Directors and
the qualifications of Directors according to the corporate
governance system, candidates for Director are selected by the
Nominating Committee and presented by the Board of Directors for
a vote at the ordinary general meeting of shareholders.
v) Explanation of Individual Appointment and Nomination When
the Nominating Committee Selects Executive Officers and
Appoints Candidates for Directors
Reasons for the nomination of candidates for Director discussed
in the Nominating Committee are described in the notice of the
ordinary general meeting of shareholders.
[Supplementary Principle 4-1-1. Roles and
Responsibilities of the Board of Directors]
The Board of Directors decides basic management policies with
the objective of contributing to the sustained improvement of
corporate value over the medium to long term for the NSK
Group. On this basis, the Board of Directors proactively delegates
authority to executive officers to make decisions related to
business execution and supervises the state of business
execution to ensure transparent and fair management and to
facilitate rapid decision making. For more information about key
decisions made by the Board of Directors, see NSK’s website ①.
The Board of Directors debates strategic long-term issues from
the standpoint of stakeholders, creates long-term strategies and
advises the executive officers.
[Principle 4-8. Effective Use of the Independent Directors]
NSK has appointed four independent directors who have beneficial
expertise for NSK, excellent personalities and wide knowledge, as
well as the ability to fulfill their roles and responsibilities with the
aim of contributing to the sustainable growth of the Company and
increasing corporate value over the medium to long term. In
principle, the ratio of independent to non-independent directors is
at least one to three. Meetings consisting of only independent
directors are held periodically to facilitate the open exchange of
opinions and sharing of knowledge.
[Principle 4-9. Independence Standards for
the Independent Directors]
Please refer to page 51 of this NSK Report.
Please refer to our website ① above for details of the
independence standards for independent directors.
[Supplementary Principle 4-11-1. Composition of the
Board of Directors]
Please refer to page 51 of this NSK Report.
[Supplementary Principle 4-11-2. Concurrent Positions
of the Board of Directors]
The concurrency of outside directors is disclosed in meeting
convocation notices , business reports, securities reports, etc.
[Supplementary Principle 4-11-3. Evaluation of the
Board of Directors Effectiveness]
Please refer to page 51 of this NSK Report.
The results of the evaluation confirmed that NSK’s Board of
Directors effectively functions as a structure that makes
transparent, fair and appropriate decisions on a timely basis. It
also confirmed that steady progress has been made with activities
aimed at improving the effectiveness of the Board of Directors
based on the results of the effectiveness evaluation last year. NSK
strives to increase the effectiveness of the Board of Directors to
contribute to the further improvement of corporate value, such as
by enhancing discussions about strategic long-term issues.
[Supplementary Principle 4-14-2. Training of the Officers]
Please refer to page 51 of this NSK Report.
The Company provides training about the Companies Act and
other laws and regulations, the Company’s finances, operations
and corporate governance. All directors receive detailed
explanations about matters before they are discussed at Board of
Directors meetings.
the Shareholders]
[Principle 5-1. Policy for a Constructive Dialogue with
Please refer to page 56 of this NSK Report.
The Company will not disclose or divulge insider information in
dialogue with shareholders and investors. When disclosing
important information regarding the Company that might
influence investment decisions of investors in compliance with
relevant laws and regulations, the Disclosure Committee
confirms its timeliness and appropriateness. In addition, the
Company internally regulates dialogues regarding book closings
during one week before the disclosure of a book closing, which is
referred to as the “Silent Period.”
３．Directors/Officers’ Compensation, etc.
The amount of compensation for directors and executive officers for the year ended March 31, 2017, was as follows.
■ Compensation Total by Classification of Directors/Officers and Compensation Type and No. of Directors/Officers
Compensation,
etc., Total
(￥ Millions)
Fixed Compensation
Performance-Based Salary Stock Compensation
Stock Options
Retirement Benefits
No. of Directors/
Officers
Amount
(￥ Millions)
No. of Directors/
Officers
Amount
(￥ Millions)
No. of Directors/
Officers
Amount
(￥ Millions)
No. of Directors/
Officers
Amount
(￥ Millions)
No. of Directors/
Officers
Amount
(￥ Millions)
164
60
1,860
11
4
36
132
43
814
ー
ー
32
ー
ー
2
4
11
6
8
4
18
10
604
35
242
35
159
1
ー
28
1
ー
39
Classification
Directors
(Non-independent)
Directors
(Independent)
Executive
Officers
Notes:
1. Compensation (excluding stock compensation and retirement benefits) for directors (non-independent) includes compensation for directors who also serve as executive officers.
2. The previous compensation package for Officers of NSK comprised basic (fixed) compensation, performance-based salary, a stock option program (share subscription rights) and
retirement benefits. However, at the Compensation Committee meeting held on May 16, 2016, it was decided to introduce a stock compensation program and end the stock option
and retirement benefit programs.
3. The amount of performance-based salary is the planned payment amount as of July 3, 2017, based on the results for the year ended March 31, 2017. The amount of
performance-based salary as of July 1, 2016, based on the results for the year ended March 31, 2016, was ¥632 million.
4. In the Board Benefit Trust system, the amount of stock compensation is commensurate with the number of points awarded for the fiscal year and booked as costs.
5. The amount of stock options is equivalent to the cost recognized during the fiscal year within compensation related to share subscription rights that were allocated as stock options
on August 22, 2014, and August 21, 2015.
6. The amount of the retirement benefit is the accrued officers’ retirement benefits during the period from April to June 2016, when the system was discontinued. Retirement benefits
were ¥69 million for one director and ¥457 million for seven executive officers who retired during the fiscal year.
7. Figures listed above are rounded down to one million yen.
■ Directors/Officers Receiving a Total of ¥100 Million or More in Consolidated Compensation
Name
Toshihiro
Uchiyama
Adrian
Browne
Jürgen
Ackermann
Steven
Beckman
Consolidated
Compensation,
etc., Total
(￥ Millions)
136
133
109
159
Title
Company
Director
NSK Ltd.
Executive
Officer
Executive
Officer
NSK Ltd.
NSK Ltd.
CEO
NSK Europe Ltd.
CEO
NSK Americas, Inc.
Amount for Each Item of Consolidated Compensation, etc.
Fixed Compensation
(￥ Millions)
Performance-Based
Salary (￥ Millions)
Stock Compensation
(￥ Millions)
Stock Options
(￥ Millions)
Retirement Benefit
(￥ Millions)
7
42
65
53
52
ー
45
45
50
104
ー
23
1
1
1
1
14
4
ー
ー
ー
2
16
3
0
52
NSK REPORT 2017
NSK REPORT 2017
53
The Underlying Strength of Corporate Value
CSR / ESG Management
Corporate Governance
Directors/Officers’ Compensation
１．Policy for Directors/Officers’ Compensation
The compensation package for NSK’s Officers consists of basic compensation, which includes fixed compensation, a performance-based
salary that fluctuates and stock compensation, whereas “directors’ compensation” and “executive officers’ compensation” are separately
determined. When a director also serves as an executive officer, the total of each compensation amount shall be paid.
２．Decision-Making Process for Directors/Officers’ Compensation
[Directors’ Compensation]
The directors’ compensation package consists of basic
compensation and stock compensation.
(1) Basic compensation
Basic compensation is determined based on whether the director
is an independent director or a non-independent director in
addition to the director’s role on committees to which the director
belongs and the Board of Directors.
(2) Stock compensation
To further enhance the commitment of directors to a sustainable
increase in corporate value, NSK introduced a stock compensation
program using a Board Benefit Trust system. Under the program,
NSK grants directors shares of NSK stock at retirement based on
a point system whereby points are awarded depending on whether
the director is independent or non-independent and according to
the value of the stock. However, NSK will compensate directors
with money acquired by converting a certain portion of NSK’s
shares into cash. For directors who also serve as executive
officers, performance shares as directors will not be provided.
[Executive Officer’s Compensation]
The executive officer compensation package consists of basic
compensation, a performance-based salary and stock compensation.
(1) Basic compensation
For basic compensation, the amount is determined according to
３．Directors/Officers’ Compensation, etc.
the title of the executive officer. Moreover, an additional amount
will be paid to executive officers with representation rights.
(2) Performance-based salary
Using the consolidated sales operating income margin and the
consolidated ROE targeted in the Company’s mid-term management
plan and the operating income margin and cash flow as numerical
targets for a single fiscal year and an index to evaluate
quality-contributing activity as criteria, the total amount of
performance-based salary is calculated. For the compensation
amount for the respective executive officers, the title and achievement
level in the performance of job duties are evaluated for payment.
(3) Stock compensation
To further enhance the commitment of executive officers to a
sustainable increase in corporate value, NSK introduced a stock
compensation program using a Board Benefit Trust system. Under the
program, NSK grants executive officers shares of NSK stock at
retirement based on a point system whereby points are awarded
depending on the title of the executive officer and according to the
value of the stock. However, NSK will compensate executive officers
with money acquired by converting a certain portion of NSK’s shares
into cash.
In addition, in the event a member of a management team of another
company such as a subsidiary or an affiliate, etc., assumes an
executive officer position, compensation will be determined separately.
The amount of compensation for directors and executive officers for the year ended March 31, 2017, was as follows.
■ Compensation Total by Classification of Directors/Officers and Compensation Type and No. of Directors/Officers
Compensation,
Fixed Compensation
Performance-Based Salary Stock Compensation
Stock Options
Retirement Benefits
Classification
etc., Total
(￥ Millions)
No. of Directors/
Amount
No. of Directors/
Amount
No. of Directors/
Amount
No. of Directors/
Amount
No. of Directors/
Amount
Officers
(￥ Millions)
Officers
(￥ Millions)
Officers
(￥ Millions)
Officers
(￥ Millions)
Officers
(￥ Millions)
Directors
(Non-independent)
Directors
(Independent)
Executive
Officers
164
60
1,860
11
4
36
132
43
814
ー
ー
32
ー
ー
2
4
11
6
8
4
18
10
604
35
242
35
159
1
ー
28
1
ー
39
Notes:
1. Compensation (excluding stock compensation and retirement benefits) for directors (non-independent) includes compensation for directors who also serve as executive officers.
2. The previous compensation package for Officers of NSK comprised basic (fixed) compensation, performance-based salary, a stock option program (share subscription rights) and
retirement benefits. However, at the Compensation Committee meeting held on May 16, 2016, it was decided to introduce a stock compensation program and end the stock option
and retirement benefit programs.
3. The amount of performance-based salary is the planned payment amount as of July 3, 2017, based on the results for the year ended March 31, 2017. The amount of
performance-based salary as of July 1, 2016, based on the results for the year ended March 31, 2016, was ¥632 million.
4. In the Board Benefit Trust system, the amount of stock compensation is commensurate with the number of points awarded for the fiscal year and booked as costs.
5. The amount of stock options is equivalent to the cost recognized during the fiscal year within compensation related to share subscription rights that were allocated as stock options
on August 22, 2014, and August 21, 2015.
6. The amount of the retirement benefit is the accrued officers’ retirement benefits during the period from April to June 2016, when the system was discontinued. Retirement benefits
were ¥69 million for one director and ¥457 million for seven executive officers who retired during the fiscal year.
7. Figures listed above are rounded down to one million yen.
■ Directors/Officers Receiving a Total of ¥100 Million or More in Consolidated Compensation
Name
Title
Company
Consolidated
Compensation,
etc., Total
(￥ Millions)
Amount for Each Item of Consolidated Compensation, etc.
Fixed Compensation
Performance-Based
Stock Compensation
Stock Options
Retirement Benefit
(￥ Millions)
Salary (￥ Millions)
(￥ Millions)
(￥ Millions)
(￥ Millions)
Toshihiro
Uchiyama
Adrian
Browne
Jürgen
Ackermann
Steven
Beckman
136
133
109
159
Director
NSK Ltd.
Executive
Officer
Executive
Officer
NSK Ltd.
NSK Ltd.
CEO
NSK Europe Ltd.
CEO
NSK Americas, Inc.
7
42
65
53
52
ー
45
45
50
104
ー
23
1
1
1
1
14
4
ー
ー
ー
2
16
3
0
Actions for Japan’s Corporate Governance Code
NSK shall adhere to each principle of the Code. In addition, NSK’s implementation status of the 11 items necessary for
disclosure is as follows. For details, please refer to the following NSK website ①. This page is a summary of the relevant
sections of the “NSK Corporate Governance Report” (in Japanese only).
① http://www.nsk.com/company/governance/index.html ② http://www.nsk.com/investors/index.html
[Principle 1-4. Cross-Shareholdings]
(1) Policy for Cross-Shareholdings
From the perspective of improving corporate value over the
medium to long term, NSK holds the shares of other listed
companies as cross-shareholdings based on a comprehensive
consideration of the business stability, growth, partnership and
reliability. The Board of Directors receives periodic reporting for
the objectives and rationale behind the cross-shareholdings and
supervises such cross-shareholdings.
(2) Criteria of Exercising Voting Rights as to Our Cross-Shareholdings
The exercising of voting rights as to our cross-shareholdings will
be determined from the perspectives of whether the agenda leads
to damaging shareholder value and whether there is a contribution
to improving the corporate value of NSK and the companies in
which NSK owns shares over the medium to long term.
[Principle 1-7. Related Party Transactions]
NSK’s Board of Directors approves transactions (related party
transactions) between NSK and our executive officers/major
shareholders in accordance with applicable laws and regulations
including the Companies Act and internal regulations to ensure
that such transactions do not harm the interests of the Company
or the common interests of our shareholders and receives
periodic reporting. Furthermore, the Audit Committee carries
out audits on transactions based on necessity.
[Principle 3-1. Enhanced Information Disclosure]
i) Company objectives, business strategies and business plans, etc.
NSK has stipulated a mission statement, and based on the
mission statement, the Board of Directors resolves mid- to
long-term business strategies and business plans, etc. For our
mission statement, please refer to page 1 of this NSK Report.
For our business strategies and business plans, please refer to
this NSK Report and NSK’s website ② above.
ii) Basic Views and Guidelines on Corporate Governance
Please refer to page 51 of this NSK Report.
iii) Policies and Procedures of the Compensation Committee in
Determining the Compensation of Executive Officers and
Directors
Please refer to page 52 of this NSK Report.
iv) Policies and Procedures in the Appointment of Executive Officers
and the Nomination of Directors by the Nominating Committee
The Company’s Directors are expected to have extensive knowledge
about business and management or have field of expertise, as well
as high ethical standards as managers and insight into corporate
governance, with the ability to make objective decisions while
supervising business execution. For the selection of Directors,
based on our expected composition of the Board of Directors and
the qualifications of Directors according to the corporate
governance system, candidates for Director are selected by the
Nominating Committee and presented by the Board of Directors for
a vote at the ordinary general meeting of shareholders.
v) Explanation of Individual Appointment and Nomination When
the Nominating Committee Selects Executive Officers and
Appoints Candidates for Directors
Reasons for the nomination of candidates for Director discussed
in the Nominating Committee are described in the notice of the
ordinary general meeting of shareholders.
[Supplementary Principle 4-1-1. Roles and
Responsibilities of the Board of Directors]
The Board of Directors decides basic management policies with
the objective of contributing to the sustained improvement of
corporate value over the medium to long term for the NSK
Group. On this basis, the Board of Directors proactively delegates
authority to executive officers to make decisions related to
business execution and supervises the state of business
execution to ensure transparent and fair management and to
facilitate rapid decision making. For more information about key
decisions made by the Board of Directors, see NSK’s website ①.
The Board of Directors debates strategic long-term issues from
the standpoint of stakeholders, creates long-term strategies and
advises the executive officers.
[Principle 4-8. Effective Use of the Independent Directors]
NSK has appointed four independent directors who have beneficial
expertise for NSK, excellent personalities and wide knowledge, as
well as the ability to fulfill their roles and responsibilities with the
aim of contributing to the sustainable growth of the Company and
increasing corporate value over the medium to long term. In
principle, the ratio of independent to non-independent directors is
at least one to three. Meetings consisting of only independent
directors are held periodically to facilitate the open exchange of
opinions and sharing of knowledge.
[Principle 4-9. Independence Standards for
the Independent Directors]
Please refer to page 51 of this NSK Report.
Please refer to our website ① above for details of the
independence standards for independent directors.
[Supplementary Principle 4-11-1. Composition of the
Board of Directors]
Please refer to page 51 of this NSK Report.
[Supplementary Principle 4-11-2. Concurrent Positions
of the Board of Directors]
The concurrency of outside directors is disclosed in meeting
convocation notices , business reports, securities reports, etc.
[Supplementary Principle 4-11-3. Evaluation of the
Board of Directors Effectiveness]
Please refer to page 51 of this NSK Report.
The results of the evaluation confirmed that NSK’s Board of
Directors effectively functions as a structure that makes
transparent, fair and appropriate decisions on a timely basis. It
also confirmed that steady progress has been made with activities
aimed at improving the effectiveness of the Board of Directors
based on the results of the effectiveness evaluation last year. NSK
strives to increase the effectiveness of the Board of Directors to
contribute to the further improvement of corporate value, such as
by enhancing discussions about strategic long-term issues.
[Supplementary Principle 4-14-2. Training of the Officers]
Please refer to page 51 of this NSK Report.
The Company provides training about the Companies Act and
other laws and regulations, the Company’s finances, operations
and corporate governance. All directors receive detailed
explanations about matters before they are discussed at Board of
Directors meetings.
[Principle 5-1. Policy for a Constructive Dialogue with
the Shareholders]
Please refer to page 56 of this NSK Report.
The Company will not disclose or divulge insider information in
dialogue with shareholders and investors. When disclosing
important information regarding the Company that might
influence investment decisions of investors in compliance with
relevant laws and regulations, the Disclosure Committee
confirms its timeliness and appropriateness. In addition, the
Company internally regulates dialogues regarding book closings
during one week before the disclosure of a book closing, which is
referred to as the “Silent Period.”
52
NSK REPORT 2017
NSK REPORT 2017
53
The Underlying Strength of Corporate Value
CSR / ESG Management
Corporate Governance
Takeover Defense
NSK introduced response measures to Large-scale Purchases of NSK shares (“Takeover Defenses”) at the
annual general meeting of shareholders held in June 2008, and subsequently renewed these Takeover Defenses
with the approval of shareholders at the annual general meetings of shareholders held in June 2011, June 2014,
and June 2017. At the annual general meeting of shareholders held in June 2017, the approval rate for the
Takeover Defenses was 71.03% (compared with 68.4% at the June 2014 general meeting of shareholders).
NSK is a stock company, the shares of which are traded on capital markets, and the free trading of its stock by all shareholders and investors is
permitted. The Company believes that, in the case of a large-scale purchase of NSK shares, the decision whether to accept such a purchase
should ultimately be left to the shareholders.
However, taking into account such factors as social and economic changes and recent capital market conditions, there is a possibility that
a sudden and unsolicited large-scale purchase of the Company’s shares could occur without necessary and sufficient information being
disclosed, and without an opportunity to consider the proposal being given to the shareholders and investors of the target company, or without
the target company’s board of directors being provided with information and time to express its opinion and prepare an alternative proposal.
Such large-scale purchases of shares could damage NSK’s corporate value and the common interests of its shareholders, such as cases in
which the purchaser does not intend to manage the Company reasonably or in good faith.
Therefore, NSK decided to introduce and subsequently renew the Takeover Defenses for the purpose of (i) allowing NSK’s shareholders,
who will make the final decision, to sufficiently understand the specifics of such a proposal by any person attempting a large-scale purchase of
shares and to make an appropriate decision, and (ii) securing and increasing NSK’s corporate value or the common interests of the Company’s
shareholders.
Details of the Company’s Takeover Defenses are published on our website. Please refer to “Continuation of the Response Measures to
Large-scale Purchases of the Company Shares (Takeover Defenses)” as of May 23, 2017.
http://www.nsk.com/company/governance/index.html#tab4
Major Changes Made in June 2017
(1) It was decided to limit the period during which the Board of Directors can request the provision of information from the
Large-scale Share Purchaser.
The period is limited to 60 days from the date a list is provided containing the information requested from the Large-scale Share Purchaser
(2) It was specified that the Board of Directors’ Evaluation Period can be extended only once.
(3) It was decided to establish the Independent Committee as an organization that is independent from the Board of Directors.
The Independent Committee members shall be appointed from independent outside directors and other outside
persons who shall be recognized as independent, etc. As of this report publication date, the members of the
Independent Committee consist of four independent directors and one lawyer.
The purpose of NSK’s Takeover Defenses is to ensure there is sufficient information and time for shareholders to examine
this information before they make a final decision on a proposal by any person attempting a large-scale purchase of shares.
▶Flow Chart of the Procedures Related to the Plan
Emergence of a Large-scale Share Purchaser (20% or greater of the share certificates)
In case of compliance with the Large-scale Share Purchase Rules
In case of non-compliance with the Large-scale Share Purchase Rules
Large-scale Share Purchaser ➡ President & CEO:
Submit “Statement of Intention”
Within 10 business days
Board of Directors ➡ Large-scale Share Purchaser:
Send the List of Necessary Information
Within 60 days
Large-scale Share Purchaser ➡ President & CEO:
Provide the Necessary Information
The Board of Directors Evaluation
● Evaluate and examine the proposal of Large-scale Share Purchase, negotiate with
the Large-scale Share Purchaser, form its opinion on the Large-scale Share
Purchase and/or elaborate alternative proposals.
● Period: up to 60 days (purchase of all the Company’s shares via a takeover bid in
JPY) or up to 90 days (any other Large-scale Share Purchase) [Note 1]
Within 60 days
Board of Directors
Consult regarding whether to trigger the countermeasures
Decide whether to trigger the countermeasures
(allotment of the Share Options without contribution)
Respect for the Independent Committee’s recommendation
to the greatest extent possible [Note 2]
Consultation
Recommendation
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d
n
I
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h
T
Shareholders’ Meeting
For triggering the countermeasures (allotment of the Share Options without contribution)
Passed
Voted
down
Passed (unanimous)
Voted down
Don’t trigger the countermeasures (start of the Large-scale Share Purchase)
Trigger the countermeasures (allotment of the Share Options without contribution)
[Note 1] Provided, however, that the period may, after consulting with the Independent Committee and by respecting the Independent Committee’s
recommendation to the greatest extent possible, be extended up to an additional 30 days by unanimous resolution of the board of directors including
the outside directors (provided that the extension may be made only once.).
[Note 2] The board of directors may trigger the countermeasures in the following cases, provided, however, that the determination to trigger the
countermeasures shall be made by unanimous resolution of the board of directors including the outside directors, after consulting with the
Independent Committee and by respecting the Independent Committee’s recommendation to the greatest extent possible:
① when the Large-scale Share Purchaser does not comply with the Large-scale Share Purchase Rules;
② when the Large-scale Share Purchase falls under certain categories and such Large-scale Share Purchase is reasonably considered to materially
harm the Company’s corporate value and shareholders’ common interests.
Except for the cases of [Note 1] and [Note 2], the resolution of the board of directors shall be made by a majority of the directors who are present at the meeting.
Material CSR Issues
7
Compliance
Basic Philosophy
The foundation of compliance at NSK is the NSK Code of
Corporate Ethics, which outlines universal principles that must
be followed by all officers and employees.
NSK aims to remain a company that is trusted by
international society and local communities by adhering to the
laws and regulations of each country in its corporate activities
around the world, and by taking actions based on high ethical
standards as a corporate citizen.
NSK’s Efforts to Enhance Compliance
NSK makes every effort to advance business activities based on
CSR and stringent compliance with laws and regulations on a
Companywide basis. Our main efforts include the continuous
provision of mandatory compliance training and education for all
officers and employees. In addition, we had issued the NSK
Compliance Guidebook, which contains detailed explanations of
the NSK Code of Corporate Ethics, in Japanese, English, Chinese,
Korean, Polish, Indonesian and Thai by fiscal 2015 so that the
content could be understood by employees in each country in their
native language. Moreover, after confirming the importance of
compliance, all officers and employees submitted a written oath of
compliance adherence.
We continue to hold Global Legal and Compliance Meetings
to report and discuss compliance matters. Compliance managers
from regional headquarters gather at the head office to report and
discuss their ongoing initiatives, share information about laws and
regulations that require special attention in various countries and
regions, and look ahead to implementing measures. The
Compliance Enhancement Office continuously conducts internal
audits of the state of compliance with the Antimonopoly Act of
Japan and other competition laws by visiting business sites while
coordinating with the Internal Audit Department.
Furthermore, in 2016, we newly designated July 26, the date
when NSK was investigated by the Japan Fair Trade Commission
in 2011, as “NSK Corporate Philosophy Day” in order to never
forget the cartel incident that led to the inspection by the Fair
Trade Commission and to prevent a reoccurrence. NSK uses this
day as an opportunity to review and reconfirm our mission
statement with a strong commitment to never cause any
▶NSK Group Compliance System
misdeeds. On this day, via a live broadcast to sites in Japan and
several other countries, the President gave a speech and invited
outside lecturers to speak. Overseas sites are also respectively
making efforts to comply.
NSK will continue to be united in our commitment to the
enhancement of compliance by implementing various measures.
Key Policies Implemented for Strengthening Compliance
Compliance Committee Meetings
Compliance Committee Meetings were held 21 times between
the committee’s establishment in March 2012 and February
2017. NSK continues to hold the meeting four times a year.
Global Legal and Compliance Meetings
In May 2016 and January 2017, Global Legal and Compliance Meetings were
held with personnel in charge of compliance from regional headquarters in
attendance. NSK continues to hold the meeting twice a year.
Compliance Conferences
Compliance Conferences were held in July and December 2016, with
personnel in charge of compliance attending from each division and Group
Company in Japan. NSK continues to hold the meeting twice a year.
Compliance Education
NSK conducted the following compliance education and
training for officers and employees of the NSK Group.
1. Antimonopoly Act training
Number of training sessions: 100 for the year ended March
31, 2017 (70 in Japan, 30 outside Japan)
2. Compliance training (at plants, engineering sections and
Topics: Compliance, subcontractor laws, data falsification prevention, etc.
Group companies)
3. E-learning
Topics: Contracts, Antimonopoly Act of Japan, compliance, etc.
Activities to Raise Awareness Toward Compliance
1. Issued the 2015 edition of the NSK Compliance Guidebook
2. Compliance slogan contest, creation of compliance posters
Of the 7,084 submissions received, two slogans were
selected as winners and three slogans were selected as
runners-up.
Posters using the two winning slogans were created and put
on display at all business sites.
3. Compliance newsletter
Since its inaugural edition in November 2012, a total of 43
editions have been published.
Audit Committee
President and Chief Executive Officer
Compliance Committee
Committee Chair: President and CEO
Committee Members: 13 executive officers
Direction Coordination
Audit
CSR Division Headquarters
Internal
Audit Department
International Trade
Management Department
Legal Department
Compliance Enhancement Office
General Affairs
Public Relations
Department
Department
Cooperation
Compliance representatives are selected for each division, Group company and regional headquarters
Compliance Conference
Japan
NSK
Administrative
Divisions
Sales
Divisions
Production
Divisions
Technology
Divisions
NSK Group Companies
Overseas
Global Legal and Compliance Meeting
Regional Headquarters
The
Americas
Europe China
ASEAN India
South
Korea
All NSK Group Employees
54
NSK REPORT 2017
NSK REPORT 2017
55
The Underlying Strength of Corporate Value
CSR / ESG Management
Corporate Governance
Takeover Defense
NSK introduced response measures to Large-scale Purchases of NSK shares (“Takeover Defenses”) at the
annual general meeting of shareholders held in June 2008, and subsequently renewed these Takeover Defenses
with the approval of shareholders at the annual general meetings of shareholders held in June 2011, June 2014,
and June 2017. At the annual general meeting of shareholders held in June 2017, the approval rate for the
Takeover Defenses was 71.03% (compared with 68.4% at the June 2014 general meeting of shareholders).
NSK is a stock company, the shares of which are traded on capital markets, and the free trading of its stock by all shareholders and investors is
permitted. The Company believes that, in the case of a large-scale purchase of NSK shares, the decision whether to accept such a purchase
should ultimately be left to the shareholders.
However, taking into account such factors as social and economic changes and recent capital market conditions, there is a possibility that
a sudden and unsolicited large-scale purchase of the Company’s shares could occur without necessary and sufficient information being
disclosed, and without an opportunity to consider the proposal being given to the shareholders and investors of the target company, or without
the target company’s board of directors being provided with information and time to express its opinion and prepare an alternative proposal.
Such large-scale purchases of shares could damage NSK’s corporate value and the common interests of its shareholders, such as cases in
which the purchaser does not intend to manage the Company reasonably or in good faith.
Therefore, NSK decided to introduce and subsequently renew the Takeover Defenses for the purpose of (i) allowing NSK’s shareholders,
who will make the final decision, to sufficiently understand the specifics of such a proposal by any person attempting a large-scale purchase of
shares and to make an appropriate decision, and (ii) securing and increasing NSK’s corporate value or the common interests of the Company’s
shareholders.
Details of the Company’s Takeover Defenses are published on our website. Please refer to “Continuation of the Response Measures to
Large-scale Purchases of the Company Shares (Takeover Defenses)” as of May 23, 2017.
http://www.nsk.com/company/governance/index.html#tab4
Major Changes Made in June 2017
Large-scale Share Purchaser.
(1) It was decided to limit the period during which the Board of Directors can request the provision of information from the
The period is limited to 60 days from the date a list is provided containing the information requested from the Large-scale Share Purchaser
(2) It was specified that the Board of Directors’ Evaluation Period can be extended only once.
(3) It was decided to establish the Independent Committee as an organization that is independent from the Board of Directors.
The Independent Committee members shall be appointed from independent outside directors and other outside
persons who shall be recognized as independent, etc. As of this report publication date, the members of the
Independent Committee consist of four independent directors and one lawyer.
The purpose of NSK’s Takeover Defenses is to ensure there is sufficient information and time for shareholders to examine
this information before they make a final decision on a proposal by any person attempting a large-scale purchase of shares.
▶Flow Chart of the Procedures Related to the Plan
Emergence of a Large-scale Share Purchaser (20% or greater of the share certificates)
In case of compliance with the Large-scale Share Purchase Rules
In case of non-compliance with the Large-scale Share Purchase Rules
Large-scale Share Purchaser ➡ President & CEO:
Submit “Statement of Intention”
Within 10 business days
Board of Directors ➡ Large-scale Share Purchaser:
Send the List of Necessary Information
Within 60 days
Large-scale Share Purchaser ➡ President & CEO:
Provide the Necessary Information
The Board of Directors Evaluation
● Evaluate and examine the proposal of Large-scale Share Purchase, negotiate with
the Large-scale Share Purchaser, form its opinion on the Large-scale Share
Purchase and/or elaborate alternative proposals.
● Period: up to 60 days (purchase of all the Company’s shares via a takeover bid in
JPY) or up to 90 days (any other Large-scale Share Purchase) [Note 1]
Within 60 days
Shareholders’ Meeting
Voted down
Board of Directors
Consult regarding whether to trigger the countermeasures
Consultation
Decide whether to trigger the countermeasures
(allotment of the Share Options without contribution)
Recommendation
Respect for the Independent Committee’s recommendation
to the greatest extent possible [Note 2]
e
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For triggering the countermeasures (allotment of the Share Options without contribution)
Passed
Passed (unanimous)
Voted
down
Don’t trigger the countermeasures (start of the Large-scale Share Purchase)
Trigger the countermeasures (allotment of the Share Options without contribution)
[Note 1] Provided, however, that the period may, after consulting with the Independent Committee and by respecting the Independent Committee’s
recommendation to the greatest extent possible, be extended up to an additional 30 days by unanimous resolution of the board of directors including
the outside directors (provided that the extension may be made only once.).
[Note 2] The board of directors may trigger the countermeasures in the following cases, provided, however, that the determination to trigger the
countermeasures shall be made by unanimous resolution of the board of directors including the outside directors, after consulting with the
Independent Committee and by respecting the Independent Committee’s recommendation to the greatest extent possible:
① when the Large-scale Share Purchaser does not comply with the Large-scale Share Purchase Rules;
② when the Large-scale Share Purchase falls under certain categories and such Large-scale Share Purchase is reasonably considered to materially
harm the Company’s corporate value and shareholders’ common interests.
Except for the cases of [Note 1] and [Note 2], the resolution of the board of directors shall be made by a majority of the directors who are present at the meeting.
Material CSR Issues
7
Compliance
Basic Philosophy
The foundation of compliance at NSK is the NSK Code of
Corporate Ethics, which outlines universal principles that must
be followed by all officers and employees.
NSK aims to remain a company that is trusted by
international society and local communities by adhering to the
laws and regulations of each country in its corporate activities
around the world, and by taking actions based on high ethical
standards as a corporate citizen.
NSK’s Efforts to Enhance Compliance
NSK makes every effort to advance business activities based on
CSR and stringent compliance with laws and regulations on a
Companywide basis. Our main efforts include the continuous
provision of mandatory compliance training and education for all
officers and employees. In addition, we had issued the NSK
Compliance Guidebook, which contains detailed explanations of
the NSK Code of Corporate Ethics, in Japanese, English, Chinese,
Korean, Polish, Indonesian and Thai by fiscal 2015 so that the
content could be understood by employees in each country in their
native language. Moreover, after confirming the importance of
compliance, all officers and employees submitted a written oath of
compliance adherence.
We continue to hold Global Legal and Compliance Meetings
to report and discuss compliance matters. Compliance managers
from regional headquarters gather at the head office to report and
discuss their ongoing initiatives, share information about laws and
regulations that require special attention in various countries and
regions, and look ahead to implementing measures. The
Compliance Enhancement Office continuously conducts internal
audits of the state of compliance with the Antimonopoly Act of
Japan and other competition laws by visiting business sites while
coordinating with the Internal Audit Department.
Furthermore, in 2016, we newly designated July 26, the date
when NSK was investigated by the Japan Fair Trade Commission
in 2011, as “NSK Corporate Philosophy Day” in order to never
forget the cartel incident that led to the inspection by the Fair
Trade Commission and to prevent a reoccurrence. NSK uses this
day as an opportunity to review and reconfirm our mission
statement with a strong commitment to never cause any
▶NSK Group Compliance System
misdeeds. On this day, via a live broadcast to sites in Japan and
several other countries, the President gave a speech and invited
outside lecturers to speak. Overseas sites are also respectively
making efforts to comply.
NSK will continue to be united in our commitment to the
enhancement of compliance by implementing various measures.
Key Policies Implemented for Strengthening Compliance
Compliance Committee Meetings
Compliance Committee Meetings were held 21 times between
the committee’s establishment in March 2012 and February
2017. NSK continues to hold the meeting four times a year.
Global Legal and Compliance Meetings
In May 2016 and January 2017, Global Legal and Compliance Meetings were
held with personnel in charge of compliance from regional headquarters in
attendance. NSK continues to hold the meeting twice a year.
Compliance Conferences
Compliance Conferences were held in July and December 2016, with
personnel in charge of compliance attending from each division and Group
Company in Japan. NSK continues to hold the meeting twice a year.
Compliance Education
NSK conducted the following compliance education and
training for officers and employees of the NSK Group.
1. Antimonopoly Act training
Number of training sessions: 100 for the year ended March
31, 2017 (70 in Japan, 30 outside Japan)
2. Compliance training (at plants, engineering sections and
Group companies)
Topics: Compliance, subcontractor laws, data falsification prevention, etc.
3. E-learning
Topics: Contracts, Antimonopoly Act of Japan, compliance, etc.
Activities to Raise Awareness Toward Compliance
1. Issued the 2015 edition of the NSK Compliance Guidebook
2. Compliance slogan contest, creation of compliance posters
Of the 7,084 submissions received, two slogans were
selected as winners and three slogans were selected as
runners-up.
Posters using the two winning slogans were created and put
on display at all business sites.
3. Compliance newsletter
Since its inaugural edition in November 2012, a total of 43
editions have been published.
Audit Committee
President and Chief Executive Officer
Compliance Committee
Committee Chair: President and CEO
Committee Members: 13 executive officers
Direction Coordination
Audit
CSR Division Headquarters
Internal
Audit Department
International Trade
Management Department
Legal Department
Compliance Enhancement Office
General Affairs
Department
Public Relations
Department
Cooperation
Compliance representatives are selected for each division, Group company and regional headquarters
Japan
Compliance Conference
NSK
Sales
Divisions
Production
Divisions
NSK Group Companies
Administrative
Divisions
Technology
Divisions
Overseas
Global Legal and Compliance Meeting
Regional Headquarters
The
Americas
Europe China
ASEAN India
South
Korea
All NSK Group Employees
54
NSK REPORT 2017
NSK REPORT 2017
55
The Underlying Strength of Corporate Value
CSR / ESG Management
Dialogue with Shareholders and Investors
Key Questions and Answers at Recent Meetings
1
Basic Philosophy and Structure
In addition to disclosing management information in a fair
and rapid manner, NSK is actively engaged in dialogue with
shareholders and investors. In line with our aim to achieve
sustainable mid- to long-term growth and the stable return
of profits, we will continue to be a company that meets the
expectations of our stakeholders, including investors and
shareholders.
NSK positions IR activities as an important subject for
management and organizes its IR office as a dedicated
division under the direct control of the CEO and supervised
by an executive officer responsible for IR. In cooperation with
relevant divisions, the IR office discloses information on
business, financial and non-financial (including ESG) matters
in an easily understood, fair and appropriate manner.
2
Ordinary General Meeting of Shareholders
We recognize the Ordinary General Meeting of Shareholders as a
place to engage in active dialogue with shareholders, particularly
individual investors, and accordingly set the date to avoid days
crowded with other companies’ meetings. We also work to
provide an accommodating environment, including by promptly
disclosing and sending convocation notices and reports.
As of the end of March 2017, the shareholding ratio of
foreign investors stood at 26%. In addition to the posting of the
convocation notice in English on our website, we have since 2008
participated a platform for the electronic exercise of voting rights.
3
Dialogue with Investors
▶The 156th Ordinary General Meeting of Shareholders (June 23, 2017)
Number of shareholders
present:
283
Ratio of shareholder
voting rights exercised:
85.5％
Dialogue with institutional investors
Dialogue with individual investors
NSK holds financial conferences for analysts and institutional
investors in which the mid-term management plans and earnings
results are presented by the president. Moreover, the Company
holds a variety of IR events including individual interviews by
analysts and institutional investors and small meetings, while also
visiting investors outside Japan, participating in conferences
sponsored by securities firms and convening business briefings.
In addition to holding
briefings for individual
investors several times each
year, NSK actively responds
to questions and discloses
information on our website.
Total number of dialogue opportunities
in fiscal 2016:
527 companies
Total number of individual investors
participating in seven briefings held
in fiscal 2016:
529
The Fair Disclosure Rule will be implemented in Japan from 2018, with companies ensuring through the equal disclosure
of information that market participants see no disparity in information received. In addition to promoting the fair
distribution of information and paying close attention to dialogues with shareholders and investors, NSK is working to
disseminate information to the widest possible audience by posting it on our Web site.
4
Feedback to Management
We have created a system in which opinions and
comments obtained through IR activity and shareholders’
meetings are communicated to the Board of Directors,
senior executives and the relevant internal departments.
▶Main information reported at the Board of Directors meetings
● Summary of the Ordinary General Meeting of Shareholders
(analysis of voting rights executed, dialogue with institutional
investors)
● Report on visits to investors overseas (information sharing,
including in regard to the opinions and interests of investors)
1.
The state of competition and
the Company’s position in the industry
NSK maintains the leading market share for bearings in Japan
and the third largest market share in the world. Among other
leading products, the Company has the largest global market
share for ball screws and the third largest global market share
for electric power steering (EPS). Despite increased
competition in each product, NSK is ensuring its competitive
advantages through its ability to offer solutions to a wide range
of close customers, a global operating base and its
technological strengths based on four core technologies.
2.
The Company’s view on
overseas plant conditions and development
NSK currently has 64 production plants around the world:21 in
Japan, nine in the Americas, nine in Europe, 12 in China and 13 in
Other Asia, giving a total of 43 plants outside Japan. In the
Automotive Business, the Company’s basic policy is to respond to
the local procurement needs of customers through local
production and local supply. Under this policy, NSK has been
working on local plant development, while taking into consideration
an appropriate volume balance. In the Industrial Machinery
Business, which has multi-product, small-lot businesses, we are
focused on prioritizing efficiency through bulk production, with
optimized supply realized amid the use of some export products.
3.
The Company’s view on M&A
One of the most important management issues concerns the
option of M&A when such an action could bolster the Company’s
technological edge and expand its business. We nevertheless
believe it is important to maximize any potential effects of M&A
by carefully conducting two PMIs: the Pre-Merger Investigation
and the Post-Merger Integration (integration process of
management, operations and mind-set). M&A activity in the past
has included the U.K. bearing manufacturer UPI in 1990, the
Polish state-owned company FLT Iskra in 1998 and making
Amatsuji Steel Ball Mfg. a wholly owned subsidiary in 2006.
4.
Growth strategy for the
automotive powertrain business
Powertrain equipment consists of components that convey
power from the original energy source to drive wheels. Although
there are several types of transmissions, the Company’s Fifth
Mid-Term Management Plan targets an expansion in automatic
transmissions (Step AT) as a key driver for growth in the
automotive segment. Against the backdrop of a volume increase
of Step AT in emerging economies and progress in the shift to
multistep AT, which allows improved fuel efficiency and a
smoother riding experience, AT-related products and needle
bearing sales at NSK are expanding. Another reason for the
sales expansion at NSK is that the customer using these NSK
products is expanding its new business as a unit manufacturer.
5.
The effect of the shift to electric vehicles (EVs)
Although the number of bearings used is expected to decline due
to the ongoing shift toward electric vehicles, we believe there are
new business opportunities where advanced technological
component units that derive their power from the engine, as well as
efficiency-oriented bearings to enhance the conservation of energy.
Moreover, we are focused on expanding our business in new
products and areas by making good use of NSK’s technologies,
including ball screws for use in electric brake systems, which are
increasingly being used in new vehicles; components for
motor-driven wheel hub motors; and EV drive units, which show
promise as a deceleration mechanism necessary in the use of a
compact high-speed motor as a power source.
6.
The future of electric power steering (EPS) and the
Company’s growth strategy for the steering business
Electric power steering (EPS) has been widely installed due to the
ease of assembly and fuel-saving concerns. Today, computerized
steering control is becoming increasingly important as Advanced
Driver Assistance Systems (ADAS) and autonomous driving
continue to evolve, and accordingly EPS is now considered
essential. Moreover, EPS demand appears likely to expand further
due to an increase in automobile demand in emerging markets
and a pickup in utilization rates in larger vehicles. NSK is
particularly strong in column-type EPS, and while we look for an
ongoing expansion in column-type EPS for smaller vehicles, we
also look for growth through an expanded lineup of lower-assist
EPS such as dual pinion-type EPS and rack-type EPS.
7.
Strategies and priorities for the
Industrial Machinery Business
Operational excellence is one of the two main pillars in our Fifth
Mid-Term Management Plan. As one of the measures of this
pillar, NSK is bolstering its structure by enhancing production
capacity at the Shenyang plant in China and improving
productivity by introducing new manufacturing methods and
building a new facility at the Kirihara, Fujisawa plant. Moreover,
the Company is focused on ensuring sustainable growth by
expanding its presence in focus sectors. In addition to
infrastructure-related fields such as railway and wind power
generation, where demand appears likely to expand over the
medium to long term, we are focused on expansion in capital
goods such as machine tools in which NSK shows particular
strength, as well as the medical and robotics fields, which are
expected to show sustained growth, and aftermarket sales, where
we are strengthening our efforts overseas.
8.
The state of competition and differentiation in the Industrial
Machinery Business outside Japan, particularly in China
It has been said that there are more than 1,000 bearing
manufacturers in China and that the leaders are improving their
technical capabilities and quality in the standard products. NSK is
focused on avoiding price competition in low-end areas of demand
and in standard products where differentiation is somewhat
difficult. Rather, our basic strategy is to focus on growth in fields
where we are able to utilize advanced product and production
technologies based on our four core technologies. We will secure
competitive advantage through the stable and continuous supply
of high-quality products in these fields. In addition to promoting
the local procurement of parts and materials meeting NSK quality
standards, we are focused on improving competitiveness by
strengthening local production capacity, largely by making good
capabilities are required. For example, we expect electrification of
use of the know-how we have accumulated over the years.
56
NSK REPORT 2017
NSK REPORT 2017
57
The Underlying Strength of Corporate Value
CSR / ESG Management
1
Basic Philosophy and Structure
In addition to disclosing management information in a fair
NSK positions IR activities as an important subject for
and rapid manner, NSK is actively engaged in dialogue with
management and organizes its IR office as a dedicated
shareholders and investors. In line with our aim to achieve
division under the direct control of the CEO and supervised
sustainable mid- to long-term growth and the stable return
by an executive officer responsible for IR. In cooperation with
of profits, we will continue to be a company that meets the
relevant divisions, the IR office discloses information on
expectations of our stakeholders, including investors and
business, financial and non-financial (including ESG) matters
shareholders.
in an easily understood, fair and appropriate manner.
2
Ordinary General Meeting of Shareholders
We recognize the Ordinary General Meeting of Shareholders as a
place to engage in active dialogue with shareholders, particularly
individual investors, and accordingly set the date to avoid days
crowded with other companies’ meetings. We also work to
provide an accommodating environment, including by promptly
disclosing and sending convocation notices and reports.
As of the end of March 2017, the shareholding ratio of
foreign investors stood at 26%. In addition to the posting of the
convocation notice in English on our website, we have since 2008
participated a platform for the electronic exercise of voting rights.
3
Dialogue with Investors
▶The 156th Ordinary General Meeting of Shareholders (June 23, 2017)
Number of shareholders
present:
283
Ratio of shareholder
voting rights exercised:
85.5％
Dialogue with institutional investors
Dialogue with individual investors
NSK holds financial conferences for analysts and institutional
investors in which the mid-term management plans and earnings
results are presented by the president. Moreover, the Company
holds a variety of IR events including individual interviews by
analysts and institutional investors and small meetings, while also
visiting investors outside Japan, participating in conferences
sponsored by securities firms and convening business briefings.
In addition to holding
briefings for individual
investors several times each
year, NSK actively responds
to questions and discloses
information on our website.
Total number of dialogue opportunities
in fiscal 2016:
527 companies
Total number of individual investors
participating in seven briefings held
in fiscal 2016:
529
The Fair Disclosure Rule will be implemented in Japan from 2018, with companies ensuring through the equal disclosure
of information that market participants see no disparity in information received. In addition to promoting the fair
distribution of information and paying close attention to dialogues with shareholders and investors, NSK is working to
disseminate information to the widest possible audience by posting it on our Web site.
4
Feedback to Management
We have created a system in which opinions and
comments obtained through IR activity and shareholders’
meetings are communicated to the Board of Directors,
senior executives and the relevant internal departments.
▶Main information reported at the Board of Directors meetings
● Summary of the Ordinary General Meeting of Shareholders
(analysis of voting rights executed, dialogue with institutional
investors)
● Report on visits to investors overseas (information sharing,
including in regard to the opinions and interests of investors)
Dialogue with Shareholders and Investors
Key Questions and Answers at Recent Meetings
1.
The state of competition and
the Company’s position in the industry
NSK maintains the leading market share for bearings in Japan
and the third largest market share in the world. Among other
leading products, the Company has the largest global market
share for ball screws and the third largest global market share
for electric power steering (EPS). Despite increased
competition in each product, NSK is ensuring its competitive
advantages through its ability to offer solutions to a wide range
of close customers, a global operating base and its
technological strengths based on four core technologies.
2.
The Company’s view on
overseas plant conditions and development
NSK currently has 64 production plants around the world:21 in
Japan, nine in the Americas, nine in Europe, 12 in China and 13 in
Other Asia, giving a total of 43 plants outside Japan. In the
Automotive Business, the Company’s basic policy is to respond to
the local procurement needs of customers through local
production and local supply. Under this policy, NSK has been
working on local plant development, while taking into consideration
an appropriate volume balance. In the Industrial Machinery
Business, which has multi-product, small-lot businesses, we are
focused on prioritizing efficiency through bulk production, with
optimized supply realized amid the use of some export products.
3.
The Company’s view on M&A
One of the most important management issues concerns the
option of M&A when such an action could bolster the Company’s
technological edge and expand its business. We nevertheless
believe it is important to maximize any potential effects of M&A
by carefully conducting two PMIs: the Pre-Merger Investigation
and the Post-Merger Integration (integration process of
management, operations and mind-set). M&A activity in the past
has included the U.K. bearing manufacturer UPI in 1990, the
Polish state-owned company FLT Iskra in 1998 and making
Amatsuji Steel Ball Mfg. a wholly owned subsidiary in 2006.
4.
Growth strategy for the
automotive powertrain business
Powertrain equipment consists of components that convey
power from the original energy source to drive wheels. Although
there are several types of transmissions, the Company’s Fifth
Mid-Term Management Plan targets an expansion in automatic
transmissions (Step AT) as a key driver for growth in the
automotive segment. Against the backdrop of a volume increase
of Step AT in emerging economies and progress in the shift to
multistep AT, which allows improved fuel efficiency and a
smoother riding experience, AT-related products and needle
bearing sales at NSK are expanding. Another reason for the
sales expansion at NSK is that the customer using these NSK
products is expanding its new business as a unit manufacturer.
5.
The effect of the shift to electric vehicles (EVs)
Although the number of bearings used is expected to decline due
to the ongoing shift toward electric vehicles, we believe there are
new business opportunities where advanced technological
capabilities are required. For example, we expect electrification of
component units that derive their power from the engine, as well as
efficiency-oriented bearings to enhance the conservation of energy.
Moreover, we are focused on expanding our business in new
products and areas by making good use of NSK’s technologies,
including ball screws for use in electric brake systems, which are
increasingly being used in new vehicles; components for
motor-driven wheel hub motors; and EV drive units, which show
promise as a deceleration mechanism necessary in the use of a
compact high-speed motor as a power source.
6.
The future of electric power steering (EPS) and the
Company’s growth strategy for the steering business
Electric power steering (EPS) has been widely installed due to the
ease of assembly and fuel-saving concerns. Today, computerized
steering control is becoming increasingly important as Advanced
Driver Assistance Systems (ADAS) and autonomous driving
continue to evolve, and accordingly EPS is now considered
essential. Moreover, EPS demand appears likely to expand further
due to an increase in automobile demand in emerging markets
and a pickup in utilization rates in larger vehicles. NSK is
particularly strong in column-type EPS, and while we look for an
ongoing expansion in column-type EPS for smaller vehicles, we
also look for growth through an expanded lineup of lower-assist
EPS such as dual pinion-type EPS and rack-type EPS.
7.
Strategies and priorities for the
Industrial Machinery Business
Operational excellence is one of the two main pillars in our Fifth
Mid-Term Management Plan. As one of the measures of this
pillar, NSK is bolstering its structure by enhancing production
capacity at the Shenyang plant in China and improving
productivity by introducing new manufacturing methods and
building a new facility at the Kirihara, Fujisawa plant. Moreover,
the Company is focused on ensuring sustainable growth by
expanding its presence in focus sectors. In addition to
infrastructure-related fields such as railway and wind power
generation, where demand appears likely to expand over the
medium to long term, we are focused on expansion in capital
goods such as machine tools in which NSK shows particular
strength, as well as the medical and robotics fields, which are
expected to show sustained growth, and aftermarket sales, where
we are strengthening our efforts overseas.
8.
The state of competition and differentiation in the Industrial
Machinery Business outside Japan, particularly in China
It has been said that there are more than 1,000 bearing
manufacturers in China and that the leaders are improving their
technical capabilities and quality in the standard products. NSK is
focused on avoiding price competition in low-end areas of demand
and in standard products where differentiation is somewhat
difficult. Rather, our basic strategy is to focus on growth in fields
where we are able to utilize advanced product and production
technologies based on our four core technologies. We will secure
competitive advantage through the stable and continuous supply
of high-quality products in these fields. In addition to promoting
the local procurement of parts and materials meeting NSK quality
standards, we are focused on improving competitiveness by
strengthening local production capacity, largely by making good
use of the know-how we have accumulated over the years.
56
NSK REPORT 2017
NSK REPORT 2017
57
The Underlying Strength of Corporate Value
Management
1 Toshihiro Uchiyama
N
2 Saimon Nogami
C
3 Shigeyuki Suzuki
4 Yasuhiro Kamio
Director,
President and Chief Executive Officer
〔Number of Shares Owned: 80,700〕
Director, Representative Executive Vice President,
CFO,
Responsible for Administrative Divisions
Head of Corporate Strategy Division
Headquarters
〔Number of Shares Owned: 36,000〕
Director, Representative Executive Vice President,
Head of Automotive Business Division
Headquarters,
Head of Automotive Powertrain Division
Headquarters-Automotive Business Division
Headquarters
〔Number of Shares Owned: 52,000〕
Director, Representative Executive Vice President,
Head of Industrial Machinery Business Division
Headquarters,
Head of Japan Sales and Marketing Division
Headquarters-Industrial Machinery Business
Division Headquarters
〔Number of Shares Owned: 75,800〕
5 Hirotoshi Aramaki
Director, Executive Vice President,
Responsible for Technology Divisions,
Head of Technology Development Division
Headquarters
〔Number of Shares Owned: 50,300〕
6 Minoru Arai
7 Akitoshi Ichii
Director, Senior Vice President,
Responsible for Manufacturing Divisions,
Responsible for Quality Assurance Division,
Head of Manufacturing Strategy Division
Headquarters,
Head of Procurement Division Headquarters
〔Number of Shares Owned: 25,200〕
Director, Senior Vice President,
Head of Corporate Planning Division
Headquarters,
Responsible for Asia
〔Number of Shares Owned: 53,461〕
8 Toshihiko Enomoto
A
Director
〔Number of Shares Owned: 14,116〕
9 Kazuaki Kama
N
Outside Director,
Independent Director,
Executive Corporate Advisor of IHI Corporation,
Outside Director of Kyokuto Boeki Kaisha, LTD.,
Outside Director of Konica Minolta, Inc.,
Outside Director of Sumitomo Life Insurance
Company
〔Number of Shares Owned: 2,000〕
58
NSK REPORT 2017
A
N
10 Ichiro Tai
Outside Director,
Independent Director
〔Number of Shares Owned: 3,700〕
11 Yasunobu Furukawa
監A
C
12 Teruhiko Ikeda
C
Outside Director,
Independent Director,
Certified Public Accountant,
Outside Director of Keisei Electric Railway
Co., Ltd.
〔Number of Shares Owned: 1,600〕
Outside Director,
Independent Director,
Advisor of Mizuho Trust & Banking Co., Ltd.,
Outside Director of Sapporo Holdings Limited
〔Number of Shares Owned: -〕
Executive Officers and Group Officers
Toshihiro Uchiyama
Vice Presidents
Jüergen Ackermann
President and
Chief Executive Officer
Representative
Executive Vice
Presidents
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Executive Vice
Presidents
Hirotoshi Aramaki
Masatada Fumoto
Senior Vice
Presidents
Yasutsugu Hada
Nobuo Goto
Koji Inoue
Yukio Ikemura
Hiroshi Suzuki
Minoru Arai
Hiroya Miyazaki
Adrian Browne
Shin Ikeda
Katsumi Kobayashi
Masami Shinomoto
Hiromasa Orito
Kazunori Iritani
Akitoshi Ichii
Masaru Takayama
Seiji Ijuin
Nobuaki Mitamura
Takashi Yamanouchi
Kazuya Fukuda
Kenichi Yamana
Steven Beckman
Susumu Ishikawa
Tatsuya Atarashi
Tomoyuki Yoshikiyo
Guoping Yu
Hideki Ochiai
Kunihiko Akashi
Hiroya Achiha
Yoshinori Sugimoto
Sakae Kuwashiro
NSK REPORT 2017
59
Group Officers
Seong-Il Jo
： N
Nominating
Committee
： C
Compensation
Committee
A
： Audit Committee
： Chairperson
Notes: 1. For the career summary of each director, the
independence of the independent directors and the
reasons behind their appointments, please see the Notice
of the 156th Ordinary General Meeting of Shareholders of
NSK and Independent Directors/Auditors Notifications
published on the following websites of the Tokyo Stock
Exchange.
[Notice of the Ordinary General Meeting of Shareholders]
http://www2.tse.or.jp/disc/64710/140120170525484053.pdf
[Independent Directors/Auditors Notifications] (Japanese only)
http://www2.tse.or.jp/disc/64710/140120160530405543.pdf
2. Number of the Company’s shares owned as of March 31,
2017
The Underlying Strength of Corporate Value
Management
1 Toshihiro Uchiyama
N
2 Saimon Nogami
C
3 Shigeyuki Suzuki
4 Yasuhiro Kamio
Director,
Director, Representative Executive Vice President,
Director, Representative Executive Vice President,
President and Chief Executive Officer
〔Number of Shares Owned: 80,700〕
CFO,
Responsible for Administrative Divisions
Head of Corporate Strategy Division
Headquarters
〔Number of Shares Owned: 36,000〕
Headquarters
Head of Automotive Business Division
Headquarters,
Head of Automotive Powertrain Division
Headquarters-Automotive Business Division
Director, Representative Executive Vice President,
Head of Industrial Machinery Business Division
Headquarters,
Head of Japan Sales and Marketing Division
Headquarters-Industrial Machinery Business
Division Headquarters
〔Number of Shares Owned: 52,000〕
〔Number of Shares Owned: 75,800〕
5 Hirotoshi Aramaki
6 Minoru Arai
7 Akitoshi Ichii
8 Toshihiko Enomoto
A
Director, Executive Vice President,
Responsible for Technology Divisions,
Head of Technology Development Division
Headquarters
Director, Senior Vice President,
Responsible for Manufacturing Divisions,
Responsible for Quality Assurance Division,
Head of Manufacturing Strategy Division
Headquarters,
Responsible for Asia
〔Number of Shares Owned: 50,300〕
Headquarters,
〔Number of Shares Owned: 53,461〕
Director, Senior Vice President,
Head of Corporate Planning Division
Director
〔Number of Shares Owned: 14,116〕
Head of Procurement Division Headquarters
〔Number of Shares Owned: 25,200〕
9 Kazuaki Kama
N
10 Ichiro Tai
N
A
11 Yasunobu Furukawa
監A
C
12 Teruhiko Ikeda
C
Outside Director,
Independent Director
Outside Director,
Independent Director,
〔Number of Shares Owned: 3,700〕
Certified Public Accountant,
Outside Director of Keisei Electric Railway
Co., Ltd.
〔Number of Shares Owned: 1,600〕
Outside Director,
Independent Director,
Advisor of Mizuho Trust & Banking Co., Ltd.,
Outside Director of Sapporo Holdings Limited
〔Number of Shares Owned: -〕
Outside Director,
Independent Director,
Executive Corporate Advisor of IHI Corporation,
Outside Director of Kyokuto Boeki Kaisha, LTD.,
Outside Director of Konica Minolta, Inc.,
Outside Director of Sumitomo Life Insurance
Company
〔Number of Shares Owned: 2,000〕
58
NSK REPORT 2017
Executive Officers and Group Officers
President and
Chief Executive Officer
Representative
Executive Vice
Presidents
Toshihiro Uchiyama
Vice Presidents
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Executive Vice
Presidents
Hirotoshi Aramaki
Masatada Fumoto
Senior Vice
Presidents
： N
Nominating
Committee
： C
Compensation
Committee
A
： Audit Committee
： Chairperson
Notes: 1. For the career summary of each director, the
independence of the independent directors and the
reasons behind their appointments, please see the Notice
of the 156th Ordinary General Meeting of Shareholders of
NSK and Independent Directors/Auditors Notifications
published on the following websites of the Tokyo Stock
Exchange.
[Notice of the Ordinary General Meeting of Shareholders]
http://www2.tse.or.jp/disc/64710/140120170525484053.pdf
[Independent Directors/Auditors Notifications] (Japanese only)
http://www2.tse.or.jp/disc/64710/140120160530405543.pdf
2. Number of the Company’s shares owned as of March 31,
2017
Yasutsugu Hada
Nobuo Goto
Koji Inoue
Yukio Ikemura
Hiroshi Suzuki
Minoru Arai
Hiroya Miyazaki
Adrian Browne
Shin Ikeda
Katsumi Kobayashi
Masami Shinomoto
Hiromasa Orito
Kazunori Iritani
Akitoshi Ichii
Group Officers
Jüergen Ackermann
Masaru Takayama
Seiji Ijuin
Nobuaki Mitamura
Takashi Yamanouchi
Kazuya Fukuda
Kenichi Yamana
Steven Beckman
Susumu Ishikawa
Tatsuya Atarashi
Tomoyuki Yoshikiyo
Guoping Yu
Hideki Ochiai
Kunihiko Akashi
Hiroya Achiha
Seong-Il Jo
Yoshinori Sugimoto
Sakae Kuwashiro
NSK REPORT 2017
59
Data Section
Consolidated Statements of Financial Position (IFRS)
Consolidated Statements of Income (IFRS)
As of March 31,
Assets
Current assets
Cash and cash equivalents
Trade receivables and other receivables
Inventories
Other financial assets
Income tax receivables
Other current assets
(Millions of Yen)
2016
2017
175,515
182,332
130,564
4,052
2,174
16,613
139,573
200,954
131,810
12,284
3,024
18,637
Total current assets
511,253
506,284
Non-current assets Property, plant and equipment
Intangible assets
Investments accounted for using equity method
Other financial assets
Deferred tax assets
Net defined benefit assets
Other non-current assets
Total non-current assets
Total assets
Liabilities and Equity
Liabilities
Current liabilities Trade payables and other payables
Other financial liabilities
Provisions
Income tax payables
Other current liabilities
Total current liabilities
Financial liabilities
Provisions
Deferred tax liabilities
Net defined benefit liabilities
Other non-current liabilities
Total non-current liabilities
Issued capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity
Non-current
liabilities
Total liabilities
Equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity
60
NSK REPORT 2017
323,116
15,785
22,179
86,163
20,455
49,898
3,522
329,183
17,174
23,186
88,904
21,052
54,969
3,198
521,121
537,670
1,032,374
1,043,955
140,713
99,674
150
4,536
48,172
150,212
111,240
60
4,540
52,548
293,247
318,603
179,654
1,855
35,540
38,125
5,080
157,240
15,327
37,089
24,771
5,911
260,255
240,340
553,503
558,943
67,176
79,603
278,524
(3,949)
33,306
454,661
24,210
67,176
79,676
308,395
(17,937)
24,039
461,350
23,661
478,871
485,011
1,032,374
1,043,955
Selling, general and administrative expenses
Share of profits of investments accounted for using the equity method
Other operating expenses
Year ended March 31,
Sales
Cost of sales
Gross profit
Operating income
Financial income
Financial expenses
Income tax expense
Net income
Income before income taxes
Net income attributable to:
Owners of the parent
Non-controlling interests
Basic earnings per share (yen)
Diluted earnings per share (yen)
(Earnings per share attributable to owners of the parent)
2016
975,319
755,663
(Millions of Yen)
2017
949,170
738,434
219,655
210,736
130,130
4,740
4,731
132,021
5,086
18,458
89,534
65,341
2,388
4,714
87,208
17,904
69,303
65,719
3,584
121.38
121.30
2,576
4,301
63,617
14,619
48,997
45,560
3,437
86.08
86.03
Consolidated Statements of Comprehensive Income (IFRS)
2016
2017
Before tax effect
Tax effect
Amount (net)
Before tax effect
Tax effect
Amount (net)
(Millions of Yen)
69,303
48,997
Year ended March 31,
Net income
Other comprehensive income
Items that will not be reclassified to profit or loss
Net changes in financial assets measured at fair value
through other comprehensive income
Share of other comprehensive income of
investments accounted for using equity method
Remeasurements of net defined benefit liability (asset)
(27,875)
10,173
(17,702)
(2,445)
(1,162)
(3,608)
(17,149)
6,364
(10,785)
9,923
(1,216)
8,707
(576)
156
(420)
213
(81)
131
Total items that will not be reclassified to profit or loss
(45,601)
16,693
(28,907)
7,691
(2,460)
5,231
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations
(27,706)
(27,706)
(8,419)
Share of other comprehensive income of
investments accounted for using equity method
(570)
(570)
(138)
Total items that may be reclassified to profit or loss
(28,276)
(28,276)
(8,558)
－
－
－
Total other comprehensive income
(73,878)
16,693
(57,184)
(866)
(2,460)
(3,327)
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Owners of the parent
Non-controlling interests
12,119
10,198
1,920
－
－
－
(8,419)
(138)
(8,558)
45,670
42,430
3,240
NSK REPORT 2017
61
Data Section
As of March 31,
Assets
Current assets
Cash and cash equivalents
Trade receivables and other receivables
Non-current assets Property, plant and equipment
Intangible assets
Investments accounted for using equity method
Total assets
Liabilities and Equity
Liabilities
Current liabilities Trade payables and other payables
Inventories
Other financial assets
Income tax receivables
Other current assets
Total current assets
Other financial assets
Deferred tax assets
Net defined benefit assets
Other non-current assets
Total non-current assets
Other financial liabilities
Provisions
Income tax payables
Other current liabilities
Total current liabilities
Financial liabilities
Provisions
Deferred tax liabilities
Net defined benefit liabilities
Other non-current liabilities
Total non-current liabilities
Issued capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity
Non-current
liabilities
Total liabilities
Equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity
60
NSK REPORT 2017
(Millions of Yen)
2016
2017
175,515
182,332
130,564
4,052
2,174
16,613
139,573
200,954
131,810
12,284
3,024
18,637
511,253
506,284
323,116
329,183
15,785
22,179
86,163
20,455
49,898
3,522
17,174
23,186
88,904
21,052
54,969
3,198
521,121
537,670
1,032,374
1,043,955
140,713
99,674
150
4,536
48,172
150,212
111,240
60
4,540
52,548
293,247
318,603
179,654
157,240
1,855
35,540
38,125
5,080
15,327
37,089
24,771
5,911
260,255
240,340
553,503
558,943
67,176
79,603
278,524
(3,949)
33,306
454,661
24,210
67,176
79,676
308,395
(17,937)
24,039
461,350
23,661
478,871
485,011
1,032,374
1,043,955
Consolidated Statements of Financial Position (IFRS)
Consolidated Statements of Income (IFRS)
Year ended March 31,
Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Share of profits of investments accounted for using the equity method
Other operating expenses
Operating income
Financial income
Financial expenses
Income before income taxes
Income tax expense
Net income
Net income attributable to:
Owners of the parent
Non-controlling interests
(Earnings per share attributable to owners of the parent)
Basic earnings per share (yen)
Diluted earnings per share (yen)
2016
975,319
755,663
(Millions of Yen)
2017
949,170
738,434
219,655
210,736
130,130
4,740
4,731
132,021
5,086
18,458
89,534
65,341
2,388
4,714
87,208
17,904
69,303
65,719
3,584
121.38
121.30
2,576
4,301
63,617
14,619
48,997
45,560
3,437
86.08
86.03
Consolidated Statements of Comprehensive Income (IFRS)
Year ended March 31,
Net income
Other comprehensive income
2016
2017
Before tax effect
Tax effect
Amount (net)
Before tax effect
Tax effect
Amount (net)
(Millions of Yen)
69,303
48,997
Items that will not be reclassified to profit or loss
Remeasurements of net defined benefit liability (asset)
Net changes in financial assets measured at fair value
through other comprehensive income
Share of other comprehensive income of
investments accounted for using equity method
(27,875)
10,173
(17,702)
(2,445)
(1,162)
(3,608)
(17,149)
6,364
(10,785)
9,923
(1,216)
8,707
(576)
156
(420)
213
(81)
131
Total items that will not be reclassified to profit or loss
(45,601)
16,693
(28,907)
7,691
(2,460)
5,231
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations
Share of other comprehensive income of
investments accounted for using equity method
Total items that may be reclassified to profit or loss
(27,706)
(570)
(28,276)
－
－
－
(27,706)
(8,419)
(570)
(138)
(28,276)
(8,558)
－
－
－
(8,419)
(138)
(8,558)
Total other comprehensive income
(73,878)
16,693
(57,184)
(866)
(2,460)
(3,327)
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Owners of the parent
Non-controlling interests
12,119
10,198
1,920
45,670
42,430
3,240
NSK REPORT 2017
61
Data Section
Consolidated Statements of Changes in Equity (IFRS)
Consolidated Statements of Cash Flows (IFRS)
Year ended March 31, 2016
Opening balance
Net income
Other comprehensive income
Total comprehensive income for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership interest in subsidiaries
Other
Total transactions with owners, etc.
Closing balance
Equity attributable to owners of the parent
Issued capital
Capital surplus
Retained earnings
Treasury shares
67,176
79,191
230,214
(4,083)
(Millions of Yen)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
188
223
－
－
－
412
65,719
－
65,719
－
－
－
(17,877)
－
468
(17,409)
－
－
－
(12)
146
－
－
－
－
134
67,176
79,603
278,524
(3,949)
Equity attributable to owners of the parent
Other components of equity
Exchange differences
on translating foreign
operations
Net changes in financial assets
measured at fair value through
other comprehensive income
Remeasurements of
net defined benefit
liability (asset)
Total
Total
Non-controlling
interests
Total equity
Opening balance
Net income
Other comprehensive income
Total comprehensive income
for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership
interest in subsidiaries
Other
Total transactions with owners, etc.
23,451
－
(26,643)
(26,643)
－
－
－
－
－
－
－
Closing balance
(3,191)
46,356
－
(10,851)
(10,851)
－
－
－
－
－
(211)
(211)
35,292
19,230
－
(18,025)
89,038
－
(55,520)
461,536
65,719
(55,520)
(18,025)
(55,520)
10,198
－
－
－
－
－
－
－
－
－
－
－
－
(211)
(211)
1,204
33,306
(12)
335
223
(17,877)
－
257
(17,074)
454,661
25,265
3,584
(1,664)
1,920
－
－
－
(2,974)
－
－
(2,974)
24,210
486,801
69,303
(57,184)
12,119
(12)
335
223
(20,852)
－
257
(20,049)
478,871
Year ended March 31, 2017
Opening balance
Net income
Other comprehensive income
Total comprehensive income for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership interest in subsidiaries
Other
Total transactions with owners, etc.
Closing balance
Equity attributable to owners of the parent
Issued capital
Capital surplus
Retained earnings
Treasury shares
67,176
79,603
278,524
(3,949)
(Millions of Yen)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
27
383
－
(339)
－
72
45,560
－
45,560
－
－
－
(21,905)
－
6,216
(15,689)
67,176
79,676
308,395
－
－
－
(15,008)
1,021
－
－
－
－
(13,987)
(17,937)
Equity attributable to owners of the parent
Other components of equity
Exchange differences
on translating foreign
operations
Net changes in financial assets
measured at fair value through
other comprehensive income
Remeasurements of
net defined benefit
liability (asset)
Total
Total
Non-controlling
interests
Total equity
Opening balance
Net income
Other comprehensive income
Total comprehensive income
for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership
interest in subsidiaries
Other
Total transactions with owners, etc.
(3,191)
－
(8,340)
(8,340)
－
－
－
－
－
－
－
Closing balance
(11,531)
62
NSK REPORT 2017
35,292
－
8,705
8,705
－
－
－
－
－
(6,136)
(6,136)
37,862
1,204
－
(3,495)
33,306
－
(3,130)
454,661
45,560
(3,130)
24,210
3,437
(196)
478,871
48,997
(3,327)
(3,495)
(3,130)
42,430
3,240
45,670
－
－
－
－
－
－
－
(2,290)
－
－
－
－
－
(6,136)
(6,136)
24,039
(15,008)
1,048
383
(21,905)
(339)
80
(35,741)
461,350
－
－
－
(2,482)
(1,305)
－
(3,788)
23,661
(15,008)
1,048
383
(24,388)
(1,645)
80
(39,530)
485,011
Increase (decrease) in net defined benefit liability and net defined benefit asset
Share of profits of investments accounted for using the equity method
Year ended March 31,
Operating activities
Income before income taxes
Depreciation and amortisation
Interest and dividend income
Interest expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other
Subtotal
Interest and dividend received
Interest paid
Income tax paid
Net cash provided by operating activities
Investing activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchases of other financial assets
Proceeds from sale of other financial assets
Other
Net cash used in investing activities
Financial activities
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of corporate bonds
Payments for redemption of corporate bonds
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
(Millions of Yen)
2016
2017
87,208
43,048
(5,374)
(2,378)
4,728
(4,740)
2,407
519
(5,902)
6,594
63,617
43,354
(20,133)
(2,414)
3,701
(5,086)
(22,007)
(3,756)
14,439
13,446
126,110
85,161
5,126
(4,783)
(17,831)
6,440
(3,746)
(19,919)
108,622
67,936
(45,869)
272
(49)
3,994
(3,560)
(53,297)
2,932
(11,166)
10,785
(3,498)
(45,212)
(54,243)
9,735
(47,793)
－
－
(5)
(17,861)
(2,974)
(9,174)
6,914
(17,963)
20,000
(20,000)
(15,001)
(21,882)
(2,482)
2,003
Net cash used in financial activities
(68,073)
(48,413)
Effect of exchange rate changes on cash and cash equivalents
(4,195)
(1,221)
Net increase (decrease) in cash and cash equivalents
(8,858)
(35,942)
Cash and cash equivalents at beginning of the period
184,374
175,515
Cash and cash equivalents at end of the period
175,515
139,573
NSK REPORT 2017
63
Data Section
Year ended March 31, 2016
Opening balance
Net income
Other comprehensive income
Total comprehensive income for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership interest in subsidiaries
Other
Total transactions with owners, etc.
Closing balance
Opening balance
Net income
Other comprehensive income
Total comprehensive income
for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership
interest in subsidiaries
Other
Total transactions with owners, etc.
23,451
－
(26,643)
(26,643)
－
－
－
－
－
－
－
Year ended March 31, 2017
Opening balance
Net income
Other comprehensive income
Total comprehensive income for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership interest in subsidiaries
Other
Total transactions with owners, etc.
Closing balance
Equity attributable to owners of the parent
Other components of equity
Exchange differences
on translating foreign
operations
Net changes in financial assets
measured at fair value through
other comprehensive income
Remeasurements of
net defined benefit
liability (asset)
Total
Total
Non-controlling
interests
Total equity
19,230
－
(18,025)
89,038
－
(55,520)
461,536
65,719
(55,520)
25,265
3,584
(1,664)
486,801
69,303
(57,184)
(18,025)
(55,520)
10,198
1,920
12,119
Closing balance
(3,191)
1,204
33,306
(17,074)
454,661
(2,974)
24,210
(20,049)
478,871
(Millions of Yen)
Equity attributable to owners of the parent
Issued capital
Capital surplus
Retained earnings
Treasury shares
67,176
79,603
(3,949)
Equity attributable to owners of the parent
Issued capital
Capital surplus
Retained earnings
Treasury shares
67,176
79,191
(4,083)
(Millions of Yen)
－
－
－
－
－
－
－
－
－
－
67,176
－
－
－
－
－
(211)
(211)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
(6,136)
(6,136)
24,039
－
－
－
－
－
－
－
188
223
412
79,603
(12)
335
223
－
257
－
－
－
－
27
383
－
(339)
－
72
454,661
45,560
(3,130)
(15,008)
1,048
383
(21,905)
(339)
80
(35,741)
461,350
230,214
65,719
65,719
－
－
－
－
(17,877)
－
468
(17,409)
278,524
－
－
－
－
－
－
－
－
－
－
278,524
45,560
45,560
(21,905)
6,216
(15,689)
308,395
24,210
3,437
(196)
－
－
－
－
(2,482)
(1,305)
(3,788)
23,661
(12)
146
－
－
－
－
－
－
－
134
(3,949)
(12)
335
223
－
257
－
－
－
－
－
－
－
(15,008)
1,021
(13,987)
(17,937)
478,871
48,997
(3,327)
(15,008)
1,048
383
(24,388)
(1,645)
80
(39,530)
485,011
－
－
－
－
－
－
－
－
－
－
－
－
－
－
46,356
－
(10,851)
(10,851)
－
－
－
－
－
(211)
(211)
35,292
35,292
－
8,705
8,705
－
－
－
－
－
(6,136)
(6,136)
37,862
Equity attributable to owners of the parent
Other components of equity
Exchange differences
on translating foreign
operations
Net changes in financial assets
measured at fair value through
other comprehensive income
Remeasurements of
net defined benefit
liability (asset)
Total
Total
Non-controlling
interests
Total equity
67,176
79,676
1,204
－
(3,495)
33,306
－
(3,130)
Opening balance
Net income
Other comprehensive income
Total comprehensive income
for the period
Purchase of treasury shares
Disposal of treasury shares
Share-based payment transactions
Cash dividends
Changes in the ownership
interest in subsidiaries
Other
Total transactions with owners, etc.
62
NSK REPORT 2017
(3,191)
－
(8,340)
(8,340)
－
－
－
－
－
－
－
Closing balance
(11,531)
(2,290)
Consolidated Statements of Changes in Equity (IFRS)
Consolidated Statements of Cash Flows (IFRS)
Year ended March 31,
Operating activities
Income before income taxes
Depreciation and amortisation
Increase (decrease) in net defined benefit liability and net defined benefit asset
Interest and dividend income
Interest expenses
Share of profits of investments accounted for using the equity method
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other
Subtotal
Interest and dividend received
Interest paid
Income tax paid
(17,877)
(2,974)
(20,852)
Net cash provided by operating activities
Investing activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchases of other financial assets
Proceeds from sale of other financial assets
Other
Net cash used in investing activities
Financial activities
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of corporate bonds
Payments for redemption of corporate bonds
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
(Millions of Yen)
2016
2017
87,208
43,048
(5,374)
(2,378)
4,728
(4,740)
2,407
519
(5,902)
6,594
63,617
43,354
(20,133)
(2,414)
3,701
(5,086)
(22,007)
(3,756)
14,439
13,446
126,110
85,161
5,126
(4,783)
(17,831)
6,440
(3,746)
(19,919)
108,622
67,936
(45,869)
272
(49)
3,994
(3,560)
(53,297)
2,932
(11,166)
10,785
(3,498)
(45,212)
(54,243)
9,735
(47,793)
－
－
(5)
(17,861)
(2,974)
(9,174)
6,914
(17,963)
20,000
(20,000)
(15,001)
(21,882)
(2,482)
2,003
(3,495)
(3,130)
42,430
3,240
45,670
Effect of exchange rate changes on cash and cash equivalents
(4,195)
(1,221)
Net cash used in financial activities
(68,073)
(48,413)
Net increase (decrease) in cash and cash equivalents
(8,858)
(35,942)
Cash and cash equivalents at beginning of the period
184,374
175,515
Cash and cash equivalents at end of the period
175,515
139,573
NSK REPORT 2017
63
Data Section
Analysis of Business Results for the Year Ended March 31, 2017
1
Overview of the Year Ended March 31, 2017
NSK celebrated its 100th anniversary on November 8, 2016.
To realize NSK’s Mission Statement, NSK has established
NSK Vision 2026 (Setting the Future in Motion), an
overarching vision of the type of company it aims to become
in the 10 years following its 100th anniversary.
Under NSK Vision 2026, the NSK Group has
commenced its Fifth Mid-Term Management Plan,
spanning the three years beginning April 2016. Under the
slogan “embark on new chapter in evolution towards next
100 years” with two key policies of “operational excellence”
and “innovate and challenge,” we are addressing three
main management tasks: achieving sustainable growth,
reconstructing our profit base and expanding into new
growth fields.
Looking at global conditions during the year ended
March 31, 2017, the Japanese economy underwent a
gradual recovery as consumer spending rose from a low,
despite the underlying trend of a stronger yen. The U.S.
economy continued its steady growth, driven largely by
solid consumer spending. The European economy
continued a moderate recovery trend, primarily in the
Eurozone. Meanwhile, the Chinese economy remained
resilient, while other Asian economies showed signs of a
gradual upturn. However, the future direction of the global
economy remains uncertain given the United Kingdom’s
decision to exit the European Union and increasing
concerns over global geopolitical risk.
Against the backdrop of this economic environment,
consolidated net sales for the year ended March 31, 2017,
totaled ¥949,170 million, a year-on-year decrease of 2.7%.
From a profit perspective, operating income came to
¥65,341 million, a year-on-year decrease of 27.0%. Income
before income taxes was ¥63,617 million, a year-on-year
decrease of 27.1%, and net income attributable to owners
of the parent was ¥45,560 million, a year-on-year decrease
of 30.7%.
2
Business Segment Information
Details regarding the market environment and results by business segment are as follows.
Industrial Machinery Business
Automotive Business
Sales in the Industrial Machinery Business decreased year on
year, although demand underwent a recovery after reaching a
trough in the second quarter. Looking at the Company’s
results by geographic breakdown, sales in Japan were lower,
primarily in the machine tool sector. In the Americas, sales in
the semiconductor and aftermarket sectors increased. In
Europe, sales declined primarily in the wind power and
aftermarket sectors. In China, sales in the electrical and
railcar sectors showed a steady increase. In other Asian
countries, overall sales remained sluggish, despite higher
demand in the semiconductor sector in South Korea.
With the appreciation of the yen also negatively affecting
results, net sales in the Industrial Machinery Business
totaled ¥226,924 million, a year-on-year decrease of 6.8%,
and operating income was ¥14,660 million, a year-on-year
decline of 27.3%.
The global automotive business continued its gradual
expansion. Looking at the Company’s results by
geographic breakdown, sales in Japan increased,
primarily in products for transmission systems. In the
Americas, sales in the North American market
decreased. In Europe, sales gradually recovered. In
China, sales remained high, backed by special tax
incentives for compact cars. Meanwhile, there was a
general upward demand trend in other Asian
countries.
Despite the above regional performance, the
yen’s appreciation negatively affected results.
Accordingly, net sales in the Automotive Business
totaled ¥696,271 million, a year-on-year decrease of
1.3%, and operating income totaled ¥64,577 million, a
year-on-year decline of 8.8%.
3
Analysis of Financial Position
Total assets were ¥1,043,955 million, an increase of
¥11,580 million compared with total assets as of the end of
the previous fiscal year. The main reasons for this were
increases of ¥18,621 million in trade receivables and other
receivables, ¥1,245 million in inventories, ¥8,231 million in
other financial assets (current), ¥2,024 million in other
current assets, ¥6,066 million in property, plant and
equipment, ¥2,741 million in other financial assets
(non-current) and ¥5,071 million in net defined benefit
assets, which offset a decrease of ¥35,942 million in cash
and cash equivalents.
Total liabilities were ¥558,943 million, an increase of
¥5,440 million compared with total liabilities as of the end
of the previous fiscal year. The main reasons for this
increase were ¥9,499 million in trade payables and other
payables, ¥11,566 million in other financial liabilities
(current), ¥4,375 million in other current liabilities, ¥13,471
million in provisions (non-current) and ¥1,548 million in
deferred tax liabilities, which offset decreases of ¥22,413
million in financial liabilities (non-current) and ¥13,353
million in net defined benefit liabilities.
Total equity was ¥485,011 million, an increase of
compared with the previous fiscal year-end to ¥318,603
million. As a result, the current ratio decreased from 1.74
times as of the previous fiscal year-end to 1.59 times.
Gross interest-bearing debt decreased ¥10,752 million
¥6,140 million compared with total equity as of the end of
compared with the end of the previous fiscal year-end to
the previous fiscal year. The main reasons for this increase
¥267,399 million. Net interest-bearing debt
were ¥45,560 million in net income attributable to owners
of the parent, which offset ¥13,987 million in treasury
shares, and ¥9,266 million in other components of equity
attributable to such factors as appreciation in the value of
the yen.
Total current assets decreased ¥4,969 million
compared with the previous fiscal year-end, to ¥506,284
million. Total current liabilities increased ¥25,355 million
(interest-bearing debt net of cash and cash equivalents)
was up ¥25,190 million compared with the previous fiscal
year-end to ¥127,826 million. The net D/E ratio increased
from 0.23 in the previous fiscal year to 0.28. Equity per
share attributable to owners of the parent increased from
¥839.56 to ¥873.11. The equity ratio attributable to owners
of the parent increased from 44.0% as of the previous
fiscal year-end to 44.2%.
4
Cash Flows
Total cash and cash equivalents at the end of the period stood at ¥139,573 million, a year-on-year decrease of
¥35,942 million. Cash flows for the fiscal year under review are presented as follows.
Cash Flows from Operating Activities
Cash Flows from Financial Activities
Net cash provided by operating activities totaled
¥67,936 million, a decrease of ¥40,686 million
compared with the previous fiscal year. This included
Net cash used in financial activities totaled ¥48,413
million, a decrease of ¥19,660 million compared with
the previous fiscal year. The main inflow was ¥20,000
¥63,617 million in income before income taxes, ¥43,354
million in proceeds from issuance of corporate bonds.
million in depreciation and amortisation, and ¥14,439
Meanwhile, the main outflows were ¥17,963 million in
million in trade payables. Meanwhile, the main
outflows were ¥20,133 million in net defined benefit
liability and net defined benefit asset, ¥22,007 million
in trade receivables and ¥19,919 million in income tax
repayments of long-term loans, ¥20,000 million in
payments for redemption of corporate bonds, ¥15,001
million in acquisition of treasury shares and ¥21,882
million in dividends paid.
paid.
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥54,243
million, an increase of ¥9,031 million compared with
the previous fiscal year. This included ¥53,297 million
in purchases of property, plant and equipment.
5
Fiscal Policy
The NSK Group’s finance is currently derived from its
breakdown of which was loans from financial
own funds and borrowings, etc. With regard to working
institutions of ¥145,193 million and unsecured
capital, in the case of financing through borrowing, it is
corporate bonds were ¥60 billion.
common to obtain short-term loans with a term of
Going forward, we aim to reduce our
less than one year in the local currency used by each
interest-bearing debt by strengthening our financial
consolidated company. As of March 31, 2017, the
and earnings structure. The NSK Group believes that it
outstanding balance of short-term loans was ¥62,206
is possible to finance the working capital and capital
million. Long-term funds, such as those for machinery
expenditure necessary to maintain growth through its
and equipment for production, are financed primarily
through long-term loans and corporate bonds. As of
sound financial situation, ability to generate cash flow
from operating activities, commitment line contracts
March 31, 2017, the outstanding balance of long-term
totaling ¥15 billion and the issuance of commercial
loans and corporate bonds was ¥205,193 million, the
paper amounting to ¥50 billion.
64
NSK REPORT 2017
NSK REPORT 2017
65
Data Section
Analysis of Business Results for the Year Ended March 31, 2017
1
Overview of the Year Ended March 31, 2017
NSK celebrated its 100th anniversary on November 8, 2016.
economy continued its steady growth, driven largely by
To realize NSK’s Mission Statement, NSK has established
NSK Vision 2026 (Setting the Future in Motion), an
solid consumer spending. The European economy
continued a moderate recovery trend, primarily in the
overarching vision of the type of company it aims to become
Eurozone. Meanwhile, the Chinese economy remained
in the 10 years following its 100th anniversary.
Under NSK Vision 2026, the NSK Group has
commenced its Fifth Mid-Term Management Plan,
spanning the three years beginning April 2016. Under the
slogan “embark on new chapter in evolution towards next
100 years” with two key policies of “operational excellence”
and “innovate and challenge,” we are addressing three
main management tasks: achieving sustainable growth,
reconstructing our profit base and expanding into new
growth fields.
Looking at global conditions during the year ended
March 31, 2017, the Japanese economy underwent a
gradual recovery as consumer spending rose from a low,
despite the underlying trend of a stronger yen. The U.S.
resilient, while other Asian economies showed signs of a
gradual upturn. However, the future direction of the global
economy remains uncertain given the United Kingdom’s
decision to exit the European Union and increasing
concerns over global geopolitical risk.
Against the backdrop of this economic environment,
consolidated net sales for the year ended March 31, 2017,
totaled ¥949,170 million, a year-on-year decrease of 2.7%.
From a profit perspective, operating income came to
¥65,341 million, a year-on-year decrease of 27.0%. Income
before income taxes was ¥63,617 million, a year-on-year
decrease of 27.1%, and net income attributable to owners
of the parent was ¥45,560 million, a year-on-year decrease
of 30.7%.
2
Business Segment Information
Details regarding the market environment and results by business segment are as follows.
Industrial Machinery Business
Automotive Business
Sales in the Industrial Machinery Business decreased year on
The global automotive business continued its gradual
year, although demand underwent a recovery after reaching a
trough in the second quarter. Looking at the Company’s
expansion. Looking at the Company’s results by
geographic breakdown, sales in Japan increased,
results by geographic breakdown, sales in Japan were lower,
primarily in products for transmission systems. In the
primarily in the machine tool sector. In the Americas, sales in
Americas, sales in the North American market
the semiconductor and aftermarket sectors increased. In
Europe, sales declined primarily in the wind power and
aftermarket sectors. In China, sales in the electrical and
railcar sectors showed a steady increase. In other Asian
countries, overall sales remained sluggish, despite higher
demand in the semiconductor sector in South Korea.
With the appreciation of the yen also negatively affecting
results, net sales in the Industrial Machinery Business
totaled ¥226,924 million, a year-on-year decrease of 6.8%,
and operating income was ¥14,660 million, a year-on-year
decline of 27.3%.
decreased. In Europe, sales gradually recovered. In
China, sales remained high, backed by special tax
incentives for compact cars. Meanwhile, there was a
general upward demand trend in other Asian
countries.
Despite the above regional performance, the
yen’s appreciation negatively affected results.
Accordingly, net sales in the Automotive Business
totaled ¥696,271 million, a year-on-year decrease of
1.3%, and operating income totaled ¥64,577 million, a
year-on-year decline of 8.8%.
3
Analysis of Financial Position
Total assets were ¥1,043,955 million, an increase of
assets, which offset a decrease of ¥35,942 million in cash
¥11,580 million compared with total assets as of the end of
and cash equivalents.
the previous fiscal year. The main reasons for this were
increases of ¥18,621 million in trade receivables and other
receivables, ¥1,245 million in inventories, ¥8,231 million in
other financial assets (current), ¥2,024 million in other
current assets, ¥6,066 million in property, plant and
equipment, ¥2,741 million in other financial assets
(non-current) and ¥5,071 million in net defined benefit
Total liabilities were ¥558,943 million, an increase of
¥5,440 million compared with total liabilities as of the end
of the previous fiscal year. The main reasons for this
increase were ¥9,499 million in trade payables and other
payables, ¥11,566 million in other financial liabilities
(current), ¥4,375 million in other current liabilities, ¥13,471
million in provisions (non-current) and ¥1,548 million in
deferred tax liabilities, which offset decreases of ¥22,413
million in financial liabilities (non-current) and ¥13,353
million in net defined benefit liabilities.
Total equity was ¥485,011 million, an increase of
¥6,140 million compared with total equity as of the end of
the previous fiscal year. The main reasons for this increase
were ¥45,560 million in net income attributable to owners
of the parent, which offset ¥13,987 million in treasury
shares, and ¥9,266 million in other components of equity
attributable to such factors as appreciation in the value of
the yen.
Total current assets decreased ¥4,969 million
compared with the previous fiscal year-end, to ¥506,284
million. Total current liabilities increased ¥25,355 million
compared with the previous fiscal year-end to ¥318,603
million. As a result, the current ratio decreased from 1.74
times as of the previous fiscal year-end to 1.59 times.
Gross interest-bearing debt decreased ¥10,752 million
compared with the end of the previous fiscal year-end to
¥267,399 million. Net interest-bearing debt
(interest-bearing debt net of cash and cash equivalents)
was up ¥25,190 million compared with the previous fiscal
year-end to ¥127,826 million. The net D/E ratio increased
from 0.23 in the previous fiscal year to 0.28. Equity per
share attributable to owners of the parent increased from
¥839.56 to ¥873.11. The equity ratio attributable to owners
of the parent increased from 44.0% as of the previous
fiscal year-end to 44.2%.
4
Cash Flows
Total cash and cash equivalents at the end of the period stood at ¥139,573 million, a year-on-year decrease of
¥35,942 million. Cash flows for the fiscal year under review are presented as follows.
Cash Flows from Operating Activities
Cash Flows from Financial Activities
Net cash used in financial activities totaled ¥48,413
million, a decrease of ¥19,660 million compared with
the previous fiscal year. The main inflow was ¥20,000
million in proceeds from issuance of corporate bonds.
Meanwhile, the main outflows were ¥17,963 million in
repayments of long-term loans, ¥20,000 million in
payments for redemption of corporate bonds, ¥15,001
million in acquisition of treasury shares and ¥21,882
million in dividends paid.
Net cash provided by operating activities totaled
¥67,936 million, a decrease of ¥40,686 million
compared with the previous fiscal year. This included
¥63,617 million in income before income taxes, ¥43,354
million in depreciation and amortisation, and ¥14,439
million in trade payables. Meanwhile, the main
outflows were ¥20,133 million in net defined benefit
liability and net defined benefit asset, ¥22,007 million
in trade receivables and ¥19,919 million in income tax
paid.
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥54,243
million, an increase of ¥9,031 million compared with
the previous fiscal year. This included ¥53,297 million
in purchases of property, plant and equipment.
5
Fiscal Policy
The NSK Group’s finance is currently derived from its
own funds and borrowings, etc. With regard to working
capital, in the case of financing through borrowing, it is
common to obtain short-term loans with a term of
less than one year in the local currency used by each
consolidated company. As of March 31, 2017, the
outstanding balance of short-term loans was ¥62,206
million. Long-term funds, such as those for machinery
and equipment for production, are financed primarily
through long-term loans and corporate bonds. As of
March 31, 2017, the outstanding balance of long-term
loans and corporate bonds was ¥205,193 million, the
breakdown of which was loans from financial
institutions of ¥145,193 million and unsecured
corporate bonds were ¥60 billion.
Going forward, we aim to reduce our
interest-bearing debt by strengthening our financial
and earnings structure. The NSK Group believes that it
is possible to finance the working capital and capital
expenditure necessary to maintain growth through its
sound financial situation, ability to generate cash flow
from operating activities, commitment line contracts
totaling ¥15 billion and the issuance of commercial
paper amounting to ¥50 billion.
64
NSK REPORT 2017
NSK REPORT 2017
65
Data Section
Basic Knowledge of Bearings
Here, we provide basic information on bearings.
Function
Structure and Function
A surprisingly large number of bearings can be found all around us. Take automobiles, for example: There are 100
to 150 bearings in a typical car. Without bearings, the wheels would rattle, the transmission gear teeth would not
be able to mesh, and the car would not run smoothly. Bearings are used not only in cars but in all kinds of
machinery such as trains, airplanes, washing machines, refrigerators, air conditioners, vacuum cleaners,
photocopy machines, computers and satellites. Bearings enhance the functionality of machinery and help to save
energy. Bearings do their work silently, in tough environments, hidden in machinery where we cannot see them.
Nevertheless, bearings are crucial for the stable operation of machinery and for ensuring top performance.
The term bearing incorporates the meaning of "to bear," in the sense of "to support," and "to carry a burden."
This refers to the fact that bearings support and carry the burden of revolving axles.
Structure
The ball bearings and roller bearings
pictured to the right represent two typical
types of the most basic bearings, known
as rolling bearings. Rolling bearings are
made up of four elements: an outer ring,
an inner ring as well as rolling and
cage elements and have an extremely
simple basic structure.
Outer ring
Cage
Inner
ring
Rolling
elements
(balls)
Outer ring
Rolling
elements
(rollers)
Cage
Inner ring
Ball Bearing
Roller Bearing
Main Manufacturing Processes for Bearings
The basic function of bearings is principally to reduce mechanical friction. Reducing friction means:
1.
2.
3.
Machinery will run more efficiently
There will be less frictional wear,
Preventing abrasion burn and avoiding
extending the operating life of the machinery
mechanical breakdown
Bearings also contribute to lower energy consumption by reducing friction and allowing the efficient
transmission of power. This is just one way in which bearings are environmentally friendly.
Types of Bearings
A brief overview of typical bearings is presented as follows.
1
Deep groove ball bearing
2
Angular contact thrust ball bearing
3
Thrust ball bearing
4
Cylindrical roller bearing
This is the
most widely
used bearing
in the world.
In this type, the
rolling element
meets the inner and
outer ring raceways
Thrust ball
bearings are
capable of
handling loads in
at a contact angle. This bearing can
the axial direction (axial loads).
carry radial and axial loads.
They can support heavy loads.
The rolling
elements are
the cylindrical
roller type.
5
Tapered roller bearing
6
Self-aligning roller bearing
7
Thrust needle bearing
8
Cage and roller
The rolling
elements are of
the tapered
roller type.
This bearing has
an automatic
aligning function
to compensate
This bearing is
used in parts
such as
compressors
This is one of
several kinds of
bearings used
in vehicles'
Because the rollers are tapered,
for minute misalignments
this bearing is able to carry
between the inner and outer
combined axial and radial loads.
rings during operation.
that deliver the air in
manual transmissions. It is
automobile air-conditioning
required to be highly
units.
durable.
Turning (Supplier)
Rough machining/
cutting-off
Raceway, chamfer
processing
Outer ring
materials
(Steel tubes)
Inner ring
materials
(Steel tubes)
Forging (Supplier)
Heating (1,150℃–1,200℃)
Cutting
(Steel bars)
Hole punching
Outer and inner rings separation
Outer ring
Inner ring
Inner ring
Rolling (CRF)
Turning
Outer ring
Die roll
Inner ring
Outer ring
Process into a ring shape by turning or forging the steel
tubes, and turn the raceway and the inner surface of the
rings (both outer and inner rings).
66
NSK REPORT 2017
Heat Treatment
Process
Outer ring
heat treatment
Face grinding
Outer ring
face grinding
Outer
surface grinding
Outer ring outer
surface grinding
Grinding Process
Raceway grinding
Inner
surface grinding
Outer ring
raceway
grinding
Superfinishing
Outer ring
raceway
superfinishing
Inner ring
heat treatment
Imparts
hardness
and
toughness
Inner ring
face grinding
Inner ring
raceway
grinding
Inner ring
inner surface
grinding
Inner ring
raceway
superfinishing
Inner ring
washing
Grinding both side surfaces, the outer surfaces, the raceway
surfaces, and the inner surfaces, etc. of the outer and inner rings
will create precision. The superfinishing of the raceway is carried
out to reduce surface roughness. We also inspect the bearings from
various angles at each process and ensure quality requirements.
Note: Pink-colored objects (example: ) show the grinding stones.
Assembly Process
Completion/Packaging Processes
Shipping
Outer ring
washing
Assembly and
ball insertion
Retainers
insertion
Washing
Grease
injection
Insertion
of seals
(shields)
Completion
Packaging
To customers,
keeping to
delivery dates
After washing, we assemble balls, inner
and outer rings, insert the retainer, and
carry out riveting.
After injecting grease and sealing it in seals (shields),
we perform a total inspection and pack in
accordance with customer requirements.
NSK REPORT 2017
67
Data Section
Basic Knowledge of Bearings
Here, we provide basic information on bearings.
Function
Structure and Function
A surprisingly large number of bearings can be found all around us. Take automobiles, for example: There are 100
to 150 bearings in a typical car. Without bearings, the wheels would rattle, the transmission gear teeth would not
be able to mesh, and the car would not run smoothly. Bearings are used not only in cars but in all kinds of
machinery such as trains, airplanes, washing machines, refrigerators, air conditioners, vacuum cleaners,
photocopy machines, computers and satellites. Bearings enhance the functionality of machinery and help to save
energy. Bearings do their work silently, in tough environments, hidden in machinery where we cannot see them.
Nevertheless, bearings are crucial for the stable operation of machinery and for ensuring top performance.
The term bearing incorporates the meaning of "to bear," in the sense of "to support," and "to carry a burden."
This refers to the fact that bearings support and carry the burden of revolving axles.
Structure
The ball bearings and roller bearings
pictured to the right represent two typical
types of the most basic bearings, known
as rolling bearings. Rolling bearings are
made up of four elements: an outer ring,
an inner ring as well as rolling and
cage elements and have an extremely
simple basic structure.
Outer ring
Cage
Inner
ring
Rolling
elements
(balls)
Outer ring
Rolling
elements
(rollers)
Cage
Inner ring
Ball Bearing
Roller Bearing
Main Manufacturing Processes for Bearings
The basic function of bearings is principally to reduce mechanical friction. Reducing friction means:
1.
Machinery will run more efficiently
2.
There will be less frictional wear,
extending the operating life of the machinery
3.
Preventing abrasion burn and avoiding
mechanical breakdown
Bearings also contribute to lower energy consumption by reducing friction and allowing the efficient
transmission of power. This is just one way in which bearings are environmentally friendly.
Types of Bearings
A brief overview of typical bearings is presented as follows.
1
Deep groove ball bearing
2
Angular contact thrust ball bearing
3
Thrust ball bearing
4
Cylindrical roller bearing
This is the
most widely
used bearing
in the world.
In this type, the
rolling element
meets the inner and
outer ring raceways
at a contact angle. This bearing can
carry radial and axial loads.
Thrust ball
bearings are
capable of
handling loads in
the axial direction (axial loads).
They can support heavy loads.
The rolling
elements are
the cylindrical
roller type.
5
Tapered roller bearing
6
Self-aligning roller bearing
7
Thrust needle bearing
8
Cage and roller
The rolling
elements are of
the tapered
roller type.
This bearing has
an automatic
aligning function
to compensate
This bearing is
used in parts
such as
compressors
This is one of
several kinds of
bearings used
in vehicles'
Because the rollers are tapered,
this bearing is able to carry
combined axial and radial loads.
for minute misalignments
between the inner and outer
rings during operation.
that deliver the air in
automobile air-conditioning
units.
manual transmissions. It is
required to be highly
durable.
Heat Treatment
Process
Outer ring
heat treatment
Face grinding
Outer ring
face grinding
Outer
surface grinding
Outer ring outer
surface grinding
Grinding Process
Raceway grinding
Inner
surface grinding
Outer ring
raceway
grinding
Superfinishing
Outer ring
raceway
superfinishing
Assembly Process
Completion/Packaging Processes
Shipping
Outer ring
washing
Assembly and
ball insertion
Retainers
insertion
Washing
Grease
injection
Insertion
of seals
(shields)
Completion
Packaging
Inner ring
face grinding
Inner ring
raceway
grinding
Inner ring
inner surface
grinding
Inner ring
raceway
superfinishing
Inner ring
washing
After washing, we assemble balls, inner
and outer rings, insert the retainer, and
carry out riveting.
After injecting grease and sealing it in seals (shields),
we perform a total inspection and pack in
accordance with customer requirements.
Inner ring
heat treatment
Imparts
hardness
and
toughness
Outer ring
Inner ring
Inner ring
Grinding both side surfaces, the outer surfaces, the raceway
surfaces, and the inner surfaces, etc. of the outer and inner rings
will create precision. The superfinishing of the raceway is carried
out to reduce surface roughness. We also inspect the bearings from
various angles at each process and ensure quality requirements.
Note: Pink-colored objects (example: ) show the grinding stones.
To customers,
keeping to
delivery dates
NSK REPORT 2017
67
Turning (Supplier)
Rough machining/
Raceway, chamfer
cutting-off
processing
Outer ring
materials
(Steel tubes)
Inner ring
materials
(Steel tubes)
Forging (Supplier)
Heating (1,150℃–1,200℃)
Cutting
(Steel bars)
Hole punching
Outer and inner rings separation
Rolling (CRF)
Turning
Outer ring
Die roll
Inner ring
Outer ring
Process into a ring shape by turning or forging the steel
tubes, and turn the raceway and the inner surface of the
rings (both outer and inner rings).
66
NSK REPORT 2017
Data Section
Glossary
Term
Actuator
Aftermarket
Alternator
AT
Ball Screw
BCP
Brake Boosters
Clutch Assembly
CMS
Column-Type EPS
Conflict Minerals
CSR Procurement
Design Quality
ECU
Meaning
Term
Meaning
Actuators refer to mechanical components that, for example, play a role in the actuation of brakes and gear shifting of
automobiles.
Hub Unit Bearings
A hub for automobiles is the component where the wheels are screwed on. Hub unit bearings are used for the rotation
part of the hub and are unit-type bearings integrated with coupling parts. Depending on the level of integration, there are
Aftermarket refers to maintenance and repair demand. In NSK, aftermarket mainly means the demand and business
for repair and replacement.
An alternator is an electric generator to use and change engine rotation to electricity. The term alternator derives from
alternating current.
AT stands for Automatic Transmission. Automatic transmission is one type of transmission found in automobiles and
motorcycles. ATs are equipped with a function that automatically changes the gear ratio in response to vehicle speed
and the rotational velocity of the engine.
A ball screw is a machinery part consisting of a screw shaft, nut and ball, etc. Ball screws convert rotation into linear
motion and enable accurate positioning. In ball screws, a rolling element (ball) like the ones used in bearings is
incorporated in the section where the groove of the screw and screw head contact each other and, similar to a bearing,
the ball screw moves smoothly and features minute levels of friction resistance.
BCP stands for Business Continuity Plan. In a BCP, companies determine activities in normal times and the methods
and means for continuing business in times of emergency to minimize damage to business assets and to allow
continuation or early recovery of the core business in the event of emergency situations such as natural disasters,
large fires and terrorist attacks.
One of the components of an automobile’s brake is referred to as a brake booster. A system that helps reduce the
amount of force needed from the driver to operate the brake. One type that makes use of the engine intake’s negative
pressure for its operation was mainstream, but the shift toward electrification is ongoing.
Unit component used for automobile automatic transmissions (ATs) that consists of friction plates, separator plates,
clutch housing, etc. Clutch assembly serves the function of transmitting or shutting off motive power.
CMS stands for Condition Monitoring System. One example of a CMS is a system for understanding/ analyzing the
operational status of bearings (e.g., vibration, noise, rotational torque) based on various data by bearings with sensors
installed.
Column-type EPS is a type of Electric Power Steering which has a power assist element of a motor located on the
steering column. The steering column is a component that conveys the turning of the steering wheel of vehicles to the
steering gear, and the steering column adjusts the steering wheel position and mitigates the impact during a collision.
NSK has been strong at steering column production and boasts a top-class world market share of column-type EPS.
Minerals that lead to sources of funds for armed groups and antigovernment forces that violate human rights, the
procurement of which gives rise to concerns about complicity in conflicts. Under the U.S. Dodd-Frank Wall Street
Reform and Consumer Protection Act, companies listed on the U.S. market are obliged to investigate usage and
disclose information every year with regard to the four minerals (tin, tantalum, tungsten and gold) mined in the
Democratic Republic of Congo and adjoining countries.
CSR procurement refers to the procurement of raw materials and parts in consideration of compliance with laws and
regulations, environmental protection, human rights, occupational safety and health.
Operational Excellence
In this report, operational excellence refers to “efforts to enhance front-line capability to increase the competitiveness
of the NSK Group’s business.”
Design quality is targeted quality and is quality set in the design phase and realized in order to satisfy the functions and
performance of products.
ECU stands for Electronic Control Unit. By using electronic circuits, ECU is a device that controls the operation of a
motor, etc. Among NSK’s products, ECU used for electric power steering is particularly important.
Electric Power Steering
Please refer to “EPS.”
Environmentally Friendly
Products
Environmentally friendly products refer to the products that perform better than existing products in order to help reduce
the impact human societies have on the natural environment. The NSK Group works on product manufacturing that
contributes to a reduction of the impact on the environment by upholding the following standards:
1. Each product should contribute toward the energy and resource conservation of the machine in which
it is installed.
2. The amount of energy and resources required during product manufacturing should be minimal.
3. Environmentally harmful substances should not be used in products or manufacturing processes.
4. Products should contribute to the health and safety of end users by having low emissions of vibration,
noise and dust.
(Please also refer to page 46.)
EPS stands for Electric Power Steering. An EPS is a mechanism that supports the turning of automobile steering
wheels (in other words, enabling the turning of steering wheels even with light force) by using an electric motor instead
of hydraulic power. EPS can be divided into three types (column type, pinion type and rack type) depending on the
location of the motor to which the power assist is provided.
EV stands for Electric Vehicle. EVs are automobiles that drive the wheels by using electric motors as the power source.
EPS
EV
Four Core Technologies
Four core technologies refer to NSK’s core technologies. For details, please refer to page 34.
Friction Plate
GAM
Green Procurement
Clutch component used for automobile automatic transmission (AT), etc. Manufactured by using an adhesive to attach
friction material facings to a disk-shaped plate. Used in combination with a separator plate to transmit or cut torque.
GAM stands for Global Account Manager in NSK. GAMs coordinate the global platform projects of automobiles across
regions.
Green procurement refers to the procurement of raw materials in consideration of the environment. The NSK Group has
stipulated the NSK Group Green Procurement Standards
(http://www.nsk.com/sustainability/csrReport/supplemental/greenps.html).
IoT
KAM
MRO
NIT
various types of hub unit bearings.
IoT stands for the Internet of Things. IoT is a concept to generate new value by collecting data via the Internet from
sensors embedded on various things such as automobiles, home appliances, industrial machines and public
infrastructure, and analyzing such data. IoT leads to such technological innovation as efficiency increases in
machine control in plants, advertising according to individual tastes, detailed adjustment of power supply and
monitoring senior citizens through home appliances.
KAM stands for Key Account Manager in NSK. KAMs coordinate with Global Account Managers for key customers in
each region and build close relationships with customers as the contact person in individual regions. By taking
advantage of such close relationships with customers, KAMs have a role in regional sales activity and response in
technological matters.
stations, etc.
Linear Guide
A linear guide is a machinery part that is used for the section to support the linear motion of machines. Linear guides
are one of the linear motion products and are used for machine tools, transfer machines and platform screen doors at
Lower-Assist EPS
Mother Plant
Lower-assist EPS refers to rack-type EPS and pinion-type EPS (single pinion, dual pinion) that provide power assist near
the tires among the types of electric power steering. Column-type EPS provides assist near the steering wheel.
We position plants with outstanding capacity such as excellent technical ability and significant production capacity as
Mother plants. In NSK, Mother plants have the role of transferring technology, etc., to the plants located overseas.
MRO stands for Maintenance, Repair or Replacement, Operation. In NSK Report 2017, we make references to the
demand for maintenance and repair services of industrial machines and equipment in the Industrial Machinery Business.
Needle Bearing
Bearing with needle-type rolling elements. Low cross-sectional height and high load capacity helps realize space-saving.
NIT stands for NSK Institute of Technology, which is an internal educational institute for our engineers to master more
advanced technology.
NSK Manufacturing Education
and Training Center
The NSK Manufacturing Education and Training Center was established in 2005 for the purpose of passing on
technical skills in the production section to the next generation and fostering production site leaders.
OHSAS 18001
OHSAS stands for Occupational Health and Safety Assessment Series. This standard was issued by the British
Standards Institution (BSI) as OHSAS 18001 in 1999 with support from 13 institutions such as standardization-related
groups and certification institutions around the world. OHSAS 18001 is a mechanism for managing occupational safety
and health management risks that relate to workers such as health hazards and occupational accidents and for
improving the performance.
Omni-Wheel
Having a number of small, barrel-shaped, multi-directional rollers attached in its circumferential direction, this wheel
can freely move not only forward and backward but also to the left and right.
Per Production Unit
Per production unit refers to the standard amount of raw materials, workforce, power, etc., that are necessary to
produce a certain amount of industrial products. “CO2 emission per production unit” means CO2 (carbon dioxide)
emissions discharged in the process of production of a certain amount of a product.
Planetary Gear
Powertrain
Product Quality
Planetary gear refers to a epicylic gearing mechanism consisting of three elements̶sun gear, planetary gear and ring
gear.
Powertrain describes the main components that generate power and deliver to the drive wheel in automobiles.
Product quality is also called resulting quality, and it is the quality of products actually manufactured. Product quality is
realized by control of the manufacturing phase.
PSI Management
The PSI of PSI Management stands for Production, Sales and Inventory. PSI Management refers to the appropriate
management and operation of production, sales and inventory.
QCDDSM
QCDDSM stands for Quality, Cost, Delivery, Development, Service and Management. The QCDDSM elements are
generally focused on by the manufacturing industry including NSK.
Rack-Type EPS
Rack-type EPS is electric power steering that assists tire direction movement with a rack shaft in the steering gear
section.
(Please also refer to “Lower-Assist EPS.”)
Sales Channel
Smart Factory
Warranty
Sales channels mean sales routes. Distributors play a role in the product supply to end users as sales channels.
Smart Factory in this report refers to a new concept factory set up in the Fifth Mid-Term Management Plan. The status
of equipment and processing in each process during manufacturing is understood with data in real time, which is
utilized for quality control, equipment maintenance and product traceability. The understanding and management of big
data are realized by advancements in Information Technology (IT). The evolution of the informatization of things such as
IoT is the technology behind the Smart Factory.
UK Modern Slavery Act 2015
The Modern Slavery Act 2015 c.30 was established in 2015 in the United Kingdom to respond to crimes such as human
trade, forced labor and sexual exploitation.
Product warranty, under which the original manufacturer of a product or product dealer shall provide the purchaser
with regulations to respond to the free repair or replacement of the product for a certain period of time and in
accordance with certain conditions. In the case of automobiles, the deciding condition is the period of time that has
elapsed since the purchase of a new car or the mileage driven. There are cases where the warranty periods for core
units, such as engines and transmissions, and for each component differ.
68
NSK REPORT 2017
NSK REPORT 2017
69
Data Section
Glossary
Term
Actuator
Aftermarket
Alternator
AT
Ball Screw
BCP
Brake Boosters
Clutch Assembly
CMS
Column-Type EPS
Conflict Minerals
Meaning
automobiles.
for repair and replacement.
alternating current.
Aftermarket refers to maintenance and repair demand. In NSK, aftermarket mainly means the demand and business
An alternator is an electric generator to use and change engine rotation to electricity. The term alternator derives from
AT stands for Automatic Transmission. Automatic transmission is one type of transmission found in automobiles and
motorcycles. ATs are equipped with a function that automatically changes the gear ratio in response to vehicle speed
and the rotational velocity of the engine.
A ball screw is a machinery part consisting of a screw shaft, nut and ball, etc. Ball screws convert rotation into linear
motion and enable accurate positioning. In ball screws, a rolling element (ball) like the ones used in bearings is
incorporated in the section where the groove of the screw and screw head contact each other and, similar to a bearing,
the ball screw moves smoothly and features minute levels of friction resistance.
BCP stands for Business Continuity Plan. In a BCP, companies determine activities in normal times and the methods
and means for continuing business in times of emergency to minimize damage to business assets and to allow
continuation or early recovery of the core business in the event of emergency situations such as natural disasters,
large fires and terrorist attacks.
One of the components of an automobile’s brake is referred to as a brake booster. A system that helps reduce the
amount of force needed from the driver to operate the brake. One type that makes use of the engine intake’s negative
pressure for its operation was mainstream, but the shift toward electrification is ongoing.
Unit component used for automobile automatic transmissions (ATs) that consists of friction plates, separator plates,
clutch housing, etc. Clutch assembly serves the function of transmitting or shutting off motive power.
CMS stands for Condition Monitoring System. One example of a CMS is a system for understanding/ analyzing the
operational status of bearings (e.g., vibration, noise, rotational torque) based on various data by bearings with sensors
installed.
Column-type EPS is a type of Electric Power Steering which has a power assist element of a motor located on the
steering column. The steering column is a component that conveys the turning of the steering wheel of vehicles to the
steering gear, and the steering column adjusts the steering wheel position and mitigates the impact during a collision.
NSK has been strong at steering column production and boasts a top-class world market share of column-type EPS.
Minerals that lead to sources of funds for armed groups and antigovernment forces that violate human rights, the
procurement of which gives rise to concerns about complicity in conflicts. Under the U.S. Dodd-Frank Wall Street
Reform and Consumer Protection Act, companies listed on the U.S. market are obliged to investigate usage and
disclose information every year with regard to the four minerals (tin, tantalum, tungsten and gold) mined in the
Democratic Republic of Congo and adjoining countries.
ECU
ECU stands for Electronic Control Unit. By using electronic circuits, ECU is a device that controls the operation of a
motor, etc. Among NSK’s products, ECU used for electric power steering is particularly important.
Electric Power Steering
Please refer to “EPS.”
Environmentally Friendly
Products
Environmentally friendly products refer to the products that perform better than existing products in order to help reduce
the impact human societies have on the natural environment. The NSK Group works on product manufacturing that
contributes to a reduction of the impact on the environment by upholding the following standards:
1. Each product should contribute toward the energy and resource conservation of the machine in which
it is installed.
2. The amount of energy and resources required during product manufacturing should be minimal.
3. Environmentally harmful substances should not be used in products or manufacturing processes.
4. Products should contribute to the health and safety of end users by having low emissions of vibration,
noise and dust.
(Please also refer to page 46.)
EPS stands for Electric Power Steering. An EPS is a mechanism that supports the turning of automobile steering
wheels (in other words, enabling the turning of steering wheels even with light force) by using an electric motor instead
of hydraulic power. EPS can be divided into three types (column type, pinion type and rack type) depending on the
location of the motor to which the power assist is provided.
EV stands for Electric Vehicle. EVs are automobiles that drive the wheels by using electric motors as the power source.
Four Core Technologies
Four core technologies refer to NSK’s core technologies. For details, please refer to page 34.
Friction Plate
Clutch component used for automobile automatic transmission (AT), etc. Manufactured by using an adhesive to attach
friction material facings to a disk-shaped plate. Used in combination with a separator plate to transmit or cut torque.
GAM stands for Global Account Manager in NSK. GAMs coordinate the global platform projects of automobiles across
regions.
Green Procurement
Green procurement refers to the procurement of raw materials in consideration of the environment. The NSK Group has
stipulated the NSK Group Green Procurement Standards
(http://www.nsk.com/sustainability/csrReport/supplemental/greenps.html).
EPS
EV
GAM
Actuators refer to mechanical components that, for example, play a role in the actuation of brakes and gear shifting of
Hub Unit Bearings
IoT
KAM
A hub for automobiles is the component where the wheels are screwed on. Hub unit bearings are used for the rotation
part of the hub and are unit-type bearings integrated with coupling parts. Depending on the level of integration, there are
various types of hub unit bearings.
IoT stands for the Internet of Things. IoT is a concept to generate new value by collecting data via the Internet from
sensors embedded on various things such as automobiles, home appliances, industrial machines and public
infrastructure, and analyzing such data. IoT leads to such technological innovation as efficiency increases in
machine control in plants, advertising according to individual tastes, detailed adjustment of power supply and
monitoring senior citizens through home appliances.
KAM stands for Key Account Manager in NSK. KAMs coordinate with Global Account Managers for key customers in
each region and build close relationships with customers as the contact person in individual regions. By taking
advantage of such close relationships with customers, KAMs have a role in regional sales activity and response in
technological matters.
Term
Meaning
Linear Guide
A linear guide is a machinery part that is used for the section to support the linear motion of machines. Linear guides
are one of the linear motion products and are used for machine tools, transfer machines and platform screen doors at
stations, etc.
Lower-Assist EPS
Lower-assist EPS refers to rack-type EPS and pinion-type EPS (single pinion, dual pinion) that provide power assist near
the tires among the types of electric power steering. Column-type EPS provides assist near the steering wheel.
Mother Plant
MRO
Needle Bearing
NIT
We position plants with outstanding capacity such as excellent technical ability and significant production capacity as
Mother plants. In NSK, Mother plants have the role of transferring technology, etc., to the plants located overseas.
MRO stands for Maintenance, Repair or Replacement, Operation. In NSK Report 2017, we make references to the
demand for maintenance and repair services of industrial machines and equipment in the Industrial Machinery Business.
Bearing with needle-type rolling elements. Low cross-sectional height and high load capacity helps realize space-saving.
NIT stands for NSK Institute of Technology, which is an internal educational institute for our engineers to master more
advanced technology.
NSK Manufacturing Education
and Training Center
The NSK Manufacturing Education and Training Center was established in 2005 for the purpose of passing on
technical skills in the production section to the next generation and fostering production site leaders.
OHSAS 18001
OHSAS stands for Occupational Health and Safety Assessment Series. This standard was issued by the British
Standards Institution (BSI) as OHSAS 18001 in 1999 with support from 13 institutions such as standardization-related
groups and certification institutions around the world. OHSAS 18001 is a mechanism for managing occupational safety
and health management risks that relate to workers such as health hazards and occupational accidents and for
improving the performance.
Omni-Wheel
Having a number of small, barrel-shaped, multi-directional rollers attached in its circumferential direction, this wheel
can freely move not only forward and backward but also to the left and right.
CSR Procurement
CSR procurement refers to the procurement of raw materials and parts in consideration of compliance with laws and
regulations, environmental protection, human rights, occupational safety and health.
Operational Excellence
In this report, operational excellence refers to “efforts to enhance front-line capability to increase the competitiveness
of the NSK Group’s business.”
Design Quality
Design quality is targeted quality and is quality set in the design phase and realized in order to satisfy the functions and
Per Production Unit
performance of products.
Planetary Gear
Powertrain
Product Quality
PSI Management
QCDDSM
Rack-Type EPS
Sales Channel
Smart Factory
Per production unit refers to the standard amount of raw materials, workforce, power, etc., that are necessary to
produce a certain amount of industrial products. “CO2 emission per production unit” means CO2 (carbon dioxide)
emissions discharged in the process of production of a certain amount of a product.
Planetary gear refers to a epicylic gearing mechanism consisting of three elements̶sun gear, planetary gear and ring
gear.
Powertrain describes the main components that generate power and deliver to the drive wheel in automobiles.
Product quality is also called resulting quality, and it is the quality of products actually manufactured. Product quality is
realized by control of the manufacturing phase.
The PSI of PSI Management stands for Production, Sales and Inventory. PSI Management refers to the appropriate
management and operation of production, sales and inventory.
QCDDSM stands for Quality, Cost, Delivery, Development, Service and Management. The QCDDSM elements are
generally focused on by the manufacturing industry including NSK.
Rack-type EPS is electric power steering that assists tire direction movement with a rack shaft in the steering gear
section.
(Please also refer to “Lower-Assist EPS.”)
Sales channels mean sales routes. Distributors play a role in the product supply to end users as sales channels.
Smart Factory in this report refers to a new concept factory set up in the Fifth Mid-Term Management Plan. The status
of equipment and processing in each process during manufacturing is understood with data in real time, which is
utilized for quality control, equipment maintenance and product traceability. The understanding and management of big
data are realized by advancements in Information Technology (IT). The evolution of the informatization of things such as
IoT is the technology behind the Smart Factory.
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NSK REPORT 2017
69
UK Modern Slavery Act 2015
The Modern Slavery Act 2015 c.30 was established in 2015 in the United Kingdom to respond to crimes such as human
trade, forced labor and sexual exploitation.
Warranty
Product warranty, under which the original manufacturer of a product or product dealer shall provide the purchaser
with regulations to respond to the free repair or replacement of the product for a certain period of time and in
accordance with certain conditions. In the case of automobiles, the deciding condition is the period of time that has
elapsed since the purchase of a new car or the mileage driven. There are cases where the warranty periods for core
units, such as engines and transmissions, and for each component differ.
Data Section
NSK Group
As of March 31, 2017
Region
Company name
Consolidated
equity
Outline of business
Region
Company name
Consolidated
Outline of business
equity
Japan
NSK STEERING SYSTEMS CO., LTD.
100.0%
Manufacture of automotive components
Netherlands
NSK EUROPEAN DISTRIBUTION CENTRE B.V.
100.0% Distribution service
NSK MICRO PRECISION CO., LTD.
55.0%
Manufacture and sales of automotive bearings, etc.
NSK MICRO PRECISION CO., LTD. (NAGANO)
100.0%
Manufacture of automotive bearings, etc.
AMATSUJI STEEL BALL MFG. CO., LTD.
100.0%
Manufacture and sales of steel balls
AKS EAST JAPAN CO., LTD.
100.0%
Manufacture of steel balls
NSK KYUSHU CO., LTD.
ASAHI SEIKI CO., LTD.
NSK TOYAMA CO., LTD.
SHINWA SEIKO CO., LTD.
KURIBAYASHI SEISAKUSHO CO., LTD.
NSK MACHINERY CO., LTD.
NSK REAL ESTATE CO., LTD.
NISSEI BLDG. MANAGEMENT LTD.
NSK-CHUGAI, LTD.
100.0%
Manufacture of precision machinery & parts
73.8%
Manufacture of industrial machinery bearing parts, etc.
100.0%
Manufacture of industrial machinery bearing parts
82.4%
73.5%
Manufacture of automotive bearing parts, etc.
Manufacture and sales of automotive bearing parts
100.0%
Manufacture of machine tools, etc.
100.0%
Real estate management and rental, etc.
70.0%
65.0%
Management of Nissei Building
Insurance agent and sales of electrical components, etc.
NSK HUMAN RESOURCE SERVICES LTD.
100.0%
Consignment services for salary and welfare, education and recruitment
NSK LOGISTICS CO., LTD.
100.0%
Distribution service
NSK NETWORK AND SYSTEMS CO., LTD.
ADTECH CORPORATION
100.0%
100.0%
Design and development for computer systems, etc.
Research and development of automotive components
NSK OVERSEAS HOLDINGS CO., LTD.
100.0%
Holding company of subsidiaries
NSK-WARNER K.K.
CHITOSE SANGYO CO., LTD.
INOUE JIKUUKE KOGYO CO., LTD.
50.0%
50.0%
40.0%
Manufacture and sales of automotive-related products
Manufacture of automotive-related products
Manufacture and sales of industrial machinery bearings
THE AMERICAS
U.S.A.
NSK AMERICAS, INC.
NSK CORPORATION
NSK PRECISION AMERICA, INC.
NSK LATIN AMERICA, INC.
NSK STEERING SYSTEMS AMERICA, INC.
NSK-AKS PRECISION BALL COMPANY
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Control of American subsidiaries and affiliates
Manufacture and sales of automotive bearings, etc.
Manufacture and sales of precision machinery & parts
Sales of industrial machinery bearings, etc.
Manufacture and sales of automotive components
Manufacture and sales of steel balls
Canada
Mexico
NSK CANADA INC.
100.0% Sales of industrial machinery bearings, etc.
NSK RODAMIENTOS MEXICANA, S.A. DE C.V.
NSK BEARINGS MANUFACTURING, MEXICO, S.A. DE C.V.
100.0%
100.0%
Sales of industrial machinery bearings, etc.
Manufacture of automotive bearings, etc.
Brazil
NSK BRASIL LTDA.
100.0% Manufacture and sales of industrial machinery bearings, etc.
Argentina
NSK ARGENTINA S.R.L.
100.0% Sales of industrial machinery bearings, etc.
Peru
NSK PERU S.A.C.
100.0% Sales support of industrial machinery bearings, etc.
EUROPE
U.K.
NSK EUROPE LTD.
NSK UK LTD.
NSK BEARINGS EUROPE LTD.
NSK STEERING SYSTEMS EUROPE LTD.
NSK PRECISION UK LTD.
AKS PRECISION BALL EUROPE LTD.
Germany
NSK EUROPA HOLDING GMBH
NSK DEUTSCHLAND GMBH
NEUWEG FERTIGUNG GMBH
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Control of European subsidiaries and affiliates
Sales of industrial machinery bearings, etc.
Manufacture of automotive bearings, etc.
Manufacture of automotive components
Manufacture of precision machinery & parts
Manufacture and sales of steel balls
Holding company of subsidiaries in Germany
Sales of industrial machinery bearings, etc.
Manufacture of industrial machinery bearings
France
NSK FRANCE S.A.S.
100.0% Sales of industrial machinery bearings, etc.
Italy
Spain
NSK ITALIA S.P.A.
NSK SPAIN S.A.
100.0% Sales of industrial machinery bearings, etc.
100.0% Sales of industrial machinery bearings, etc.
Poland
NSK BEARINGS POLSKA S.A.
NSK POLSKA SP. Z O.O.
Manufacture of automotive bearings, etc.
Sales of industrial machinery bearings, etc.
NSK STEERING SYSTEMS EUROPE (POLSKA) SP. Z O.O.
Manufacture of automotive components
100.0%
NSK NEEDLE BEARING POLAND SP. Z O.O.
AKS PRECISION BALL POLSKA SP. Z O.O.
Manufacture of automotive bearings
Manufacture and sales of steel balls
Turkey
NSK RULMANLARI ORTA DOGU TIC. LTD. STI
(NSK BEARINGS MIDDLE EAST TRADING CO., LTD.)
100.0% Sales of industrial machinery bearings, etc.
South Africa
NSK SOUTH AFRICA (PTY) LTD.
100.0% Sales of industrial machinery bearings, etc.
ASIA
China
NSK (CHINA) INVESTMENT CO., LTD.
KUNSHAN NSK CO., LTD.
Control of Chinese subsidiaries and affiliates,
sales of bearings, etc.
Manufacture of automotive bearings, etc.
CHANGSHU NSK NEEDLE BEARING CO., LTD.
Manufacture of automotive bearings
NSK STEERING SYSTEMS DONGGUAN CO., LTD.
Manufacture of automotive components
ZHANGJIAGANG NSK PRECISION MACHINERY CO., LTD.
Manufacture of automotive bearing parts, etc.
SUZHOU NSK BEARINGS CO., LTD.
AKS PRECISION BALL (HANGZHOU) CO., LTD.
Manufacture of automotive bearings
Manufacture and sales of steel balls
NSK (CHINA) RESEARCH AND DEVELOPMENT CO., LTD.
Research and development of automotive bearings, etc.
NSK-YAGI PRECISION FORGING (ZHANGJIAGANG) CO., LTD.
Manufacture of automotive bearing parts, etc.
NSK-WANDA ELECTRIC POWER ASSISTED
STEERING SYSTEMS CO., LTD.
SHENYANG NSK PRECISION CO., LTD.
SHENYANG NSK CO., LTD.
HEFEI NSK CO., LTD.
90.0%
Manufacture of automotive components
Manufacture of precision machinery & parts
Manufacture of industrial machinery bearings
Manufacture of automotive bearings, etc.
Hong Kong
NSK HONG KONG LTD.
70.0% Sales of industrial machinery bearings, etc.
Taiwan
TAIWAN NSK PRECISION CO., LTD.
70.0% Sales of precision machinery & parts
Singapore
NSK ASEAN AND OCEANIA PTE. LTD.
Control of ASEAN and OCEANIA subsidiaries and affiliates
NSK INTERNATIONAL (SINGAPORE) PTE LTD.
Sales of industrial machinery bearings, etc.
NSK SINGAPORE (PRIVATE) LTD.
Sales of industrial machinery bearings, etc.
Indonesia
PT. NSK BEARINGS MANUFACTURING INDONESIA
Manufacture of automotive bearings, etc.
PT. NSK INDONESIA
Sales of industrial machinery bearings, etc.
PT. AKS PRECISION BALL INDONESIA
Manufacture and sales of steel balls
Thailand
NSK BEARINGS MANUFACTURING (THAILAND) CO., LTD.
Manufacture and sales of automotive bearings
SIAM NSK STEERING SYSTEMS CO., LTD.
Manufacture and sales of automotive components
NSK ASIA PACIFIC TECHNOLOGY CENTRE (THAILAND) CO., LTD.
Development of products, etc.
NSK BEARINGS (THAILAND) CO., LTD.
Sales of industrial machinery bearings, etc.
Malaysia
NSK BEARINGS (MALAYSIA) SDN. BHD.
NSK MICRO PRECISION (M) SDN. BHD.
ISC MICRO PRECISION SDN. BHD.
Sales of industrial machinery bearings, etc.
Manufacture of automotive bearings, etc.
Manufacture of automotive bearings, etc.
Vietnam
NSK VIETNAM CO., LTD.
100.0% Sales of industrial machinery bearings, etc.
Australia
NSK AUSTRALIA PTY. LTD.
100.0% Sales of industrial machinery bearings, etc.
New Zealand
NSK NEW ZEALAND LTD.
100.0% Sales of industrial machinery bearings, etc.
India
NSK INDIA SALES CO. PVT. LTD.
Sales of industrial machinery bearings, etc.
NSK BEARINGS MANUFACTURING INDIA PRIVATE LIMITED
Manufacture and sales of automotive bearings
RANE NSK STEERING SYSTEMS PRIVATE LTD.
Manufacture and sales of automotive components
South Korea
NSK KOREA CO., LTD.
100.0% Manufacture and sales of automotive bearings, etc.
95.5%
100.0%
100.0%
100.0%
100.0%
85.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
82.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
74.9%
74.9%
100.0%
49.0%
51.0%
100.0%
100.0%
100.0%
100.0%
51.0%
70
NSK REPORT 2017
NSK REPORT 2017
71
Manufacture of automotive components
95.5%
100.0%
100.0%
100.0%
100.0%
NSK STEERING SYSTEMS EUROPE (POLSKA) SP. Z O.O.
Manufacture of automotive bearings
Manufacture and sales of steel balls
Manufacture of automotive bearings, etc.
Sales of industrial machinery bearings, etc.
NSK NEEDLE BEARING POLAND SP. Z O.O.
AKS PRECISION BALL POLSKA SP. Z O.O.
Poland
NSK BEARINGS POLSKA S.A.
NSK POLSKA SP. Z O.O.
Region
Company name
Consolidated
Outline of business
equity
Region
Company name
Consolidated
equity
Outline of business
Japan
NSK STEERING SYSTEMS CO., LTD.
100.0%
Manufacture of automotive components
Netherlands
NSK EUROPEAN DISTRIBUTION CENTRE B.V.
100.0% Distribution service
Data Section
NSK Group
As of March 31, 2017
NSK MICRO PRECISION CO., LTD.
55.0%
Manufacture and sales of automotive bearings, etc.
NSK MICRO PRECISION CO., LTD. (NAGANO)
100.0%
Manufacture of automotive bearings, etc.
AMATSUJI STEEL BALL MFG. CO., LTD.
100.0%
Manufacture and sales of steel balls
AKS EAST JAPAN CO., LTD.
100.0%
Manufacture of steel balls
NSK KYUSHU CO., LTD.
ASAHI SEIKI CO., LTD.
NSK TOYAMA CO., LTD.
SHINWA SEIKO CO., LTD.
100.0%
Manufacture of precision machinery & parts
73.8%
Manufacture of industrial machinery bearing parts, etc.
100.0%
Manufacture of industrial machinery bearing parts
Manufacture of automotive bearing parts, etc.
KURIBAYASHI SEISAKUSHO CO., LTD.
Manufacture and sales of automotive bearing parts
NSK MACHINERY CO., LTD.
NSK REAL ESTATE CO., LTD.
100.0%
Manufacture of machine tools, etc.
100.0%
Real estate management and rental, etc.
NISSEI BLDG. MANAGEMENT LTD.
Management of Nissei Building
NSK-CHUGAI, LTD.
Insurance agent and sales of electrical components, etc.
NSK HUMAN RESOURCE SERVICES LTD.
100.0%
Consignment services for salary and welfare, education and recruitment
NSK LOGISTICS CO., LTD.
100.0%
Distribution service
NSK NETWORK AND SYSTEMS CO., LTD.
Design and development for computer systems, etc.
ADTECH CORPORATION
Research and development of automotive components
NSK OVERSEAS HOLDINGS CO., LTD.
100.0%
Holding company of subsidiaries
NSK-WARNER K.K.
CHITOSE SANGYO CO., LTD.
Manufacture and sales of automotive-related products
Manufacture of automotive-related products
INOUE JIKUUKE KOGYO CO., LTD.
Manufacture and sales of industrial machinery bearings
THE AMERICAS
U.S.A.
NSK AMERICAS, INC.
NSK CORPORATION
NSK PRECISION AMERICA, INC.
NSK LATIN AMERICA, INC.
Control of American subsidiaries and affiliates
Manufacture and sales of automotive bearings, etc.
Manufacture and sales of precision machinery & parts
Sales of industrial machinery bearings, etc.
NSK STEERING SYSTEMS AMERICA, INC.
Manufacture and sales of automotive components
NSK-AKS PRECISION BALL COMPANY
Manufacture and sales of steel balls
NSK CANADA INC.
100.0% Sales of industrial machinery bearings, etc.
NSK RODAMIENTOS MEXICANA, S.A. DE C.V.
Sales of industrial machinery bearings, etc.
NSK BEARINGS MANUFACTURING, MEXICO, S.A. DE C.V.
Manufacture of automotive bearings, etc.
Brazil
NSK BRASIL LTDA.
100.0% Manufacture and sales of industrial machinery bearings, etc.
Argentina
NSK ARGENTINA S.R.L.
100.0% Sales of industrial machinery bearings, etc.
Peru
NSK PERU S.A.C.
100.0% Sales support of industrial machinery bearings, etc.
Canada
Mexico
EUROPE
U.K.
NSK EUROPE LTD.
NSK UK LTD.
NSK BEARINGS EUROPE LTD.
NSK STEERING SYSTEMS EUROPE LTD.
NSK PRECISION UK LTD.
Germany
NSK EUROPA HOLDING GMBH
NSK DEUTSCHLAND GMBH
NEUWEG FERTIGUNG GMBH
Control of European subsidiaries and affiliates
Sales of industrial machinery bearings, etc.
Manufacture of automotive bearings, etc.
Manufacture of automotive components
Manufacture of precision machinery & parts
Holding company of subsidiaries in Germany
Sales of industrial machinery bearings, etc.
Manufacture of industrial machinery bearings
France
NSK FRANCE S.A.S.
100.0% Sales of industrial machinery bearings, etc.
Italy
Spain
NSK ITALIA S.P.A.
NSK SPAIN S.A.
100.0% Sales of industrial machinery bearings, etc.
100.0% Sales of industrial machinery bearings, etc.
82.4%
73.5%
70.0%
65.0%
100.0%
100.0%
50.0%
50.0%
40.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Turkey
NSK RULMANLARI ORTA DOGU TIC. LTD. STI
(NSK BEARINGS MIDDLE EAST TRADING CO., LTD.)
100.0% Sales of industrial machinery bearings, etc.
South Africa
NSK SOUTH AFRICA (PTY) LTD.
100.0% Sales of industrial machinery bearings, etc.
ASIA
China
NSK (CHINA) INVESTMENT CO., LTD.
KUNSHAN NSK CO., LTD.
CHANGSHU NSK NEEDLE BEARING CO., LTD.
NSK STEERING SYSTEMS DONGGUAN CO., LTD.
ZHANGJIAGANG NSK PRECISION MACHINERY CO., LTD.
SUZHOU NSK BEARINGS CO., LTD.
AKS PRECISION BALL (HANGZHOU) CO., LTD.
NSK (CHINA) RESEARCH AND DEVELOPMENT CO., LTD.
NSK-WANDA ELECTRIC POWER ASSISTED
STEERING SYSTEMS CO., LTD.
NSK-YAGI PRECISION FORGING (ZHANGJIAGANG) CO., LTD.
SHENYANG NSK PRECISION CO., LTD.
SHENYANG NSK CO., LTD.
HEFEI NSK CO., LTD.
100.0%
85.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Control of Chinese subsidiaries and affiliates,
sales of bearings, etc.
Manufacture of automotive bearings, etc.
Manufacture of automotive bearings
Manufacture of automotive components
Manufacture of automotive bearing parts, etc.
Manufacture of automotive bearings
Manufacture and sales of steel balls
Research and development of automotive bearings, etc.
90.0%
Manufacture of automotive components
82.0%
100.0%
100.0%
100.0%
Manufacture of automotive bearing parts, etc.
Manufacture of precision machinery & parts
Manufacture of industrial machinery bearings
Manufacture of automotive bearings, etc.
Hong Kong
NSK HONG KONG LTD.
70.0% Sales of industrial machinery bearings, etc.
Taiwan
TAIWAN NSK PRECISION CO., LTD.
70.0% Sales of precision machinery & parts
Singapore
NSK ASEAN AND OCEANIA PTE. LTD.
NSK INTERNATIONAL (SINGAPORE) PTE LTD.
NSK SINGAPORE (PRIVATE) LTD.
Indonesia
PT. NSK BEARINGS MANUFACTURING INDONESIA
PT. NSK INDONESIA
PT. AKS PRECISION BALL INDONESIA
Thailand
NSK BEARINGS MANUFACTURING (THAILAND) CO., LTD.
SIAM NSK STEERING SYSTEMS CO., LTD.
NSK ASIA PACIFIC TECHNOLOGY CENTRE (THAILAND) CO., LTD.
NSK BEARINGS (THAILAND) CO., LTD.
Malaysia
NSK BEARINGS (MALAYSIA) SDN. BHD.
NSK MICRO PRECISION (M) SDN. BHD.
ISC MICRO PRECISION SDN. BHD.
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
74.9%
74.9%
100.0%
49.0%
51.0%
100.0%
100.0%
Control of ASEAN and OCEANIA subsidiaries and affiliates
Sales of industrial machinery bearings, etc.
Sales of industrial machinery bearings, etc.
Manufacture of automotive bearings, etc.
Sales of industrial machinery bearings, etc.
Manufacture and sales of steel balls
Manufacture and sales of automotive bearings
Manufacture and sales of automotive components
Development of products, etc.
Sales of industrial machinery bearings, etc.
Sales of industrial machinery bearings, etc.
Manufacture of automotive bearings, etc.
Manufacture of automotive bearings, etc.
AKS PRECISION BALL EUROPE LTD.
Manufacture and sales of steel balls
Vietnam
NSK VIETNAM CO., LTD.
100.0% Sales of industrial machinery bearings, etc.
Australia
NSK AUSTRALIA PTY. LTD.
100.0% Sales of industrial machinery bearings, etc.
New Zealand
NSK NEW ZEALAND LTD.
100.0% Sales of industrial machinery bearings, etc.
India
NSK INDIA SALES CO. PVT. LTD.
NSK BEARINGS MANUFACTURING INDIA PRIVATE LIMITED
RANE NSK STEERING SYSTEMS PRIVATE LTD.
100.0%
100.0%
51.0%
Sales of industrial machinery bearings, etc.
Manufacture and sales of automotive bearings
Manufacture and sales of automotive components
South Korea
NSK KOREA CO., LTD.
100.0% Manufacture and sales of automotive bearings, etc.
70
NSK REPORT 2017
NSK REPORT 2017
71
Data Section
Information for Investors / Company Data
As of March 31, 2017
Corporate Address
NSK Ltd.
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
Tokyo 141-8560, Japan
Tel: +81-3-3779-7111
Fax: +81-3-3779-7431
Contact Information
For questions or additional information, please contact:
IR Office, NSK Ltd.
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
Tokyo 141-8560, Japan
Tel: +81-3-5487-2564 Fax: +81-3-3779-7442
E-mail: ir@nsk.com
NSK’s Website
▶ http://www.nsk.com/
Annual Meeting of Shareholders
The Annual Meeting of Shareholders was held on June 23, 2017.
Common Stock
Authorized: 1,700,000,000 shares
Issued: 551,268,104 shares (Treasury shares: 20,352,518)
Number of Shareholders
25,325
Other Information Concerning the Company
IR-Related Information
http://www.nsk.com/investors/
Further Financial Information
http://www.nsk.com/investors/library/financial_
announcement.html
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan
Listing
Tokyo
Security Code
6471
Breakdown of Shareholders (Thousand shares)
■ Financial Institutions...276,226
■ Securities Companies ...13,080
■ Other Japanese Corporations...48,989
■ Foreign Investors.... 139,304
■ Individuals / Others... 53,314
10.04%
26.24%
Total
530,915
thousand shares
(excluding treasury shares)
9.23%
2.46%
CSR-Related Information
Please refer to the Company’s CSR
website and CSR Report for more
details on CSR activities and other
related information.
http://www.nsk.com/sustainability/
52.03%
Third-Party Assurances
CSR Report 2017
CSR Report 2017
Highly Evaluated by Outside Agencies (SRI/ESG)
NSK Report 2016
Over and above their financial aspects, companies that merit high evaluations
for their environmental and social contributions are being recognized for their
promise of long-term sustainable growth. These companies are also attracting
interest from a socially responsible investment (SRI) perspective while forging
an increasingly important presence among a wide range of institutional
investors. Acknowledged for its integrity, NSK has been included in the following
internationally recognized SRI/ESG indices as of September 2017.
NSK Report 2016, which NSK issued as an
integrated report for the first time last year,
was recognized with a best integrated reporting
award at the 4th WICI Japan Award for
Excellence in Integrated Reporting. This was
the first time that NSK had won this award.
http://www.sustainability-
indices.com/
http://www.ftse.com/products
/indices/FTSE4Good
http:/www.ftse.com/products/
indices/blossom-japan
http://forumethibel.org/content
/ethibel_sustainability_index.html
http://www.vigeo-eiris.com/
http://www.oekom-research.com
/index_en.php?content=methodik
http://www.morningstar.
co.jp/sri/about.htm
NSK Report 2016
TOPICS
Establishment of NSK Scholarship Foundation
Taking the opportunity presented by the 100th anniversary of NSK’s founding in
November 2016 while bearing in mind the various issues the world is facing,
we established the NSK Scholarship Foundation with the aim of supporting the
development of advanced human resources that will contribute to solving those
issues. The Foundation has established the following two programs.
1
2
A program to assist Japanese exchange students who have a
strong desire to play a significant role in the international arena
and contribute to the world and who wish to study abroad at
research institutions and graduate schools
A program to assist Asian exchange students who wish to study
science and technology at Japanese graduate schools with the
aim of contributing to progress in those fields
Having established the Scholarship Foundation, NSK will continue to
Founding Prospectus
support next-generation human resource development.
To ensure the reliability and accuracy of NSK
Report 2017 as an integrated report, NSK
obtained assurances from an external third
party for the following data information
described in this report.
Items Subject to Assurance
● Lost-Worktime Injury Rate (P. 45)
● Greenhouse Gases Emissions (P. 46)
● Total Waste (Japan) (P. 46)
● Water Consumption (P. 46)
● VOC Emissions (P. 46)
(cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076)
No.1811002939
Greenhouse Gas Emissions
Verification Report
To: NSK Ltd.
1. Objective and Scope
(cid:16076)
(cid:16076)
the Company.
and its controls.
3. Conclusion
accordance with the Rule.
4. Consideration
Japan Quality Assurance Organization (hereafter JQA) was engaged by NSK Ltd. (hereafter “NSK”) to provide an independent
verification on “FY2016* NSK Group GHG emission calculation report” (hereafter “the Report”). The content of our
verification was to express our conclusion, based on our verification procedures, on whether the statement of information
regarding the FY2016 GHG emissions in the Report was correctly measured and calculated, in accordance with the “NSK
Group GHG emission calculation standard (Ver.02-01, as of May 31, 2017)” (hereafter the Rule). The purpose of the
verification is to evaluate the Report objectively and to enhance the credibility of the Report.
*The fiscal year of NSK Ltd. ended on March 31, 2017.
2. Procedures Performed
JQA conducted verification in accordance with “ISO 14064-3”. The scope of this verification assignment covers
energy-derived CO2 emissions from Scope 1 and 2. The verification was conducted to a limited level of assurance and
quantitative materiality was set at 5 percent of the total emissions in the Report. The organizational boundaries of this
verification cover all NSK Group sites in Japan and overseas, including production sites, technology centers and non-production
sites of NSK Ltd., NSK equity affiliates* and NSK brand producing companies.
* NSK equity affiliates which 50 percent or more of the voting stock is owned by NSK.
Our verification procedures included:
Visiting NSK Head offices to perform validation to check the Rule prior to the Site Visit.
Visiting five domestic sites: NSK Head offices, NSK Ltd. Fukushima Plant, NSK Ltd. Mid-Japan Automotive
Department, Shinwa Seiko Co., Ltd. Shin-Asahi Plant, Inoue Jikuuke Kogyo. Co., Ltd. Tondabayashi Plant, selected by
On-site assessment to check the report boundaries, GHG sources, Monitoring points, Monitoring and Calculation system
Vouching: Cross-checking the GHG emissions data against evidence for all sampling site.
Based on the procedures described above, nothing has come to attention that caused us to believe that the statement of the
information regarding NSK’s FY2016 GHG emissions in the Report is not materially correct, or has not been prepared in
NSK was responsible for preparing the Report, and JQA’s responsibility was to conduct verification of Greenhouse gas in the
Report only. There is no conflict of interest between NSK and JQA.
Tadayuki Yano, Board Director
For and on behalf of Japan Quality Assurance Organization
1-25, Kandasudacho, Chiyoda-ku, Tokyo, Japan
June 28, 2017
Independent Assurance Statement
September 6, 2017
Mr. Toshihiro Uchiyama
President & CEO
NSK Ltd.
1. Purpose
We, Sustainability Accounting Co., Ltd., have been engaged by NSK Ltd. (“the Company”) to
provide limited assurance on the Company's Global Lost-Worktime Injury Rate, Global Water
Consumption, Total Waste (Japan), and VOC Emissions (Japan) which were 0.68, 4,716
thousand m3, 106 thousand tons, and 85.8 tons, respectively for FY 2016 (“the performance
data”). The purpose of this process is to express our conclusion on whether the performance
data were calculated in accordance with the Company’s standards. The Company's management
is responsible for calculating the performance data. Our responsibility is to independently carry
out a limited assurance engagement and to express our assurance conclusion.
2. Procedures Performed
Our assurance engagement has been planned and performed in accordance with International
Interviewing the Company’s responsible personnel to understand the Company’s
Standard on Assurance Engagement 3000 (ISAE3000).
The key procedures we carried out included:
standards
Reviewing the Company’s standards
Performing cross-checks on a sample basis and performing a recalculation to
determine whether the performance data were calculated in accordance with the
Company’s standards.
3. Conclusion
the Company’s standards.
Based on the procedures performed, nothing has come to our attention that causes us to believe
that the performance data have not been calculated, in all material respects, in accordance with
We have no conflict of interest relationships with the Company.
Takashi Fukushima
Representative Director
Sustainability Accounting Co., Ltd.
Greenhouse Gas Emissions Verification Report
Independent Assurance Statement
At the Time of Publishing NSK Report 2017
Last year, NSK celebrated its 100th anniversary and published an
consideration to NSK’s value creation framework and future, and
integrated report, NSK Report 2016, for the first time. Having
jointly worked on the report. As the executive officer responsible for
reached the 100-year milestone, we focused on providing detailed
the creation of this report, I expressly stated that the preparation
information to help stakeholders gain a better understanding of
process be valid and that the information contained be accurate.
NSK’s value creation process. We also touched on NSK Vision
In the years to come, NSK will work to enrich the NSK Report,
2026, which represents the form NSK wants to reach in 10 years’
which summarizes financial information and non-financial
time.
information, and will use it as one of its tools for dialogue with
For NSK Report 2017, we showcase specific examples of
NSK’s value creation process, remain aware of the need to show
the relationships between various stakeholders and NSK creation
value, and review the description of CSR/ESG management. We
stakeholders. I would be
delighted to be able to receive
the frank views and requests
from everyone who reads this
also provide a taste of the progress made in addressing issues and
report.
the direction in which we are aiming through the executive
interview that covers the global business platform that underpins
NSK’s growth.
For this report, not only the members of the departments in
charge but also various involved parties working together gave
Vice President
Deputy Head of
Finance Division Headquarters
Responsible for IR
Kenichi Yamana
72
NSK REPORT 2017
NSK REPORT 2017
73
Information for Investors / Company Data
For questions or additional information, please contact:
6471
Data Section
As of March 31, 2017
Corporate Address
NSK Ltd.
Tokyo 141-8560, Japan
Tel: +81-3-3779-7111
Fax: +81-3-3779-7431
Contact Information
IR Office, NSK Ltd.
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
Tokyo 141-8560, Japan
Tel: +81-3-5487-2564 Fax: +81-3-3779-7442
E-mail: ir@nsk.com
NSK’s Website
▶ http://www.nsk.com/
Annual Meeting of Shareholders
The Annual Meeting of Shareholders was held on June 23, 2017.
Common Stock
Authorized: 1,700,000,000 shares
Issued: 551,268,104 shares (Treasury shares: 20,352,518)
Number of Shareholders
25,325
Other Information Concerning the Company
IR-Related Information
http://www.nsk.com/investors/
Further Financial Information
http://www.nsk.com/investors/library/financial_
announcement.html
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan
Listing
Tokyo
Security Code
Breakdown of Shareholders (Thousand shares)
■ Financial Institutions...276,226
■ Securities Companies ...13,080
■ Foreign Investors.... 139,304
■ Individuals / Others... 53,314
■ Other Japanese Corporations...48,989
10.04%
Total
530,915
thousand shares
(excluding treasury shares)
26.24%
52.03%
9.23%
2.46%
CSR-Related Information
Please refer to the Company’s CSR
website and CSR Report for more
details on CSR activities and other
related information.
http://www.nsk.com/sustainability/
CSR Report 2017
CSR Report 2017
Highly Evaluated by Outside Agencies (SRI/ESG)
NSK Report 2016
Over and above their financial aspects, companies that merit high evaluations
for their environmental and social contributions are being recognized for their
NSK Report 2016, which NSK issued as an
integrated report for the first time last year,
promise of long-term sustainable growth. These companies are also attracting
was recognized with a best integrated reporting
interest from a socially responsible investment (SRI) perspective while forging
award at the 4th WICI Japan Award for
an increasingly important presence among a wide range of institutional
Excellence in Integrated Reporting. This was
investors. Acknowledged for its integrity, NSK has been included in the following
the first time that NSK had won this award.
internationally recognized SRI/ESG indices as of September 2017.
http://www.sustainability-
http://www.ftse.com/products
http:/www.ftse.com/products/
indices.com/
/indices/FTSE4Good
indices/blossom-japan
http://forumethibel.org/content
/ethibel_sustainability_index.html
http://www.vigeo-eiris.com/
http://www.oekom-research.com
http://www.morningstar.
/index_en.php?content=methodik
co.jp/sri/about.htm
NSK Report 2016
TOPICS
Establishment of NSK Scholarship Foundation
Taking the opportunity presented by the 100th anniversary of NSK’s founding in
November 2016 while bearing in mind the various issues the world is facing,
we established the NSK Scholarship Foundation with the aim of supporting the
development of advanced human resources that will contribute to solving those
issues. The Foundation has established the following two programs.
1
2
A program to assist Japanese exchange students who have a
strong desire to play a significant role in the international arena
and contribute to the world and who wish to study abroad at
research institutions and graduate schools
A program to assist Asian exchange students who wish to study
science and technology at Japanese graduate schools with the
aim of contributing to progress in those fields
Having established the Scholarship Foundation, NSK will continue to
support next-generation human resource development.
Founding Prospectus
Third-Party Assurances
To ensure the reliability and accuracy of NSK
Report 2017 as an integrated report, NSK
obtained assurances from an external third
party for the following data information
described in this report.
Items Subject to Assurance
● Lost-Worktime Injury Rate (P. 45)
● Greenhouse Gases Emissions (P. 46)
● Total Waste (Japan) (P. 46)
● Water Consumption (P. 46)
● VOC Emissions (P. 46)
(cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076) (cid:16076)
No.1811002939
Greenhouse Gas Emissions
Verification Report
To: NSK Ltd.
1. Objective and Scope
Japan Quality Assurance Organization (hereafter JQA) was engaged by NSK Ltd. (hereafter “NSK”) to provide an independent
verification on “FY2016* NSK Group GHG emission calculation report” (hereafter “the Report”). The content of our
verification was to express our conclusion, based on our verification procedures, on whether the statement of information
regarding the FY2016 GHG emissions in the Report was correctly measured and calculated, in accordance with the “NSK
Group GHG emission calculation standard (Ver.02-01, as of May 31, 2017)” (hereafter the Rule). The purpose of the
verification is to evaluate the Report objectively and to enhance the credibility of the Report.
*The fiscal year of NSK Ltd. ended on March 31, 2017.
(cid:16076)
2. Procedures Performed
JQA conducted verification in accordance with “ISO 14064-3”. The scope of this verification assignment covers
energy-derived CO2 emissions from Scope 1 and 2. The verification was conducted to a limited level of assurance and
quantitative materiality was set at 5 percent of the total emissions in the Report. The organizational boundaries of this
verification cover all NSK Group sites in Japan and overseas, including production sites, technology centers and non-production
sites of NSK Ltd., NSK equity affiliates* and NSK brand producing companies.
* NSK equity affiliates which 50 percent or more of the voting stock is owned by NSK.
Our verification procedures included:
Visiting NSK Head offices to perform validation to check the Rule prior to the Site Visit.
Visiting five domestic sites: NSK Head offices, NSK Ltd. Fukushima Plant, NSK Ltd. Mid-Japan Automotive
Department, Shinwa Seiko Co., Ltd. Shin-Asahi Plant, Inoue Jikuuke Kogyo. Co., Ltd. Tondabayashi Plant, selected by
the Company.
On-site assessment to check the report boundaries, GHG sources, Monitoring points, Monitoring and Calculation system
and its controls.
Vouching: Cross-checking the GHG emissions data against evidence for all sampling site.
3. Conclusion
Based on the procedures described above, nothing has come to attention that caused us to believe that the statement of the
information regarding NSK’s FY2016 GHG emissions in the Report is not materially correct, or has not been prepared in
accordance with the Rule.
(cid:16076)
4. Consideration
NSK was responsible for preparing the Report, and JQA’s responsibility was to conduct verification of Greenhouse gas in the
Report only. There is no conflict of interest between NSK and JQA.
Tadayuki Yano, Board Director
For and on behalf of Japan Quality Assurance Organization
1-25, Kandasudacho, Chiyoda-ku, Tokyo, Japan
June 28, 2017
Independent Assurance Statement
September 6, 2017
Mr. Toshihiro Uchiyama
President & CEO
NSK Ltd.
1. Purpose
We, Sustainability Accounting Co., Ltd., have been engaged by NSK Ltd. (“the Company”) to
provide limited assurance on the Company's Global Lost-Worktime Injury Rate, Global Water
Consumption, Total Waste (Japan), and VOC Emissions (Japan) which were 0.68, 4,716
thousand m3, 106 thousand tons, and 85.8 tons, respectively for FY 2016 (“the performance
data”). The purpose of this process is to express our conclusion on whether the performance
data were calculated in accordance with the Company’s standards. The Company's management
is responsible for calculating the performance data. Our responsibility is to independently carry
out a limited assurance engagement and to express our assurance conclusion.
2. Procedures Performed
Our assurance engagement has been planned and performed in accordance with International
Standard on Assurance Engagement 3000 (ISAE3000).
The key procedures we carried out included:
Interviewing the Company’s responsible personnel to understand the Company’s
standards
Reviewing the Company’s standards
Performing cross-checks on a sample basis and performing a recalculation to
determine whether the performance data were calculated in accordance with the
Company’s standards.
3. Conclusion
Based on the procedures performed, nothing has come to our attention that causes us to believe
that the performance data have not been calculated, in all material respects, in accordance with
the Company’s standards.
We have no conflict of interest relationships with the Company.
Takashi Fukushima
Representative Director
Sustainability Accounting Co., Ltd.
Greenhouse Gas Emissions Verification Report
Independent Assurance Statement
At the Time of Publishing NSK Report 2017
Last year, NSK celebrated its 100th anniversary and published an
integrated report, NSK Report 2016, for the first time. Having
reached the 100-year milestone, we focused on providing detailed
information to help stakeholders gain a better understanding of
NSK’s value creation process. We also touched on NSK Vision
2026, which represents the form NSK wants to reach in 10 years’
time.
For NSK Report 2017, we showcase specific examples of
NSK’s value creation process, remain aware of the need to show
the relationships between various stakeholders and NSK creation
value, and review the description of CSR/ESG management. We
also provide a taste of the progress made in addressing issues and
the direction in which we are aiming through the executive
interview that covers the global business platform that underpins
NSK’s growth.
For this report, not only the members of the departments in
charge but also various involved parties working together gave
consideration to NSK’s value creation framework and future, and
jointly worked on the report. As the executive officer responsible for
the creation of this report, I expressly stated that the preparation
process be valid and that the information contained be accurate.
In the years to come, NSK will work to enrich the NSK Report,
which summarizes financial information and non-financial
information, and will use it as one of its tools for dialogue with
stakeholders. I would be
delighted to be able to receive
the frank views and requests
from everyone who reads this
report.
Vice President
Deputy Head of
Finance Division Headquarters
Responsible for IR
Kenichi Yamana
72
NSK REPORT 2017
NSK REPORT 2017
73
NSK REPORT 2017
Year ended March 31, 2017
Integrated Report
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K
R
E
P
O
R
T
2
0
1
7
NSK used environmentally friendly paper and printing methods for this publication.
CAT. No. E8410 2017 AX-10 Printed in Japan ©NSK Ltd. 2017