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NSK REPORT 2018
Year ended March 31, 2018
Integrated Report
NSK used environmentally friendly paper and printing methods for this publication.
CAT. No. E8411 2018 B-10 Printed in Japan @NSK Ltd. 2018
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.
The NSK Vision 2026: Setting the Future in Motion is an expression of our commitment to uncovering the needs of
society and leading the world in bringing motion to life. As we set the future in motion, we aim to be a company that
continually creates and provides value.
NSK Report 2018 Editorial Policy
The NSK Report 2018 is designed to provide all stakeholders with a deeper understanding
of the Company’s creation of value over the medium to long term by providing a
comprehensive picture of our business, our value creation story, strategies and outcomes
related to the creation of corporate value, and our underlying strengths in supporting
corporate value.
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 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) as well as the Guidance for
Collaborative Value Creation formulated by Japan’s Ministry of Economy, Trade and Industry.
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 several factors could cause actual results to
differ materially from those discussed in forward-looking statements.
This document is an English translation of NSK Report 2018 dated September 20th, 2018, 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 20th,
2018. 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.
NSK Report 2018
CONTENTS
Complete Picture and
Value Creation Story
of NSK
Performance and
Strategies of
Corporate Value Creation
The Underlying Strength
of Corporate Value
26
27
28
30
Looking Back on Past
Mid-Term Management Plans
Outline of the Fifth Mid-Term
Management Plan
Progress of Mid-Term
Management Plan
Review of Operations
30 Industrial Machinery Business
34 Automotive Business
38
Financial Strategy /
Policy on Shareholder Returns
02
04
10
14
16
NSK’s History of Creating Value
To Our Stakeholders
Corporate Value Creation Model
NSK’s Business Activities and
Corporate Value Creation
Feature
SETTING THE FUTURE IN MOTION
16
1
20
2
NSK Value Creation for
Technological Innovation
in Automobiles
̶Change as a Chance to Soar
NSK's Vision 2026 Initiatives
̶Efforts to Set the Future in
Motion Underway Around
the World
22
Financial and Non-Financial
Highlights
40
44
46
Core Technologies and Taking Up the
Challenge of Creating New Value
40 NSK’s Four Core Technologies
Interview with NSK’s Head of
41
Technology
Global Business Foundation
CSR/ESG Management
46 NSK’s Approach: CSR in
Corporate Value Creation
48 Quality Management
49 Safety Management
50 Environmental Management
52 Human Resource Management
54 Supply Chain Management
55 Corporate Governance
59 Compliance
60 Dialogue with Shareholders
and Investors
62
Management
Data Section
64
68
70
72
74
76
77
Consolidated Financial
Statements
Management’s Discussion and
Analysis of Financial Position,
Results of Operations and
Cash Flows
Basic Knowledge of Bearings
Glossary
NSK Group
Information for Investors /
Company Data
Third-Party Assurances
Highly Evaluated by Outside Agencies (SRI/ESG)
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 2018.
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
http://www.morningstar.
/index_en.php?content=methodik
co.jp/sri/about.htm
NSK REPORT 2018
01
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.
The NSK Vision 2026: Setting the Future in Motion is an expression of our commitment to uncovering the needs of
society and leading the world in bringing motion to life. As we set the future in motion, we aim to be a company that
continually creates and provides value.
NSK Report 2018 Editorial Policy
The NSK Report 2018 is designed to provide all stakeholders with a deeper understanding
of the Company’s creation of value over the medium to long term by providing a
comprehensive picture of our business, our value creation story, strategies and outcomes
related to the creation of corporate value, and our underlying strengths in supporting
corporate value.
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 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) as well as the Guidance for
Collaborative Value Creation formulated by Japan’s Ministry of Economy, Trade and Industry.
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 several factors could cause actual results to
differ materially from those discussed in forward-looking statements.
This document is an English translation of NSK Report 2018 dated September 20th, 2018, 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 20th,
2018. 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.
NSK Report 2018
CONTENTS
Complete Picture and
Value Creation Story
Performance and
Strategies of
of NSK
Corporate Value Creation
The Underlying Strength
of Corporate Value
NSK’s History of Creating Value
Looking Back on Past
Mid-Term Management Plans
40
Core Technologies and Taking Up the
Challenge of Creating New Value
26
27
28
30
Outline of the Fifth Mid-Term
Management Plan
Progress of Mid-Term
Management Plan
Review of Operations
30 Industrial Machinery Business
34 Automotive Business
44
46
38
Financial Strategy /
Policy on Shareholder Returns
02
04
10
14
16
To Our Stakeholders
Corporate Value Creation Model
NSK’s Business Activities and
Corporate Value Creation
Feature
SETTING THE FUTURE IN MOTION
16
1
NSK Value Creation for
Technological Innovation
in Automobiles
̶Change as a Chance to Soar
20
2
NSK's Vision 2026 Initiatives
̶Efforts to Set the Future in
Motion Underway Around
the World
22
Financial and Non-Financial
Highlights
40 NSK’s Four Core Technologies
41
Interview with NSK’s Head of
Technology
Global Business Foundation
CSR/ESG Management
46 NSK’s Approach: CSR in
Corporate Value Creation
48 Quality Management
49 Safety Management
50 Environmental Management
52 Human Resource Management
54 Supply Chain Management
55 Corporate Governance
59 Compliance
60 Dialogue with Shareholders
and Investors
62
Management
Data Section
64
68
70
72
74
76
77
Consolidated Financial
Statements
Management’s Discussion and
Analysis of Financial Position,
Results of Operations and
Cash Flows
Basic Knowledge of Bearings
Glossary
NSK Group
Information for Investors /
Company Data
Third-Party Assurances
Highly Evaluated by Outside Agencies (SRI/ESG)
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 2018.
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 2018
01
Complete Picture and Value Creation Story of NSK
NSK’s History of Creating Value
Since NSK’s start as Japan’s first bearing maker in 1916, we’ve challenged ourselves to develop innovative technologies
for over 100 years. Over time, we’ve produced new value in many areas.
NSK’s mission statement guides us to “contribute to a safer, smoother society,” “help protect the global
environment,” and “work across national boundaries.” Put simply, we aim to support society through our work. As such,
we’ve played a role in developing various industries and have grown as a corporation.
As industries have matured in Japan and across the world, bearing applications have also grown and changed. For example, military uses
accounted for most bearing needs before and during World War II. After the war, social development in Japan was supported by domestic
demand for machinery and equipment. With this change, bearings were needed everywhere. Fabric spinning machines supported Japan’s
post-war economy. Meanwhile, rolling stock and steel aided in Japan’s economic recovery. Home appliances and automobiles drove high
economic growth, while Japan’s manufacturing strength advanced thanks to machine tools and semiconductor production equipment. We began
to play a role in these and other industries, and we continue to expand our businesses today. Now, we offer a wide product lineup including linear
motion products, mechatronics, and steering and automatic transmission components based on our refined bearing technologies.
Japan’s First-Ever Bearings
First in Japan to mass produce bearings needed for industrial development
Just before NSK Ltd. was founded in 1916, prototype angular contact ball bearings were
completed by NSK’s predecessor Nippon Seiko Limited Partnership Company in 1915.
These were the very first bearings to be produced in Japan. Bearings are said to be a key
machinery component alongside screws and gears. Now, rotating machinery components
could be supported by a Japan-made bearing prototype for the first time. The subsequent
launch of NSK in 1916 led to the mass production of bearings.
Ball Screw
Steering Gears
Ball Screws
for Machine Tools
Helping make automobiles safer and machine tools more sophisticated
While rolling motion in machines was realized through rolling bearings, commercial applications
also grew. NSK developed ball screw steering gears in 1958 and ball screws for machine tools
in 1959, marking an expansion of our non-bearing product lines and businesses. By starting the
steering gear business, we could expand into steering components such as steering columns,
universal joints, and R&P gears. In turn, these advancements have led to a dramatic expansion of
electric power steering (EPS) in recent years. Through these efforts, we help make automobiles
safer. In addition, products such as ball screws and linear guides help with precise positioning.
XY tables and MONOCARRIERTM units that combine a ball screw and linear guide have become
sophisticated, high-value solutions. All of these precision machinery components are
crucial for machine tools, also known as the mother machines for manufacturing
industries, and semiconductor/LCD manufacturing equipment.
Bearings in the 0 Series Shinkansen (Bullet Train)
Expanding overseas high-speed rail via essential technology
Rolling stock bearings were the first to enter full-scale production at NSK after World War II.
They were needed for the axles, main motors, and transmissions for the then-named
Japanese National Railways and private regional railways. The world-renowned Japanese
Shinkansen (bullet train) commenced operations on October 1, 1964, just before the Tokyo
Olympics. A year earlier in 1963, the Shinkansen set a speed record of 256 km/h, with NSK
lending its support to the project from the development stage. For more than 50 years since
the rollout of the initial 0 Series, NSK bearings have been used in all Shinkansen models and
have helped maintain safe and comfortable rail travel. We have honed our technologies via the
Shinkansen to be faster, more compact, lighter, and more durable. Based on our track record,
we have expanded businesses to include high-speed railways in China and South Korea, as
well as the TGV in France.
Net Sales for NSK Over Time
Photo provided by
Central Japan Railway Company
Fiscal 1960
¥10 billion
Fiscal 1974
¥100 billion
Using units to make vehicles lighter and improve workability
HUB Ⅲ Development
The shift to units has progressed dramatically thanks to the rapid spread of
front-wheel-drive vehicles since the start of the 1980s. Units help make vehicles more
compact, lighter, and easier to assemble. HUB Ⅲ (third-generation hub unit bearings)
units are equipped with dual flanges that can be mounted to brake rotors, wheels, and
the vehicle chassis itself. These kind of units initially took hold in the U.S., so NSK first
developed and commercialized HUB Ⅲ for American customers. With success, we later
expanded this business to Japanese and European automobiles. NSK then improved
HUB Ⅲ with high-performance seals, low-torque bearings, lower vibration during
braking, lighter weight, and sophisticated ABS sensors. In addition, we established
overseas production facilities to tackle our global expansion. We currently supply
products to major global automakers from 10 factories in nine countries.
Large Wind Turbine Bearings
Using analysis technology and material engineering to
increase wind turbine output, turbine size, and offshore applications
NSK’s purchase of U.K. bearing maker UPI in 1990 gave us a foothold in the
conservative European market. Since then, NSK has put great value on European
industrial machinery manufacturers who have extended their businesses on a global
scale. We’re worked to strengthen ties with these manufacturers with the aim of sales
expansion. Many big players in wind turbines were based in Europe where wind power
was spreading as an effective form of renewable energy. However, durability was an
issue amid the trend toward higher output, larger machines, and offshore facilities.
Seizing this opportunity, we used our highly rated advanced analysis technologies to
launch into this market. We solved the durability issue by proposing optimal
combinations of higher durability materials with different types of extra large bearings.
Through our efforts, we gained the trust of the European wind turbine market and
expanded this business worldwide.
Half-Toroidal CVTs
Overcoming two decades of difficulties to achieve high-efficiency CVTs
Continuously variable transmissions (CVTs) and step ATs are just two of several types of automobile
automatic transmissions. In particular, step ATs have driven NSK’s growth in the Automotive Business.
We started developing half-toroidal CVTs in 1978. By overcoming many difficulties over 20 years, we
became the first and only manufacturer in the world to produce these items in 1999. A key technical
hurdle was how to efficiently control power transmission between the power rollers and disks in these
CVTs. To solve this, we used products that leveraged the science of tribology, which forms the
technological basis for bearings. Commercializing CVTs involved joint development with customers
focused on vehicle installation. At the same time, we worked to solve many development issues
together with business partners including traction oil makers and steel suppliers. Although the mass
production of vehicles using NSK CVTs has finished, lately the technology has gained attention again.
Many customers are focusing on EV (electric vehicle) deceleration mechanisms* based on this
technology’s efficient power transfer functionality.
* Please see P. 19 for more details on EV deceleration mechanisms (Traction Reducer).
Fiscal 2000
¥500 billion
Fiscal 2017
¥1trillion
1916
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2017 (FY)
02
NSK REPORT 2018
NSK REPORT 2018
03
1915195919991987199919631958 Complete Picture and Value Creation Story of NSK
NSK’s History of Creating Value
Since NSK’s start as Japan’s first bearing maker in 1916, we’ve challenged ourselves to develop innovative technologies
for over 100 years. Over time, we’ve produced new value in many areas.
NSK’s mission statement guides us to “contribute to a safer, smoother society,” “help protect the global
environment,” and “work across national boundaries.” Put simply, we aim to support society through our work. As such,
we’ve played a role in developing various industries and have grown as a corporation.
As industries have matured in Japan and across the world, bearing applications have also grown and changed. For example, military uses
accounted for most bearing needs before and during World War II. After the war, social development in Japan was supported by domestic
demand for machinery and equipment. With this change, bearings were needed everywhere. Fabric spinning machines supported Japan’s
post-war economy. Meanwhile, rolling stock and steel aided in Japan’s economic recovery. Home appliances and automobiles drove high
economic growth, while Japan’s manufacturing strength advanced thanks to machine tools and semiconductor production equipment. We began
to play a role in these and other industries, and we continue to expand our businesses today. Now, we offer a wide product lineup including linear
motion products, mechatronics, and steering and automatic transmission components based on our refined bearing technologies.
Japan’s First-Ever Bearings
First in Japan to mass produce bearings needed for industrial development
Just before NSK Ltd. was founded in 1916, prototype angular contact ball bearings were
completed by NSK’s predecessor Nippon Seiko Limited Partnership Company in 1915.
These were the very first bearings to be produced in Japan. Bearings are said to be a key
machinery component alongside screws and gears. Now, rotating machinery components
could be supported by a Japan-made bearing prototype for the first time. The subsequent
launch of NSK in 1916 led to the mass production of bearings.
Ball Screw
Steering Gears
Ball Screws
for Machine Tools
Helping make automobiles safer and machine tools more sophisticated
While rolling motion in machines was realized through rolling bearings, commercial applications
also grew. NSK developed ball screw steering gears in 1958 and ball screws for machine tools
in 1959, marking an expansion of our non-bearing product lines and businesses. By starting the
steering gear business, we could expand into steering components such as steering columns,
universal joints, and R&P gears. In turn, these advancements have led to a dramatic expansion of
electric power steering (EPS) in recent years. Through these efforts, we help make automobiles
safer. In addition, products such as ball screws and linear guides help with precise positioning.
XY tables and MONOCARRIERTM units that combine a ball screw and linear guide have become
sophisticated, high-value solutions. All of these precision machinery components are
crucial for machine tools, also known as the mother machines for manufacturing
industries, and semiconductor/LCD manufacturing equipment.
HUB Ⅲ Development
Using units to make vehicles lighter and improve workability
The shift to units has progressed dramatically thanks to the rapid spread of
front-wheel-drive vehicles since the start of the 1980s. Units help make vehicles more
compact, lighter, and easier to assemble. HUB Ⅲ (third-generation hub unit bearings)
units are equipped with dual flanges that can be mounted to brake rotors, wheels, and
the vehicle chassis itself. These kind of units initially took hold in the U.S., so NSK first
developed and commercialized HUB Ⅲ for American customers. With success, we later
expanded this business to Japanese and European automobiles. NSK then improved
HUB Ⅲ with high-performance seals, low-torque bearings, lower vibration during
braking, lighter weight, and sophisticated ABS sensors. In addition, we established
overseas production facilities to tackle our global expansion. We currently supply
products to major global automakers from 10 factories in nine countries.
Large Wind Turbine Bearings
Using analysis technology and material engineering to
increase wind turbine output, turbine size, and offshore applications
NSK’s purchase of U.K. bearing maker UPI in 1990 gave us a foothold in the
conservative European market. Since then, NSK has put great value on European
industrial machinery manufacturers who have extended their businesses on a global
scale. We’re worked to strengthen ties with these manufacturers with the aim of sales
expansion. Many big players in wind turbines were based in Europe where wind power
was spreading as an effective form of renewable energy. However, durability was an
issue amid the trend toward higher output, larger machines, and offshore facilities.
Seizing this opportunity, we used our highly rated advanced analysis technologies to
launch into this market. We solved the durability issue by proposing optimal
combinations of higher durability materials with different types of extra large bearings.
Through our efforts, we gained the trust of the European wind turbine market and
expanded this business worldwide.
Bearings in the 0 Series Shinkansen (Bullet Train)
Expanding overseas high-speed rail via essential technology
Rolling stock bearings were the first to enter full-scale production at NSK after World War II.
They were needed for the axles, main motors, and transmissions for the then-named
Japanese National Railways and private regional railways. The world-renowned Japanese
Shinkansen (bullet train) commenced operations on October 1, 1964, just before the Tokyo
Olympics. A year earlier in 1963, the Shinkansen set a speed record of 256 km/h, with NSK
lending its support to the project from the development stage. For more than 50 years since
the rollout of the initial 0 Series, NSK bearings have been used in all Shinkansen models and
have helped maintain safe and comfortable rail travel. We have honed our technologies via the
Shinkansen to be faster, more compact, lighter, and more durable. Based on our track record,
we have expanded businesses to include high-speed railways in China and South Korea, as
well as the TGV in France.
Net Sales for NSK Over Time
Photo provided by
Central Japan Railway Company
Fiscal 1960
¥10 billion
Fiscal 1974
¥100 billion
Half-Toroidal CVTs
Overcoming two decades of difficulties to achieve high-efficiency CVTs
Continuously variable transmissions (CVTs) and step ATs are just two of several types of automobile
automatic transmissions. In particular, step ATs have driven NSK’s growth in the Automotive Business.
We started developing half-toroidal CVTs in 1978. By overcoming many difficulties over 20 years, we
became the first and only manufacturer in the world to produce these items in 1999. A key technical
hurdle was how to efficiently control power transmission between the power rollers and disks in these
CVTs. To solve this, we used products that leveraged the science of tribology, which forms the
technological basis for bearings. Commercializing CVTs involved joint development with customers
focused on vehicle installation. At the same time, we worked to solve many development issues
together with business partners including traction oil makers and steel suppliers. Although the mass
production of vehicles using NSK CVTs has finished, lately the technology has gained attention again.
Many customers are focusing on EV (electric vehicle) deceleration mechanisms* based on this
technology’s efficient power transfer functionality.
* Please see P. 19 for more details on EV deceleration mechanisms (Traction Reducer).
Fiscal 2017
Fiscal 2000
¥500 billion
¥1trillion
1916
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2017 (FY)
02
NSK REPORT 2018
NSK REPORT 2018
03
1915195919991987199919631958 Complete Picture and Value Creation Story of NSK
To Our Stakeholders
Contributing to Society
While Growing as a Company̶
NSK Will Set the Future in Motion
by Creating New Value Beyond
the World’s Expectations
President and Chief Executive Officer
Review of FY2017 and Outlook for FY2018̶the Final Year of NSK’s Fifth Mid-Term Management Plan
Record Performance in FY2017
In fiscal 2017 (the year ended March 31, 2018), NSK reached ¥1
trillion in sales for the first time in our history, while also marking
record profits of ¥97.9 billion in operating income. Demand in the
Industrial Machinery Business recovered markedly, contributing to
a significant boost in sales volume. Demand from the machine tool
sector̶which began a gradual recovery in the third quarter of fiscal
2016̶underwent a rapid surge, primarily due to investment in
machines used to manufacture smartphones and related
components. We also saw an increase in sales to the automotive
industry and the general machinery sector. Furthermore, in
addition to increased investment in semiconductor production
equipment, demand for durable goods and home appliances also
remained strong, resulting in a surge in demand for NSK’s
precision bearings, ball screws, linear guides, and other precision
products. In NSK’s Automotive Business, although global vehicle
production in fiscal 2017 was flat from the previous year, sales of
needle bearings and components used in automatic transmissions
(ATs) grew significantly. Consumer demand for a comfortable
driving experience has grown in China and other developing
countries, leading to an increase in the AT adoption rate.
Meanwhile, the move to multistep AT technology in developing
countries has also contributed to higher demand. At the same time,
sales of NSK’s electric power steering (EPS) products, which had
previously served as a growth driver for the Company, declined due
to vehicle model changes.
Toward the Final Year of Our Fifth Mid-Term Management Plan
Fiscal 2018 marks the final year of our current Fifth Mid-Term
Management Plan. Under the banner of Operational Excellence, we
are striving to build robust frontline capabilities and strengthen our
manufacturing, sales, technology, and administrative functions in
order to further boost the competitiveness of our core business and
maintain a firm focus on our goal of achieving ¥100 billion in
operating income and a 10% operating income margin.
At the same time we are also striving to Innovate and Challenge
by developing new technologies and products, as well as smart
factories. Although these efforts are gradually beginning to produce
results, we will further accelerate initiatives in these areas. Utilizing
the innovation centers we have established in the US and Germany,
we are working to stay at the forefront of technological trends in the
US and Europe while searching for M&A opportunities.
To give an outline of our specific initiatives in each business, in
light of the robust demand environment in the industrial machinery
market we are working to strengthen our personnel base, optimize
our global production capacity, and maximize our output. We are
customers̶one of our key stakeholders̶are shifting. NSK must
At the corporate level it is also critical that we speed up our
respond by delivering performance and applications that fulfill these
decision-making processes in order to keep up with the pace of
needs. In doing so, we must move more quickly than ever. Rather
change in the world around us. I have stressed to employees that
than simply waiting for the lead from our customers, we will strive
we must review and optimize our internal systems, the way we
to anticipate the unmet needs of end users̶the consumers who
structure and run our meetings, and the reports and other
actually use the durable goods and the operators who actually use
documents we produce. We should not fear change, and if
commercial market, while in turn respecting the strengths and
young leaders capable of supporting this role. The Foundation
competitiveness of each distributor and sales partner.
proactively promotes exchanges between Japan and overseas
At NSK, we believe that future generations are also important
nations, extending support to Japanese students studying overseas
stakeholders. Accordingly, we hold several children’s science events
as well as international students studying in Japan.
at the Japan Science Foundation's Science Museum as well as our
own sites.* While there is particular interest in IT and AI among the
We are also working to increase opportunities for dialogue
the machines containing NSK products. With an open imagination
necessary should even be prepared to do away with long-standing
young generation of today, the devices these technologies are
with our shareholders and investors. In addition to our regular
and a firm focus on our future society, we will seize the initiative to
ways of working. As part of our initiatives toward NSK Vision 2026
applied in require mechanical elements to move. NSK shows
results-based IR initiatives, we also held a total of 35 ESG-focused
deliver innovative technological and business proposals to our
(Setting the Future in Motion),* our workplaces around the world
children the physical mechanisms that support movement in
dialogues during fiscal 2017. While we also provided detailed
customers. Going forward, NSK aims to generate value for both
are holding workshops. During this exercise, our aim is for
high-tech devices, helping spark their interest in science and
presentations on our “E” (Environment) and “S” (Society) policies
customers and end users by contributing to the environment and
participants to review their current ways of doing things, discuss
technology. We feel that these opportunities play a positive role in
and initiatives based on pre-submitted questions, there was
the realization of a safer, smoother society. In the Automotive
their ideal future, and then set to work on making this a reality.
Business, we aim to seize new opportunities in what is being dubbed
We have also kicked off new health and wellness initiatives.*
a “once-in-a-century” technological evolution,* including electric
As a company, we aim to support employees working to improve
vehicles (EVs), electrification, autonomous driving, and by-wire
their health, such as by quitting smoking or striving to maintain a
systems. Meanwhile, in the Industrial Machinery business we will
healthy weight.
work to respond to customer needs for stable operation and
While we have always valued dialogue between our
education and plan to continue holding such events in the future.
particularly strong interest from and engagement with investors in
We also established the NSK Scholarship Foundation* as part of
relation to our “G” (Corporate Governance) initiatives. On several
events to commemorate our 100th anniversary, and last year began
occasions we held constructive dialogue on topics such as the
extending support to both Japanese and overseas students studying
operation and effectiveness of our Board of Directors, our
outside their home countries. With the number of Japanese
succession planning at the management level, and the
students studying overseas on the decline, the presence and
independence of NSK’s outside directors. At our 2018 Ordinary
component life prediction, which will be required as IoT technology
management and employees, we are working to create even more
influence of Japanese experts at overseas educational institutions
General Meeting of Shareholders, our shareholders also voted to
advances.
opportunities for open discussion. By further enhancing two-way
communication with employees, we aim to manage the company in
is rapidly diminishing. If this trend continues, Japan’s voice on the
increase the number of outside directors on NSK’s Board to five out
international stage will inevitably weaken. With the aim of ensuring
of 12 total members, including the Company’s first female outside
Japan remains a trusted member of the Asian community, we
director.
established the NSK Scholarship Foundation in order to develop
To achieve this, we need a transformation in the mindsets of
a way that resonates with all who work there.
our employees. I always stress to employees the importance of
stepping outside the company and experiencing the world firsthand.
The companies that provide us with materials, components,
There is a limit to the knowledge and information one can obtain
and machines are not simply suppliers but valued business
within the confines of the company. Only by stepping out into the
partners who play an important role in our final products. NSK’s
real world can you truly sense the breakneck speed of change and
business, including our quality, performance, and delivery
evolution taking place. It soon becomes evident that we at NSK will
standards, would not be possible without their support. It is
need to use our imagination and creativity to kick it into high gear.
therefore important that we establish a relationship where our
Whether test driving an electric car, trying out a high-end appliance,
business partners are able to offer us constructive feedback and
or going to an open cut coal or metal ore mine and observing the
suggestions, rather than NSK giving a one-sided explanation of our
systems by which the minerals are transported, it is always
procurement policy or simply stating our performance
important to identify the current reality firsthand and imagine the
requirements. For example, it may be that revising the drawings or
range of unmet needs that might exist.
specifications we request could make it easier for our business
also working to absorb rising personnel and material costs and
to further bolster our supply framework. We will also work to
further enhance our profitability by restoring our pricing levels,
quickly secure mass production orders for our lower assist type
which had declined during the preceding period of low demand.
EPS products. To achieve this, we are accelerating our development
We will continue to improve our productivity and push forward with
efforts to create models ready for installation in actual vehicles.
global procurement initiatives. In light of mid- to long-term demand
Meanwhile, we commenced mass production of our first
trends, we will also move to expand our production capacity as
large-scale order of ball screws for electric brake boosters*̶a
quickly as possible. Through these and other measures, we will
product for which we anticipate demand growth in the future. In
further strengthen our supply framework while developing
light of the technological trend toward electric braking systems, we
technical response capabilities to win the trust of our customers,
proposed a solution to our customers in the form of a ball screw
including the introduction of automatic inspection systems and
type product integrated into a unit together with bearings. By
digital technology to meet quality requirements in an increasingly
utilizing our time-tested comprehensive mass production and
sophisticated market.
quality control systems spanning design to manufacturing, we will
In the Automotive Business, global vehicle production is
develop this product line into a next-generation core product for
forecast to increase by around 3% during the current fiscal year.
NSK̶one that delivers both outstanding technological
However, in growth areas such as AT-related products we will need
performance and strong profitability.
*Ball screws for electric brake boosters (P. 17, P. 18)
Creating Value Together With Our Stakeholders
Aiming for Sustainable Value Co-Creation
NSK’s business is founded on a trust relationship with a range of
Although many changes have been predicted to occur in the
stakeholders. Together with each of our stakeholders we aim to
world around us, the speed and impact of these developments has
generate a range of value, ultimately contributing to the realization
been even greater than initially anticipated. Amidst this wave of
of a sustainable society.
dynamic technological innovation, the requirements of our
partners to provide these items
while maintaining product
performance and quality. These
types of initiatives will ultimately
help improve the products and
services we deliver to customers.
The distributors and sales
outlets that serve as the contact
point between NSK and a diverse
range of end users and the market
are also our important business
partners. Sales outlets
communicate the needs of and
problems experienced by end
users. We use this information to
develop products and services that
can help solve these problems,
which are once again delivered to
end users via sales outlets. We
realize that each distributor and
sales outlet is unique, with
different regions and fields of
specialty. At NSK we aim to build a
brand that is relied on and trusted
in the maintenance/repair and
04
NSK REPORT 2018
NSK REPORT 2018
05
Complete Picture and Value Creation Story of NSK
To Our Stakeholders
Contributing to Society
While Growing as a Company̶
NSK Will Set the Future in Motion
by Creating New Value Beyond
the World’s Expectations
President and Chief Executive Officer
Review of FY2017 and Outlook for FY2018̶the Final Year of NSK’s Fifth Mid-Term Management Plan
Record Performance in FY2017
In fiscal 2017 (the year ended March 31, 2018), NSK reached ¥1
precision bearings, ball screws, linear guides, and other precision
trillion in sales for the first time in our history, while also marking
products. In NSK’s Automotive Business, although global vehicle
record profits of ¥97.9 billion in operating income. Demand in the
production in fiscal 2017 was flat from the previous year, sales of
Industrial Machinery Business recovered markedly, contributing to
needle bearings and components used in automatic transmissions
a significant boost in sales volume. Demand from the machine tool
(ATs) grew significantly. Consumer demand for a comfortable
sector̶which began a gradual recovery in the third quarter of fiscal
driving experience has grown in China and other developing
2016̶underwent a rapid surge, primarily due to investment in
countries, leading to an increase in the AT adoption rate.
machines used to manufacture smartphones and related
Meanwhile, the move to multistep AT technology in developing
components. We also saw an increase in sales to the automotive
countries has also contributed to higher demand. At the same time,
industry and the general machinery sector. Furthermore, in
sales of NSK’s electric power steering (EPS) products, which had
addition to increased investment in semiconductor production
previously served as a growth driver for the Company, declined due
equipment, demand for durable goods and home appliances also
to vehicle model changes.
remained strong, resulting in a surge in demand for NSK’s
Toward the Final Year of Our Fifth Mid-Term Management Plan
Fiscal 2018 marks the final year of our current Fifth Mid-Term
factories. Although these efforts are gradually beginning to produce
Management Plan. Under the banner of Operational Excellence, we
results, we will further accelerate initiatives in these areas. Utilizing
are striving to build robust frontline capabilities and strengthen our
the innovation centers we have established in the US and Germany,
manufacturing, sales, technology, and administrative functions in
we are working to stay at the forefront of technological trends in the
order to further boost the competitiveness of our core business and
US and Europe while searching for M&A opportunities.
maintain a firm focus on our goal of achieving ¥100 billion in
To give an outline of our specific initiatives in each business, in
operating income and a 10% operating income margin.
light of the robust demand environment in the industrial machinery
At the same time we are also striving to Innovate and Challenge
market we are working to strengthen our personnel base, optimize
by developing new technologies and products, as well as smart
our global production capacity, and maximize our output. We are
also working to absorb rising personnel and material costs and
further enhance our profitability by restoring our pricing levels,
which had declined during the preceding period of low demand.
We will continue to improve our productivity and push forward with
global procurement initiatives. In light of mid- to long-term demand
trends, we will also move to expand our production capacity as
quickly as possible. Through these and other measures, we will
further strengthen our supply framework while developing
technical response capabilities to win the trust of our customers,
including the introduction of automatic inspection systems and
digital technology to meet quality requirements in an increasingly
sophisticated market.
In the Automotive Business, global vehicle production is
forecast to increase by around 3% during the current fiscal year.
However, in growth areas such as AT-related products we will need
to further bolster our supply framework. We will also work to
quickly secure mass production orders for our lower assist type
EPS products. To achieve this, we are accelerating our development
efforts to create models ready for installation in actual vehicles.
Meanwhile, we commenced mass production of our first
large-scale order of ball screws for electric brake boosters*̶a
product for which we anticipate demand growth in the future. In
light of the technological trend toward electric braking systems, we
proposed a solution to our customers in the form of a ball screw
type product integrated into a unit together with bearings. By
utilizing our time-tested comprehensive mass production and
quality control systems spanning design to manufacturing, we will
develop this product line into a next-generation core product for
NSK̶one that delivers both outstanding technological
performance and strong profitability.
*Ball screws for electric brake boosters (P. 17, P. 18)
Creating Value Together With Our Stakeholders
Aiming for Sustainable Value Co-Creation
NSK’s business is founded on a trust relationship with a range of
stakeholders. Together with each of our stakeholders we aim to
generate a range of value, ultimately contributing to the realization
of a sustainable society.
Although many changes have been predicted to occur in the
world around us, the speed and impact of these developments has
been even greater than initially anticipated. Amidst this wave of
dynamic technological innovation, the requirements of our
04
NSK REPORT 2018
NSK REPORT 2018
05
customers̶one of our key stakeholders̶are shifting. NSK must
At the corporate level it is also critical that we speed up our
respond by delivering performance and applications that fulfill these
decision-making processes in order to keep up with the pace of
needs. In doing so, we must move more quickly than ever. Rather
change in the world around us. I have stressed to employees that
than simply waiting for the lead from our customers, we will strive
we must review and optimize our internal systems, the way we
to anticipate the unmet needs of end users̶the consumers who
structure and run our meetings, and the reports and other
actually use the durable goods and the operators who actually use
documents we produce. We should not fear change, and if
commercial market, while in turn respecting the strengths and
young leaders capable of supporting this role. The Foundation
competitiveness of each distributor and sales partner.
proactively promotes exchanges between Japan and overseas
At NSK, we believe that future generations are also important
nations, extending support to Japanese students studying overseas
stakeholders. Accordingly, we hold several children’s science events
as well as international students studying in Japan.
at the Japan Science Foundation's Science Museum as well as our
own sites.* While there is particular interest in IT and AI among the
We are also working to increase opportunities for dialogue
the machines containing NSK products. With an open imagination
necessary should even be prepared to do away with long-standing
young generation of today, the devices these technologies are
with our shareholders and investors. In addition to our regular
and a firm focus on our future society, we will seize the initiative to
ways of working. As part of our initiatives toward NSK Vision 2026
applied in require mechanical elements to move. NSK shows
results-based IR initiatives, we also held a total of 35 ESG-focused
deliver innovative technological and business proposals to our
(Setting the Future in Motion),* our workplaces around the world
children the physical mechanisms that support movement in
dialogues during fiscal 2017. While we also provided detailed
customers. Going forward, NSK aims to generate value for both
are holding workshops. During this exercise, our aim is for
high-tech devices, helping spark their interest in science and
presentations on our “E” (Environment) and “S” (Society) policies
customers and end users by contributing to the environment and
participants to review their current ways of doing things, discuss
technology. We feel that these opportunities play a positive role in
and initiatives based on pre-submitted questions, there was
the realization of a safer, smoother society. In the Automotive
their ideal future, and then set to work on making this a reality.
Business, we aim to seize new opportunities in what is being dubbed
We have also kicked off new health and wellness initiatives.*
a “once-in-a-century” technological evolution,* including electric
As a company, we aim to support employees working to improve
vehicles (EVs), electrification, autonomous driving, and by-wire
their health, such as by quitting smoking or striving to maintain a
systems. Meanwhile, in the Industrial Machinery business we will
healthy weight.
work to respond to customer needs for stable operation and
While we have always valued dialogue between our
education and plan to continue holding such events in the future.
particularly strong interest from and engagement with investors in
We also established the NSK Scholarship Foundation* as part of
relation to our “G” (Corporate Governance) initiatives. On several
events to commemorate our 100th anniversary, and last year began
occasions we held constructive dialogue on topics such as the
extending support to both Japanese and overseas students studying
operation and effectiveness of our Board of Directors, our
outside their home countries. With the number of Japanese
succession planning at the management level, and the
students studying overseas on the decline, the presence and
independence of NSK’s outside directors. At our 2018 Ordinary
component life prediction, which will be required as IoT technology
management and employees, we are working to create even more
influence of Japanese experts at overseas educational institutions
General Meeting of Shareholders, our shareholders also voted to
advances.
opportunities for open discussion. By further enhancing two-way
communication with employees, we aim to manage the company in
is rapidly diminishing. If this trend continues, Japan’s voice on the
increase the number of outside directors on NSK’s Board to five out
international stage will inevitably weaken. With the aim of ensuring
of 12 total members, including the Company’s first female outside
Japan remains a trusted member of the Asian community, we
director.
established the NSK Scholarship Foundation in order to develop
To achieve this, we need a transformation in the mindsets of
a way that resonates with all who work there.
our employees. I always stress to employees the importance of
stepping outside the company and experiencing the world firsthand.
The companies that provide us with materials, components,
There is a limit to the knowledge and information one can obtain
and machines are not simply suppliers but valued business
within the confines of the company. Only by stepping out into the
partners who play an important role in our final products. NSK’s
real world can you truly sense the breakneck speed of change and
business, including our quality, performance, and delivery
evolution taking place. It soon becomes evident that we at NSK will
standards, would not be possible without their support. It is
need to use our imagination and creativity to kick it into high gear.
therefore important that we establish a relationship where our
Whether test driving an electric car, trying out a high-end appliance,
business partners are able to offer us constructive feedback and
or going to an open cut coal or metal ore mine and observing the
suggestions, rather than NSK giving a one-sided explanation of our
systems by which the minerals are transported, it is always
procurement policy or simply stating our performance
important to identify the current reality firsthand and imagine the
requirements. For example, it may be that revising the drawings or
range of unmet needs that might exist.
specifications we request could make it easier for our business
partners to provide these items
while maintaining product
performance and quality. These
types of initiatives will ultimately
help improve the products and
services we deliver to customers.
The distributors and sales
outlets that serve as the contact
point between NSK and a diverse
range of end users and the market
are also our important business
partners. Sales outlets
communicate the needs of and
problems experienced by end
users. We use this information to
develop products and services that
can help solve these problems,
which are once again delivered to
end users via sales outlets. We
realize that each distributor and
sales outlet is unique, with
different regions and fields of
specialty. At NSK we aim to build a
brand that is relied on and trusted
in the maintenance/repair and
development of smart factories in both our automotive and
only be more efficient and less labor-intensive, but will also reduce
industrial businesses. We have already established concept model
environmental load while ensuring a clean, noise-free workplace
lines, and will continue working to develop next-generation
environment for our employees. These concepts have been realized
manufacturing systems which save space, reduce energy
in our second Korea plant,* which opened last year.
consumption, and are highly automated. Our future facilities will not
Complete Picture and Value Creation Story of NSK
To Our Stakeholders
customers̶one of our key stakeholders̶are shifting. NSK must
respond by delivering performance and applications that fulfill these
needs. In doing so, we must move more quickly than ever. Rather
than simply waiting for the lead from our customers, we will strive
to anticipate the unmet needs of end users̶the consumers who
actually use the durable goods and the operators who actually use
the machines containing NSK products. With an open imagination
and a firm focus on our future society, we will seize the initiative to
deliver innovative technological and business proposals to our
customers. Going forward, NSK aims to generate value for both
customers and end users by contributing to the environment and
the realization of a safer, smoother society. In the Automotive
Business, we aim to seize new opportunities in what is being dubbed
a “once-in-a-century” technological evolution,* including electric
vehicles (EVs), electrification, autonomous driving, and by-wire
systems. Meanwhile, in the Industrial Machinery business we will
work to respond to customer needs for stable operation and
component life prediction, which will be required as IoT technology
advances.
To achieve this, we need a transformation in the mindsets of
our employees. I always stress to employees the importance of
stepping outside the company and experiencing the world firsthand.
There is a limit to the knowledge and information one can obtain
within the confines of the company. Only by stepping out into the
real world can you truly sense the breakneck speed of change and
evolution taking place. It soon becomes evident that we at NSK will
need to use our imagination and creativity to kick it into high gear.
Whether test driving an electric car, trying out a high-end appliance,
or going to an open cut coal or metal ore mine and observing the
systems by which the minerals are transported, it is always
important to identify the current reality firsthand and imagine the
range of unmet needs that might exist.
At the corporate level it is also critical that we speed up our
decision-making processes in order to keep up with the pace of
change in the world around us. I have stressed to employees that
we must review and optimize our internal systems, the way we
structure and run our meetings, and the reports and other
documents we produce. We should not fear change, and if
necessary should even be prepared to do away with long-standing
ways of working. As part of our initiatives toward NSK Vision 2026
(Setting the Future in Motion),* our workplaces around the world
are holding workshops. During this exercise, our aim is for
participants to review their current ways of doing things, discuss
their ideal future, and then set to work on making this a reality.
We have also kicked off new health and wellness initiatives.*
As a company, we aim to support employees working to improve
their health, such as by quitting smoking or striving to maintain a
healthy weight.
While we have always valued dialogue between our
management and employees, we are working to create even more
opportunities for open discussion. By further enhancing two-way
communication with employees, we aim to manage the company in
a way that resonates with all who work there.
The companies that provide us with materials, components,
and machines are not simply suppliers but valued business
partners who play an important role in our final products. NSK’s
business, including our quality, performance, and delivery
standards, would not be possible without their support. It is
therefore important that we establish a relationship where our
business partners are able to offer us constructive feedback and
suggestions, rather than NSK giving a one-sided explanation of our
procurement policy or simply stating our performance
requirements. For example, it may be that revising the drawings or
specifications we request could make it easier for our business
partners to provide these items
while maintaining product
performance and quality. These
types of initiatives will ultimately
help improve the products and
services we deliver to customers.
The distributors and sales
outlets that serve as the contact
point between NSK and a diverse
range of end users and the market
are also our important business
partners. Sales outlets
communicate the needs of and
problems experienced by end
users. We use this information to
develop products and services that
can help solve these problems,
which are once again delivered to
end users via sales outlets. We
realize that each distributor and
sales outlet is unique, with
different regions and fields of
specialty. At NSK we aim to build a
brand that is relied on and trusted
in the maintenance/repair and
commercial market, while in turn respecting the strengths and
young leaders capable of supporting this role. The Foundation
competitiveness of each distributor and sales partner.
proactively promotes exchanges between Japan and overseas
At NSK, we believe that future generations are also important
nations, extending support to Japanese students studying overseas
stakeholders. Accordingly, we hold several children’s science events
as well as international students studying in Japan.
at the Japan Science Foundation's Science Museum as well as our
own sites.* While there is particular interest in IT and AI among the
We are also working to increase opportunities for dialogue
young generation of today, the devices these technologies are
with our shareholders and investors. In addition to our regular
applied in require mechanical elements to move. NSK shows
results-based IR initiatives, we also held a total of 35 ESG-focused
children the physical mechanisms that support movement in
dialogues during fiscal 2017. While we also provided detailed
high-tech devices, helping spark their interest in science and
presentations on our “E” (Environment) and “S” (Society) policies
technology. We feel that these opportunities play a positive role in
and initiatives based on pre-submitted questions, there was
education and plan to continue holding such events in the future.
particularly strong interest from and engagement with investors in
We also established the NSK Scholarship Foundation* as part of
relation to our “G” (Corporate Governance) initiatives. On several
events to commemorate our 100th anniversary, and last year began
occasions we held constructive dialogue on topics such as the
extending support to both Japanese and overseas students studying
operation and effectiveness of our Board of Directors, our
outside their home countries. With the number of Japanese
succession planning at the management level, and the
students studying overseas on the decline, the presence and
independence of NSK’s outside directors. At our 2018 Ordinary
influence of Japanese experts at overseas educational institutions
General Meeting of Shareholders, our shareholders also voted to
is rapidly diminishing. If this trend continues, Japan’s voice on the
increase the number of outside directors on NSK’s Board to five out
international stage will inevitably weaken. With the aim of ensuring
of 12 total members, including the Company’s first female outside
Japan remains a trusted member of the Asian community, we
director.
established the NSK Scholarship Foundation in order to develop
*Seizing new opportunities in “once-in-a-century” technological evolution (PP. 16-19)
*NSK Vision 2026: Setting the Future in Motion (PP. 20-21)
*Health and wellness initiatives (P. 53)
*Children’s science events held at Science Museum and NSK sites (P. 49)
*NSK Scholarship Foundation (P. 49)
Building a Sustainable Society
The UN Sustainable Development Goals (SDGs) and NSK’s Role
With irregular weather events and natural disasters becoming an
services̶namely their ability to reduce the burden on the
increasingly frequent occurrence around the world, it is important
environment. Bearings reduce friction, while EPS products help
that we obtain a firm understanding of the impact climate change
improve fuel efficiency. Reducing friction and improving control is
will have on NSK’s business. The NSK Mission Statement avows
NSK’s field of expertise. Accordingly, we will work to minimize
that NSK will contribute to a safer, smoother society and protect the
environmental impact through our core business as well as to
global environment through its innovative technology integrating
communicate these efforts. We will also disclose key performance
Motion & ControlTM, as well as work across national boundaries to
indicators (KPIs) that help the general public understand how our
improve relationships between people throughout the world.
efforts are contributing to environmental preservation.
Although the 17 sustainable development goals established by the
As an example related to SDG 12: Responsible Consumption and
United Nations are not directly linked to NSK’s business activities,
Production, one contribution NSK can make is to improve the
several are deeply related to our operations and are areas in which
efficiency of its material balance.* For instance, one possible
we can contribute proactively.
measure in the materials and production stage could involve
Thus far, we have worked to raise awareness of the SDGs
improving yield by replacing the conventional cutting method with
among our employees* via a range of tools. In the next stage, we
cold forging technology. We plan to introduce a range of
will link these goals to our business and discuss the specific steps
environmentally-friendly technology such as this. We can also raise
NSK can take to contribute to their achievement. In doing so, we
productivity, improve the material balance, and improve energy
will clarify the actions we at NSK must take. We will present our
efficiency by upgrading or overhauling older production machinery.
goals and how their achievement will be measured in our next
For example, utilizing induction hardening technology during the
Mid-Term Management Plan, which will start in fiscal 2019.
heat treatment process can reduce the overall amount of energy
The foundation of our efforts will remain our core products and
used. One other initiative we are taking on the production side is the
*Raising employee awareness of the UN SDGs (P. 47)
*Material balance (P. 50)
06
NSK REPORT 2018
NSK REPORT 2018
07
NSK’s business is founded on a trust relationship with a range of
Although many changes have been predicted to occur in the
stakeholders. Together with each of our stakeholders we aim to
world around us, the speed and impact of these developments has
generate a range of value, ultimately contributing to the realization
been even greater than initially anticipated. Amidst this wave of
of a sustainable society.
dynamic technological innovation, the requirements of our
development of smart factories in both our automotive and
only be more efficient and less labor-intensive, but will also reduce
industrial businesses. We have already established concept model
environmental load while ensuring a clean, noise-free workplace
lines, and will continue working to develop next-generation
environment for our employees. These concepts have been realized
manufacturing systems which save space, reduce energy
in our second Korea plant,* which opened last year.
consumption, and are highly automated. Our future facilities will not
Complete Picture and Value Creation Story of NSK
To Our Stakeholders
customers̶one of our key stakeholders̶are shifting. NSK must
At the corporate level it is also critical that we speed up our
respond by delivering performance and applications that fulfill these
decision-making processes in order to keep up with the pace of
needs. In doing so, we must move more quickly than ever. Rather
change in the world around us. I have stressed to employees that
than simply waiting for the lead from our customers, we will strive
we must review and optimize our internal systems, the way we
to anticipate the unmet needs of end users̶the consumers who
structure and run our meetings, and the reports and other
actually use the durable goods and the operators who actually use
documents we produce. We should not fear change, and if
the machines containing NSK products. With an open imagination
necessary should even be prepared to do away with long-standing
and a firm focus on our future society, we will seize the initiative to
ways of working. As part of our initiatives toward NSK Vision 2026
deliver innovative technological and business proposals to our
(Setting the Future in Motion),* our workplaces around the world
customers. Going forward, NSK aims to generate value for both
are holding workshops. During this exercise, our aim is for
customers and end users by contributing to the environment and
participants to review their current ways of doing things, discuss
the realization of a safer, smoother society. In the Automotive
their ideal future, and then set to work on making this a reality.
Business, we aim to seize new opportunities in what is being dubbed
We have also kicked off new health and wellness initiatives.*
a “once-in-a-century” technological evolution,* including electric
As a company, we aim to support employees working to improve
vehicles (EVs), electrification, autonomous driving, and by-wire
their health, such as by quitting smoking or striving to maintain a
systems. Meanwhile, in the Industrial Machinery business we will
healthy weight.
work to respond to customer needs for stable operation and
While we have always valued dialogue between our
component life prediction, which will be required as IoT technology
management and employees, we are working to create even more
advances.
opportunities for open discussion. By further enhancing two-way
communication with employees, we aim to manage the company in
To achieve this, we need a transformation in the mindsets of
a way that resonates with all who work there.
our employees. I always stress to employees the importance of
stepping outside the company and experiencing the world firsthand.
The companies that provide us with materials, components,
There is a limit to the knowledge and information one can obtain
and machines are not simply suppliers but valued business
within the confines of the company. Only by stepping out into the
partners who play an important role in our final products. NSK’s
real world can you truly sense the breakneck speed of change and
business, including our quality, performance, and delivery
evolution taking place. It soon becomes evident that we at NSK will
standards, would not be possible without their support. It is
need to use our imagination and creativity to kick it into high gear.
therefore important that we establish a relationship where our
Whether test driving an electric car, trying out a high-end appliance,
business partners are able to offer us constructive feedback and
or going to an open cut coal or metal ore mine and observing the
suggestions, rather than NSK giving a one-sided explanation of our
systems by which the minerals are transported, it is always
procurement policy or simply stating our performance
important to identify the current reality firsthand and imagine the
requirements. For example, it may be that revising the drawings or
range of unmet needs that might exist.
specifications we request could make it easier for our business
partners to provide these items
while maintaining product
performance and quality. These
types of initiatives will ultimately
help improve the products and
services we deliver to customers.
The distributors and sales
outlets that serve as the contact
point between NSK and a diverse
range of end users and the market
are also our important business
partners. Sales outlets
communicate the needs of and
problems experienced by end
users. We use this information to
develop products and services that
can help solve these problems,
which are once again delivered to
end users via sales outlets. We
realize that each distributor and
sales outlet is unique, with
different regions and fields of
specialty. At NSK we aim to build a
brand that is relied on and trusted
in the maintenance/repair and
commercial market, while in turn respecting the strengths and
competitiveness of each distributor and sales partner.
At NSK, we believe that future generations are also important
stakeholders. Accordingly, we hold several children’s science events
at the Japan Science Foundation's Science Museum as well as our
own sites.* While there is particular interest in IT and AI among the
young generation of today, the devices these technologies are
applied in require mechanical elements to move. NSK shows
children the physical mechanisms that support movement in
high-tech devices, helping spark their interest in science and
technology. We feel that these opportunities play a positive role in
education and plan to continue holding such events in the future.
We also established the NSK Scholarship Foundation* as part of
events to commemorate our 100th anniversary, and last year began
extending support to both Japanese and overseas students studying
outside their home countries. With the number of Japanese
students studying overseas on the decline, the presence and
influence of Japanese experts at overseas educational institutions
is rapidly diminishing. If this trend continues, Japan’s voice on the
international stage will inevitably weaken. With the aim of ensuring
Japan remains a trusted member of the Asian community, we
established the NSK Scholarship Foundation in order to develop
young leaders capable of supporting this role. The Foundation
proactively promotes exchanges between Japan and overseas
nations, extending support to Japanese students studying overseas
as well as international students studying in Japan.
We are also working to increase opportunities for dialogue
with our shareholders and investors. In addition to our regular
results-based IR initiatives, we also held a total of 35 ESG-focused
dialogues during fiscal 2017. While we also provided detailed
presentations on our “E” (Environment) and “S” (Society) policies
and initiatives based on pre-submitted questions, there was
particularly strong interest from and engagement with investors in
relation to our “G” (Corporate Governance) initiatives. On several
occasions we held constructive dialogue on topics such as the
operation and effectiveness of our Board of Directors, our
succession planning at the management level, and the
independence of NSK’s outside directors. At our 2018 Ordinary
General Meeting of Shareholders, our shareholders also voted to
increase the number of outside directors on NSK’s Board to five out
of 12 total members, including the Company’s first female outside
director.
*Seizing new opportunities in “once-in-a-century” technological evolution (PP. 16-19)
*NSK Vision 2026: Setting the Future in Motion (PP. 20-21)
*Health and wellness initiatives (P. 53)
*Children’s science events held at Science Museum and NSK sites (P. 49)
*NSK Scholarship Foundation (P. 49)
Building a Sustainable Society
The UN Sustainable Development Goals (SDGs) and NSK’s Role
With irregular weather events and natural disasters becoming an
increasingly frequent occurrence around the world, it is important
that we obtain a firm understanding of the impact climate change
will have on NSK’s business. The NSK Mission Statement avows
that NSK will contribute to a safer, smoother society and protect the
global environment through its innovative technology integrating
Motion & ControlTM, as well as work across national boundaries to
improve relationships between people throughout the world.
Although the 17 sustainable development goals established by the
United Nations are not directly linked to NSK’s business activities,
several are deeply related to our operations and are areas in which
we can contribute proactively.
Thus far, we have worked to raise awareness of the SDGs
among our employees* via a range of tools. In the next stage, we
will link these goals to our business and discuss the specific steps
NSK can take to contribute to their achievement. In doing so, we
will clarify the actions we at NSK must take. We will present our
goals and how their achievement will be measured in our next
Mid-Term Management Plan, which will start in fiscal 2019.
The foundation of our efforts will remain our core products and
services̶namely their ability to reduce the burden on the
environment. Bearings reduce friction, while EPS products help
improve fuel efficiency. Reducing friction and improving control is
NSK’s field of expertise. Accordingly, we will work to minimize
environmental impact through our core business as well as to
communicate these efforts. We will also disclose key performance
indicators (KPIs) that help the general public understand how our
efforts are contributing to environmental preservation.
As an example related to SDG 12: Responsible Consumption and
Production, one contribution NSK can make is to improve the
efficiency of its material balance.* For instance, one possible
measure in the materials and production stage could involve
improving yield by replacing the conventional cutting method with
cold forging technology. We plan to introduce a range of
environmentally-friendly technology such as this. We can also raise
productivity, improve the material balance, and improve energy
efficiency by upgrading or overhauling older production machinery.
For example, utilizing induction hardening technology during the
heat treatment process can reduce the overall amount of energy
used. One other initiative we are taking on the production side is the
*Raising employee awareness of the UN SDGs (P. 47)
*Material balance (P. 50)
06
NSK REPORT 2018
NSK REPORT 2018
07
NSK’s business is founded on a trust relationship with a range of
Although many changes have been predicted to occur in the
stakeholders. Together with each of our stakeholders we aim to
world around us, the speed and impact of these developments has
generate a range of value, ultimately contributing to the realization
been even greater than initially anticipated. Amidst this wave of
of a sustainable society.
dynamic technological innovation, the requirements of our
Complete Picture and Value Creation Story of NSK
To Our Stakeholders
development of smart factories in both our automotive and
industrial businesses. We have already established concept model
lines, and will continue working to develop next-generation
manufacturing systems which save space, reduce energy
consumption, and are highly automated. Our future facilities will not
only be more efficient and less labor-intensive, but will also reduce
environmental load while ensuring a clean, noise-free workplace
environment for our employees. These concepts have been realized
in our second Korea plant,* which opened last year.
*Second Korea plant (PP. 44-45)
Toward Further Growth
Tasks for NSK’s Business
Regarding the current tasks facing NSK’s business, in the short
term we must compensate for the decline in profitability in the
steering business by bolstering profits in the industrial business
and other areas of the automotive business. In the steering
business, our policy of intentionally concentrating resources on
column type EPS products for successful delivering on orders we
have secured is a factor that have led to a delay in the development
of lower assist type EPS products and a recent sales decline as a
result. Going forward, we will focus on accelerating development of
rack type EPS products utilizing NSK’s ball screw technology, EPS
control technology that can help deliver safe, comfortable driving,
and steer-by-wire systems in order to restore the business to
growth as swiftly as possible.
Although the Industrial Machinery Business is largely
influenced by the broader economic environment, we are recently
seeing the emergence of a dynamic supply and demand structure
that differs from our past experiences and assumptions, as well as
changes in the economic cycle. Smart technology is being
incorporated in automobiles, home appliances, industrial
machinery, infrastructure, and other applications, while
technological innovations are taking place in the fields of IoT, AI,
and robotics. These trends are beginning to generate large-scale
demand for new electronic devices and functional components. We
will aim to achieve sustainable growth by looking at which fields
*Overview of each product (PP. 18-19)
will grow in line with this demand and identifying the areas where
NSK can expand its sales through its differentiated technology.
Meanwhile, it is essential that we develop a mid- to long-term
strategic approach which allows us to link the dramatic evolution in
automotive technology to growth in our business. Some investors
remain concerned that the shift toward electric vehicles will
significantly reduce the number of bearings required, and it is
certainly true that the number of bearings incorporated in a pure EV
with no internal combustion engine may decline. However, there
are some areas in which bearing specifications and applications
will become even more sophisticated. I believe that NSK will be
able to attain a dominant position in this field in terms of value and
quality by utilizing the technological prowess we have developed
over the years. Furthermore, outside the field of bearings we are
working to develop new products that incorporate NSK's element
technology. Specific examples include Parallel Link type Active
Suspension*, which we exhibited at the 2017 Tokyo Motor Show, as
well as the Wheel Hub Motor Fit*, the Traction Reducer*̶a
compact, lightweight speed reducer for use in high-revolution EV
drive motors̶and the Force Feedback Actuator* designed for use
with steer-by-wire systems. Going forward, we aim to release
products that incorporate NSK’s proprietary technology, such as the
above, or composite products. We hope our investors will share our
enthusiasm for the potential such products hold.
Toward Greater Diversity and Inclusion
The world around us is rapidly changing. We are increasingly finding
multi-cultural̶where each and every employee can function at
that our conventional mindset and ways of working do not produce
their full capacity.
the same results as in the past. This trend is only going to
We are also promoting diversity in the form of globalization in
accelerate further in the future. In such an age, homogeneous
our training programs.* Since 2011 we have operated the NSK
organizations with members of a single mindset and background
Global Management College on an annual basis. In this program,
who rely on past examples in their decision-making will be unable to
talented young leaders from each region are selected to take part in
keep pace with changes in society. It is critical that we consider the
global management training to prepare them as candidates for
future in a flexible and agile manner and from a variety of
future global management roles. Over a six month period,
perspectives̶this is why diversity among the people who make up
participants visit four or five NSK sites around the world, where they
our teams and larger organization is so important. In order to
experience firsthand the issues facing the business in each region
change and adapt the way we do things, it is important that team
as they work in teams to devise and propose solutions. This
members from a variety of backgrounds̶including gender, age,
interaction between employees spanning different regions and job
and nationality̶gather to offer their perspective. Diversity and
types̶which would not be possible through the regular
inclusion* is the source of competitiveness that will power NSK’s
performance of their duties̶provides participants with a valuable
future. Although I am well aware that diversity is more than just
opportunity to experience a variety of viewpoints and ideas as well as
gender, one of our plants in China where 40% of employees and
to expand their personal global network. Our hope is that these
managers̶including the plant manager̶are women has
participants will continue to interact and collaborate following the
significantly outperformed all other plants in the country in terms of
program’s conclusion, bringing the NSK Group together as one and
quality and safety performance. In addition to combating noise and
helping to solve key problems.
oil mist to create a safer and more pleasant workplace
environment, the plant has refurbished a meeting room into
a gym where employees can work out to maintain their
health. While a higher ratio of female employees does not
necessarily lead to higher performance in all situations, I
believe that incorporating a variety of perspectives can help
drive new reforms and lead to positive outcomes. Providing
a workplace environment where women can work to their
full potential is a key management issue for NSK,
particularly in Japan where we are employing a range of
measures, including greater career support for female
employees and expanding the areas of the business where
women play an active role.
NSK is also promoting diversity in other areas,
including working to globalize our headquarters in Japan,
introducing programs that give employees more flexibility to
provide care for aging family members, and responding to
LGBT* issues. Furthermore, it is important to build a
workplace environment that is not only diverse but also
*Diversity and inclusion, LGBT (P. 52)
*In-house training and development programs (P. 53)
Investing in the Future
Uniting the NSK Group in One Direction
Going forward, we will continue to prioritize investment in our
sustainable growth when utilizing our cash flow. Specifically, we
will invest in the development of new technologies that allow us to
deliver new products through combination with NSK’s four core
technologies, manufacturing technologies such as precision
grinding, and other elemental technologies. We will also invest in
upgrading and overhauling our manufacturing machinery, securing
sound supply capabilities in growth fields, and strengthening our
production capabilities by switching to more efficient manufacturing
methods and installing new machinery based on our smart factory
concept. To fund this investment, we will maintain a firm focus on
profitability, namely our goal of securing a double-digit operating
income margin. If we can secure double-digit profitability, I believe
we will also be able to maintain the returns we provide to investors
above a certain floor.
Although we have indicated the possibility of M&A activity as a
method to supplement our future growth, this had not yet come to
fruition. Rather than simply waiting for chances to fall into our lap,
we need to take a more proactive approach and search out new
opportunities. We will actively pursue any opportunities for synergy
in our current business domain or related fields, such as a relevant
and complementary technology or territory.
NSK’s Integrated Report is now in its third year of publication, and
I therefore believe that utilizing NSK’s Integrated Report in this
we are honored to have received acclaim for our past two reports
manner has had a significant effect on building a shared awareness
from a wide range of stakeholders. Last fiscal year we held
and promoting better communication within the Company.
employee briefings on the Integrated Report, taking the opportunity
As the business environment becomes increasingly complex,
to build a common understanding of the NSK’s value creation and
the responsibilities of and expectations placed on companies are
the importance of a shared direction. Although this initiative is still in
becoming more diverse. In order for NSK to contribute to
its early stages, we hope to proactively broaden the scope and
sustainable global growth together with our stakeholders, we must
engage in communication with our employees outside Japan. In
continue to be a company that is needed by society. NSK will strive
order to build a common understanding it is important that the
to continue growing as a company while contributing to society by
vision and approach of management, as well as our overall direction
generating value that not only meets the needs of the times but
and external expectations are clearly communicated and discussed.
constantly exceeds expectations.
08
NSK REPORT 2018
NSK REPORT 2018
09
With irregular weather events and natural disasters becoming an
services̶namely their ability to reduce the burden on the
increasingly frequent occurrence around the world, it is important
environment. Bearings reduce friction, while EPS products help
that we obtain a firm understanding of the impact climate change
improve fuel efficiency. Reducing friction and improving control is
will have on NSK’s business. The NSK Mission Statement avows
NSK’s field of expertise. Accordingly, we will work to minimize
that NSK will contribute to a safer, smoother society and protect the
environmental impact through our core business as well as to
global environment through its innovative technology integrating
communicate these efforts. We will also disclose key performance
Motion & ControlTM, as well as work across national boundaries to
indicators (KPIs) that help the general public understand how our
improve relationships between people throughout the world.
efforts are contributing to environmental preservation.
Although the 17 sustainable development goals established by the
As an example related to SDG 12: Responsible Consumption and
United Nations are not directly linked to NSK’s business activities,
Production, one contribution NSK can make is to improve the
several are deeply related to our operations and are areas in which
efficiency of its material balance.* For instance, one possible
we can contribute proactively.
measure in the materials and production stage could involve
Thus far, we have worked to raise awareness of the SDGs
improving yield by replacing the conventional cutting method with
among our employees* via a range of tools. In the next stage, we
cold forging technology. We plan to introduce a range of
will link these goals to our business and discuss the specific steps
environmentally-friendly technology such as this. We can also raise
NSK can take to contribute to their achievement. In doing so, we
productivity, improve the material balance, and improve energy
will clarify the actions we at NSK must take. We will present our
efficiency by upgrading or overhauling older production machinery.
goals and how their achievement will be measured in our next
For example, utilizing induction hardening technology during the
Mid-Term Management Plan, which will start in fiscal 2019.
heat treatment process can reduce the overall amount of energy
The foundation of our efforts will remain our core products and
used. One other initiative we are taking on the production side is the
development of smart factories in both our automotive and
only be more efficient and less labor-intensive, but will also reduce
industrial businesses. We have already established concept model
environmental load while ensuring a clean, noise-free workplace
lines, and will continue working to develop next-generation
environment for our employees. These concepts have been realized
manufacturing systems which save space, reduce energy
in our second Korea plant,* which opened last year.
consumption, and are highly automated. Our future facilities will not
Complete Picture and Value Creation Story of NSK
To Our Stakeholders
*Second Korea plant (PP. 44-45)
Toward Further Growth
Tasks for NSK’s Business
Regarding the current tasks facing NSK’s business, in the short
will grow in line with this demand and identifying the areas where
term we must compensate for the decline in profitability in the
NSK can expand its sales through its differentiated technology.
steering business by bolstering profits in the industrial business
Meanwhile, it is essential that we develop a mid- to long-term
and other areas of the automotive business. In the steering
strategic approach which allows us to link the dramatic evolution in
business, our policy of intentionally concentrating resources on
automotive technology to growth in our business. Some investors
column type EPS products for successful delivering on orders we
remain concerned that the shift toward electric vehicles will
have secured is a factor that have led to a delay in the development
significantly reduce the number of bearings required, and it is
of lower assist type EPS products and a recent sales decline as a
certainly true that the number of bearings incorporated in a pure EV
result. Going forward, we will focus on accelerating development of
with no internal combustion engine may decline. However, there
rack type EPS products utilizing NSK’s ball screw technology, EPS
are some areas in which bearing specifications and applications
control technology that can help deliver safe, comfortable driving,
will become even more sophisticated. I believe that NSK will be
and steer-by-wire systems in order to restore the business to
able to attain a dominant position in this field in terms of value and
growth as swiftly as possible.
quality by utilizing the technological prowess we have developed
Although the Industrial Machinery Business is largely
over the years. Furthermore, outside the field of bearings we are
influenced by the broader economic environment, we are recently
working to develop new products that incorporate NSK's element
seeing the emergence of a dynamic supply and demand structure
technology. Specific examples include Parallel Link type Active
that differs from our past experiences and assumptions, as well as
Suspension*, which we exhibited at the 2017 Tokyo Motor Show, as
changes in the economic cycle. Smart technology is being
incorporated in automobiles, home appliances, industrial
machinery, infrastructure, and other applications, while
well as the Wheel Hub Motor Fit*, the Traction Reducer*̶a
compact, lightweight speed reducer for use in high-revolution EV
drive motors̶and the Force Feedback Actuator* designed for use
technological innovations are taking place in the fields of IoT, AI,
with steer-by-wire systems. Going forward, we aim to release
and robotics. These trends are beginning to generate large-scale
products that incorporate NSK’s proprietary technology, such as the
demand for new electronic devices and functional components. We
above, or composite products. We hope our investors will share our
will aim to achieve sustainable growth by looking at which fields
enthusiasm for the potential such products hold.
*Overview of each product (PP. 18-19)
Toward Greater Diversity and Inclusion
multi-cultural̶where each and every employee can function at
their full capacity.
We are also promoting diversity in the form of globalization in
our training programs.* Since 2011 we have operated the NSK
Global Management College on an annual basis. In this program,
talented young leaders from each region are selected to take part in
global management training to prepare them as candidates for
future global management roles. Over a six month period,
participants visit four or five NSK sites around the world, where they
experience firsthand the issues facing the business in each region
as they work in teams to devise and propose solutions. This
interaction between employees spanning different regions and job
types̶which would not be possible through the regular
performance of their duties̶provides participants with a valuable
opportunity to experience a variety of viewpoints and ideas as well as
to expand their personal global network. Our hope is that these
participants will continue to interact and collaborate following the
program’s conclusion, bringing the NSK Group together as one and
helping to solve key problems.
The world around us is rapidly changing. We are increasingly finding
that our conventional mindset and ways of working do not produce
the same results as in the past. This trend is only going to
accelerate further in the future. In such an age, homogeneous
organizations with members of a single mindset and background
who rely on past examples in their decision-making will be unable to
keep pace with changes in society. It is critical that we consider the
future in a flexible and agile manner and from a variety of
perspectives̶this is why diversity among the people who make up
our teams and larger organization is so important. In order to
change and adapt the way we do things, it is important that team
members from a variety of backgrounds̶including gender, age,
and nationality̶gather to offer their perspective. Diversity and
inclusion* is the source of competitiveness that will power NSK’s
future. Although I am well aware that diversity is more than just
gender, one of our plants in China where 40% of employees and
managers̶including the plant manager̶are women has
significantly outperformed all other plants in the country in terms of
quality and safety performance. In addition to combating noise and
oil mist to create a safer and more pleasant workplace
environment, the plant has refurbished a meeting room into
a gym where employees can work out to maintain their
health. While a higher ratio of female employees does not
necessarily lead to higher performance in all situations, I
believe that incorporating a variety of perspectives can help
drive new reforms and lead to positive outcomes. Providing
a workplace environment where women can work to their
full potential is a key management issue for NSK,
particularly in Japan where we are employing a range of
measures, including greater career support for female
employees and expanding the areas of the business where
women play an active role.
NSK is also promoting diversity in other areas,
including working to globalize our headquarters in Japan,
introducing programs that give employees more flexibility to
provide care for aging family members, and responding to
LGBT* issues. Furthermore, it is important to build a
workplace environment that is not only diverse but also
*Diversity and inclusion, LGBT (P. 52)
*In-house training and development programs (P. 53)
Investing in the Future
Uniting the NSK Group in One Direction
Going forward, we will continue to prioritize investment in our
profitability, namely our goal of securing a double-digit operating
sustainable growth when utilizing our cash flow. Specifically, we
income margin. If we can secure double-digit profitability, I believe
will invest in the development of new technologies that allow us to
we will also be able to maintain the returns we provide to investors
deliver new products through combination with NSK’s four core
above a certain floor.
technologies, manufacturing technologies such as precision
Although we have indicated the possibility of M&A activity as a
grinding, and other elemental technologies. We will also invest in
method to supplement our future growth, this had not yet come to
upgrading and overhauling our manufacturing machinery, securing
fruition. Rather than simply waiting for chances to fall into our lap,
sound supply capabilities in growth fields, and strengthening our
we need to take a more proactive approach and search out new
production capabilities by switching to more efficient manufacturing
opportunities. We will actively pursue any opportunities for synergy
methods and installing new machinery based on our smart factory
in our current business domain or related fields, such as a relevant
concept. To fund this investment, we will maintain a firm focus on
and complementary technology or territory.
NSK’s Integrated Report is now in its third year of publication, and
we are honored to have received acclaim for our past two reports
from a wide range of stakeholders. Last fiscal year we held
employee briefings on the Integrated Report, taking the opportunity
to build a common understanding of the NSK’s value creation and
the importance of a shared direction. Although this initiative is still in
its early stages, we hope to proactively broaden the scope and
engage in communication with our employees outside Japan. In
order to build a common understanding it is important that the
vision and approach of management, as well as our overall direction
and external expectations are clearly communicated and discussed.
I therefore believe that utilizing NSK’s Integrated Report in this
manner has had a significant effect on building a shared awareness
and promoting better communication within the Company.
As the business environment becomes increasingly complex,
the responsibilities of and expectations placed on companies are
becoming more diverse. In order for NSK to contribute to
sustainable global growth together with our stakeholders, we must
continue to be a company that is needed by society. NSK will strive
to continue growing as a company while contributing to society by
generating value that not only meets the needs of the times but
constantly exceeds expectations.
08
NSK REPORT 2018
NSK REPORT 2018
09
With irregular weather events and natural disasters becoming an
services̶namely their ability to reduce the burden on the
increasingly frequent occurrence around the world, it is important
environment. Bearings reduce friction, while EPS products help
that we obtain a firm understanding of the impact climate change
improve fuel efficiency. Reducing friction and improving control is
will have on NSK’s business. The NSK Mission Statement avows
NSK’s field of expertise. Accordingly, we will work to minimize
that NSK will contribute to a safer, smoother society and protect the
environmental impact through our core business as well as to
global environment through its innovative technology integrating
communicate these efforts. We will also disclose key performance
Motion & ControlTM, as well as work across national boundaries to
indicators (KPIs) that help the general public understand how our
improve relationships between people throughout the world.
efforts are contributing to environmental preservation.
Although the 17 sustainable development goals established by the
As an example related to SDG 12: Responsible Consumption and
United Nations are not directly linked to NSK’s business activities,
Production, one contribution NSK can make is to improve the
several are deeply related to our operations and are areas in which
efficiency of its material balance.* For instance, one possible
we can contribute proactively.
measure in the materials and production stage could involve
Thus far, we have worked to raise awareness of the SDGs
improving yield by replacing the conventional cutting method with
among our employees* via a range of tools. In the next stage, we
cold forging technology. We plan to introduce a range of
will link these goals to our business and discuss the specific steps
environmentally-friendly technology such as this. We can also raise
NSK can take to contribute to their achievement. In doing so, we
productivity, improve the material balance, and improve energy
will clarify the actions we at NSK must take. We will present our
efficiency by upgrading or overhauling older production machinery.
goals and how their achievement will be measured in our next
For example, utilizing induction hardening technology during the
Mid-Term Management Plan, which will start in fiscal 2019.
heat treatment process can reduce the overall amount of energy
The foundation of our efforts will remain our core products and
used. One other initiative we are taking on the production side is the
Complete Picture and Value Creation Story of NSK
Corporate Value Creation Model
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
Mission Statement
Mission Statement
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.
NSK Vision 2026
Diverse Capital and Inputs
NSK’s Value Creation Process (Business Model)
Action Guidelines
Management Principles
Output and Outcomes
2
Business Foundation and
Four Drivers for Expansion and
Enhancement
Management Principles /
Action Guidelines
Mission
Statement
1
3
4
5
To provide our customers with
innovative and responsive
solutions through our world
leading technologies.
To provide challenges and
opportunities to our employees,
utilizing their skills and
encouraging their creativity and
individuality.
To identify the needs of the present
and future, and to meet these
needs by being flexible, agile, and
dynamic.
To contribute to the communities
in which we operate.
To manage our business from an
international perspective and to
develop a strong presence
throughout the world.
NSK Vision 2026
Beyond Limits,
Beyond Today
ーDRIVERー
The Fifth Mid-Term
Management Plan
Beyond Frontiers
Beyond Individuals
Beyond Imagination
P. 27
Beyond Perceptions
Challenging the Future
ーDRIVERー
Four Core
Technologies
P. 40
Feedback
R&D
SETTING THE FUTURE IN MOTION
We bring motion to life,
to enrich lifestyles,
and to build a brighter future.
NSK’s
Business Activities
Dedicated to uncovering society's needs,
we set ideas in motion,
to deliver solutions beyond imagination.
Sales/
Aftermarket
Receipt of
Orders
Safety
We're NSK.
And, we're setting the future in motion.
Quality
Compliance
NSK's Business
Industrial Machinery Business
Other
Manufacturing
3%
Industrial Machinery Bearings
20%
Precision Machinery and Parts
6%
Other Asia
14%
Procurement
Net Sales
(Year ended March 31, 2018)
Japan
36%
¥1,020.3 billion
China
21%
Europe
14%
The Americas
15%
Mass
Production
Design/
Preparation
Automotive Business
Automotive Components
37%
ーDRIVERー
Global Business
Platform
Overseas Development
( )
Capabilities
P. 44
ーDRIVERー
CSR/ESG
Management
P. 46
Automotive Bearings
34%
10
NSK REPORT 2018
NSK REPORT 2018
11
Refer to the Review of Operations (PP. 30-37) for details.
Long term
NSK REPORT 2018
13
Economies/Economic Trends
Capital Expenditures
Climate change and large-scale disasters
Economic trends in each country and
Bearing Net Sales
market affect related demand. For
example, the number of new
(including for industrial and automotive use)
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.
Share in Japan
No.1
The introduction of regulations and policies related to climate
change and shifting needs in products due to the implementation
of environment-related initiatives can have an effect on NSK's
business on a mid- to long-term basis. Earnings can also be
affected, including indirectly, in line with recovery efforts following
large-scale disasters such as earthquakes, heavy rains, and floods.
No.3
Global Share
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
● Improvement of compliance
diversity
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. 84 million
Number of patents held
6,987 patents/year
(6,430 patents in the previous fiscal year)
Cash flow from operating activities
¥83.7 billion
Dividends/Payout ratio
¥21.2 billion/30.5％
Lost-worktime injury rate* (global)
0.59 (0.68 in the previous fiscal year)
*For more information on lost-worktime
injury rate, please see P. 49.
Diversity (Global)
Proportion of female
employees 17.6％
(17.6% in the previous fiscal year)
Japan Management College
Total number of graduates
over all 17 college terms: 323
Global Management College
Total number of graduates
over all 7 college terms: 86
Number of regions:
Graduates from 20 countries
*For more information about the Japan
Management College and the Global
Management College, please see P. 9 and 53.
Number of employees who
have attained a TOEIC
score of 730 or higher
536 (507 in the previous fiscal year)
Development of environmentally
friendly products
224 products (cumulative total)
GHG emissions per production unit
14.5％ decrease (Japan)
(-10.4% in the previous fiscal year)
26.1％ decrease
(excluding Japan)
(-29.6% 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%).
Improved Corporate Value
Customers
Employees
Value Created
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Contribution to an advanced technological society
Suppliers
Realization of a more prosperous society
Local
Communities
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Shareholders
and Investors
Future
Generations
Realization of a Sustainable Society
Competitive Environment
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.
Social Issues
Safer and
Smoother Society
Protection of the
Global Environment
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
● Relationships of trust with
external parties
(users, suppliers, local
communities)
● Globally recognized and
trusted NSK brand
Production sites
(Plants)
Japan: 20
Overseas: 44
R&D centers
At 15 locations
in 10 countries
Ratio of new employees
with science backgrounds
(annual average over the past five years)
Number of employees
74.8％
worldwide
31,861
Employee development
expenditure per person
(non-consolidated)
Approx. ¥76,000
Total equity
¥561.0 billion
Interest-bearing debt
¥250.9 billion
Cash and cash equivalents
¥131.3 billion
Number of customer
inquiries to
NSK salespeople
6,604 cases/year
Natural Capital
Energy input (per year)
● Minerals (iron ore, coal, etc.),
water, energy
17,088 TJ
(As of March 31, 2018)
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
Changes in the prices for resources,
such as the steel and rare earths
minerals that are raw materials for
NSK products, affect revenue.
Complete Picture and Value Creation Story of NSK
Corporate Value Creation Model
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
Mission Statement
NSK Vision 2026
Social Issues
Safer and
Smoother 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
● Relationships of trust with
external parties
(users, suppliers, local
communities)
● Globally recognized and
trusted NSK brand
Production sites
(Plants)
Japan: 20
Overseas: 44
R&D centers
At 15 locations
in 10 countries
Ratio of new employees
with science backgrounds
(annual average over the past five years)
74.8％
Number of employees
worldwide
31,861
Employee development
expenditure per person
(non-consolidated)
Approx. ¥76,000
Total equity
¥561.0 billion
Interest-bearing debt
¥250.9 billion
Cash and cash equivalents
¥131.3 billion
Number of customer
inquiries to
NSK salespeople
6,604 cases/year
Natural Capital
Energy input (per year)
● Minerals (iron ore, coal, etc.),
water, energy
17,088 TJ
(As of March 31, 2018)
Business Foundation and
Four Drivers for Expansion and
Enhancement
ーDRIVERー
The Fifth Mid-Term
Management Plan
P. 27
Feedback
R&D
ーDRIVERー
Four Core
Technologies
P. 40
Sales/
Aftermarket
NSK’s
Business Activities
Receipt of
Orders
Manufacturing
Safety
Quality
Compliance
Procurement
Mass
Production
Design/
Preparation
ーDRIVERー
Global Business
Platform
Overseas Development
( )
Capabilities
P. 44
ーDRIVERー
CSR/ESG
Management
P. 46
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. 84 million
Number of patents held
6,987 patents/year
(6,430 patents in the previous fiscal year)
Cash flow from operating activities
¥83.7 billion
Dividends/Payout ratio
¥21.2 billion/30.5％
Lost-worktime injury rate* (global)
0.59 (0.68 in the previous fiscal year)
*For more information on lost-worktime
injury rate, please see P. 49.
Diversity (Global)
Proportion of female
employees 17.6％
(17.6% in the previous fiscal year)
Japan Management College
Total number of graduates
over all 17 college terms: 323
Global Management College
Total number of graduates
over all 7 college terms: 86
Number of regions:
Graduates from 20 countries
*For more information about the Japan
Management College and the Global
Management College, please see P. 9 and 53.
Number of employees who
have attained a TOEIC
score of 730 or higher
536 (507 in the previous fiscal year)
Development of environmentally
friendly products
224 products (cumulative total)
GHG emissions per production unit
14.5％ decrease (Japan)
(-10.4% in the previous fiscal year)
26.1％ decrease
(excluding Japan)
(-29.6% 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%).
Improved Corporate Value
Customers
Employees
Value Created
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Contribution to an advanced technological society
Suppliers
Realization of a more prosperous society
Local
Communities
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Shareholders
and Investors
Future
Generations
Realization of a Sustainable Society
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
Changes in the prices for resources,
such as the steel and rare earths
minerals that are raw materials for
NSK products, affect revenue.
10
NSK REPORT 2018
Economies/Economic Trends
Capital Expenditures
Climate change and large-scale disasters
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.
The introduction of regulations and policies related to climate
change and shifting needs in products due to the implementation
of environment-related initiatives can have an effect on NSK's
business on a mid- to long-term basis. Earnings can also be
affected, including indirectly, in line with recovery efforts following
large-scale disasters such as earthquakes, heavy rains, and floods.
Competitive Environment
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
NSK REPORT 2018
13
Complete Picture and Value Creation Story of NSK
NSK’s Business Activities and Corporate Value Creation
ーDRIVERー
The Fifth
Mid-Term
Management
Plan
NSK’s Business Activities
NSK engages in BtoB operations, with its major
customers including automakers and machinery
manufacturers. NSK has two business segments,
the Industrial Machinery Business and the Automotive
Business, which reflect the industries in which the
Company’s customers operate. The Industrial
Machinery Business Division Headquarters and the
Automotive Business Division Headquarters oversee
these businesses on a global level.
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 aftermarket services. As shown in the
chart on the right, NSK’s value chain creates value for
its customers through business activities that are
focused on safety, quality and compliance, and
encompass research and development,
manufacturing, sales and feedback to provide lasting
value for the Company’s customers.
NSK's Business Model (Value Chain)
Feedback
R&D
ーDRIVERー
Four Core
Technologies
Sales/
Aftermarket
NSK’s
Business Activities
Receipt of
Orders
Manufacturing
Safety
Quality
Compliance
Procurement
Mass
Production
Design/
Preparation
ーDRIVERー
Global Business
Platform
Overseas
Development
Capabilities
( )
R&D
Receipt of
Orders
ーDRIVERー
CSR/ESG
Management
Mass
Production
Design/
Preparation
Manufacturing
capital
Intellectual
capital
Human
capital
Financial
capital
Social/
Relationship
capital
Natural
capital
Shared Features of the Industrial Machinery Business and the Automotive Business
NSK’s products are components that enhance the performance of the customer’s machinery in which they are
incorporated. The product specifications and functional requirements of our customers have an impact on NSK’s
products and business activities.
NSK’s competitive advantage.
QCDDSM: Quality, Cost, Delivery, Development, Service and Management play an important role in securing
Demand conditions in the industries of our customers affect NSK’s net sales and profits.
The ability to develop business on a global scale affects NSK’s competitiveness and growth potential.
The ability to propose technological solutions is key to acquiring new projects.
In principle, products are manufactured once orders are received, rather than in anticipation of orders.
Procurement
Manufacturing
Sales/
Aftermarket
Feedback
Our four core technologies are tribology,
materials, numerical simulation and
mechatronics (see P. 40). In the field of R&D, NSK
engages in broad and cross-sectional research
and development that is not restricted by
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 the
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.
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, 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 at the
head office, which determines procurement
The manufacture of products takes place at the NSK
Group’s manufacturing plants. A wide range of
business collaboration, including in manufacturing,
quality assurance, manufacturing engineering/
equipment management, production control, plant
accounting and general affairs work, is necessary to
ensure stringent management concerning quality,
policies on a company-wide level. Collaboration
cost and delivery (QCD). Both the Industrial
with suppliers and stable procurement are
essential.
Machinery Business and the Automotive Business
maintain their own manufacturing plants.
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.
s
t
u
p
n
i
y
e
K
e
u
l
a
v
f
o
n
o
i
t
a
e
r
c
e
h
t
n
i
s
h
t
g
n
e
r
t
s
r
u
O
● 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.
● Mass production equipment preparation,
capital investment (manufacturing capital)
● Design engineers (human capital)
● Accumulation of a wide variety of
technologies (intellectual capital)
● Technology centers, R&D sites (intellectual
capital)
● NIT (intellectual and human capital), etc.
● NSK's strengths are in its ability to solve
complex technological problems based on our
four core technologies, the breadth of talented
technical staff and accumulated technologies
gained through deep knowledge and experience.
● Based on our tight-knit relationships with
customers, we can quickly grasp their product-
and technology-related needs and guide
development to meet those needs.
● NSK leverages the collaboration and joint
development with our customers, suppliers and
external research institutions in its 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.
● NSK has internal systems that support
tight-knit communications between
customers and the Company’s
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 and existing/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.
● 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 project
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 through timely and
cost-conscious preparations, from
product design to mass production.
● Know-how of each production site
(manufacturing, intellectual capital)
● Production plants and facilities (manufacturing capital)
● Various production technologies, accumulated
● Human resources to undertake production,
sales and inventory (PSI) management
● Joint development suppliers (intellectual,
know-how (intellectual capital)
(human capital)
social/relationship capital)
● Production technical skills (human capital)
● Coordination/collaboration with each supplier
● Suppliers and local communities
(social/relationship capital), etc.
(social/relationship capital)
● Customers, distributors and sales outlets in
aftermarket services (social/relationship
capital)
● Steel used as a raw material, components, oil, electric power
● Production-related survey and analytical data
and water (natural capital, manufacturing capital), etc.
(intellectual capital), etc.
● Favorable and strong relationships with suppliers that
● Operating 20 plants in Japan and 44 plants
enable the stable procurement of raw materials and
components, enhanced cost competitiveness and high
overseas, NSK possesses a production system
able to meet global demand in a timely
quality.
manner.
● NSK jointly develops materials, parts and grease with
● As mother plants, some of the plants both in
suppliers to improve the quality of its products.
● Overseas, NSK is working to reduce costs by improving
the local procurement ratio while advancing into
Japan and overseas have established support
systems, such as for launching overseas plants
and addressing measures for various tasks.
markets jointly with existing suppliers or assisting them
● Small-group activities (QC circles) are
in their efforts to make inroads independently.
● In equipment procurement, NSK develops its own equipment
and has a system for procurement 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, and BCP, and suggests improvements to these
suppliers as needed. NSK puts into practice green
procurement, avoids the use of conflict minerals and
ensures compliance with the UK Modern Slavery Act.
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.
● NSK aims to maintain appropriate levels of
inventory and undertakes strict inventory
controls with advanced PSI management.
● The bedrock of the aftermarket business is
NSK’s strong relationship with distributors and
sales outlets as well as its extensive network.
● NSK has advanced analysis capabilities and
accumulated technologies from access to a
wide range of data fields, such as for defects
and damage at customers and end users.
● In addition to responding to repair and
maintenance demand not only for its own
products but also for other companies’
products, NSK leverages its advanced network
to respond quickly to occasional demand
outside of routine maintenance.
● Feedback is used to improve products and
propose solutions with new technologies.
14
NSK REPORT 2018
NSK REPORT 2018
15
Complete Picture and Value Creation Story of NSK
NSK’s Business Activities and Corporate Value Creation
ーDRIVERー
The Fifth
Mid-Term
Management
Plan
NSK’s Business Activities
NSK engages in BtoB operations, with its major
customers including automakers and machinery
manufacturers. NSK has two business segments,
the Industrial Machinery Business and the Automotive
Business, which reflect the industries in which the
Company’s customers operate. The Industrial
Machinery Business Division Headquarters and the
Automotive Business Division Headquarters oversee
these businesses on a global level.
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 aftermarket services. As shown in the
chart on the right, NSK’s value chain creates value for
its customers through business activities that are
focused on safety, quality and compliance, and
encompass research and development,
manufacturing, sales and feedback to provide lasting
value for the Company’s customers.
NSK's Business Model (Value Chain)
Feedback
R&D
ーDRIVERー
Four Core
Technologies
Sales/
Aftermarket
NSK’s
Business Activities
Receipt of
Orders
Safety
Quality
Compliance
Procurement
Manufacturing
Mass
Production
Design/
Preparation
ーDRIVERー
Global Business
Platform
Overseas
Development
( )
Capabilities
ーDRIVERー
CSR/ESG
Management
Mass
Production
Design/
Preparation
Manufacturing
capital
Intellectual
capital
Human
capital
Financial
capital
Social/
Relationship
capital
Natural
capital
Shared Features of the Industrial Machinery Business and the Automotive Business
NSK’s products are components that enhance the performance of the customer’s machinery in which they are
incorporated. The product specifications and functional requirements of our customers have an impact on NSK’s
products and business activities.
QCDDSM: Quality, Cost, Delivery, Development, Service and Management play an important role in securing
NSK’s competitive advantage.
Demand conditions in the industries of our customers affect NSK’s net sales and profits.
The ability to develop business on a global scale affects NSK’s competitiveness and growth potential.
The ability to propose technological solutions is key to acquiring new projects.
In principle, products are manufactured once orders are received, rather than in anticipation of orders.
R&D
Receipt of
Orders
Procurement
Manufacturing
Sales/
Aftermarket
Feedback
Our four core technologies are tribology,
materials, numerical simulation and
The independent sales divisions of the
Industrial Machinery Business and the
mechatronics (see P. 40). In the field of R&D, NSK
engages in broad and cross-sectional research
Automotive Business coordinate with other
internal departments to win new orders. The
and development that is not restricted by
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.
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.
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, 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 at the
head office, which determines procurement
policies on a company-wide level. Collaboration
with suppliers and stable procurement are
essential.
The manufacture of products takes place at the NSK
Group’s manufacturing plants. A wide range of
business collaboration, including in manufacturing,
quality assurance, manufacturing engineering/
equipment management, production control, plant
accounting and general affairs work, is necessary to
ensure stringent management concerning quality,
cost and delivery (QCD). Both the Industrial
Machinery Business and the Automotive Business
maintain their own manufacturing plants.
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.
s
t
u
p
n
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y
e
K
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o
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a
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r
c
e
h
t
n
i
s
h
t
g
n
e
r
t
s
r
u
O
● 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
● Mass production equipment preparation,
capital investment (manufacturing capital)
capital)
● Strong relationships of trust with
customers (social/relationship capital)
● Sales capabilities (human capital)
● Design engineers (human capital)
● Accumulation of a wide variety of
technologies (intellectual capital)
● Technology centers, R&D sites (intellectual
● NSK brand recognition (social/relationship
capital)
capital), etc.
● NIT (intellectual and human capital), etc.
● NSK's strengths are in its ability to solve
complex technological problems based on our
four core technologies, the breadth of talented
technical staff and accumulated technologies
gained through deep knowledge and experience.
● Based on our tight-knit relationships with
customers, we can quickly grasp their product-
and technology-related needs and guide
development to meet those needs.
● NSK leverages the collaboration and joint
development with our customers, suppliers and
external research institutions in its 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.
● NSK has internal systems that support
tight-knit communications between
customers and the Company’s
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 and existing/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.
● 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 project
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 through timely and
cost-conscious preparations, from
product design to mass production.
● Know-how of each production site
(manufacturing, intellectual capital)
● Production plants and facilities (manufacturing capital)
● Various production technologies, accumulated
● Joint development suppliers (intellectual,
know-how (intellectual capital)
social/relationship capital)
● Coordination/collaboration with each supplier
(social/relationship capital), etc.
● Production technical skills (human capital)
● Suppliers and local communities
(social/relationship capital)
● Human resources to undertake production,
sales and inventory (PSI) management
(human capital)
● Customers, distributors and sales outlets in
aftermarket services (social/relationship
capital)
● Steel used as a raw material, components, oil, electric power
● Production-related survey and analytical data
and water (natural capital, manufacturing capital), etc.
(intellectual capital), etc.
● 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, NSK is working to reduce costs by improving
the local procurement ratio while advancing into
markets jointly with existing suppliers or assisting them
in their efforts to make inroads independently.
● In equipment procurement, NSK develops its own equipment
and has a system for procurement 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, and BCP, and suggests improvements to these
suppliers as needed. NSK puts into practice green
procurement, avoids the use of conflict minerals and
ensures compliance with the UK Modern Slavery Act.
● Operating 20 plants in Japan and 44 plants
overseas, NSK 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 addressing 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.
● NSK aims to maintain appropriate levels of
inventory and undertakes strict inventory
controls with advanced PSI management.
● The bedrock of the aftermarket business is
NSK’s strong relationship with distributors and
sales outlets as well as its extensive network.
● NSK has advanced analysis capabilities and
accumulated technologies from access to a
wide range of data fields, such as for defects
and damage at customers and end users.
● In addition to responding to repair and
maintenance demand not only for its own
products but also for other companies’
products, NSK leverages its advanced network
to respond quickly to occasional demand
outside of routine maintenance.
● Feedback is used to improve products and
propose solutions with new technologies.
14
NSK REPORT 2018
NSK REPORT 2018
15
Complete Picture and Value Creation Story of NSK
Feature
SETTING THE FUTURE IN MOTION
When NSK celebrated its 100th anniversary in 2016, we created “NSK Vision 2026” to guide our efforts over the next 10
years.
As a part of this vision, “Setting the Future in Motion” embodies our goal of going beyond merely meeting customer
needs. Instead, we take a wide view. We aim to be a company that proactively creates and proposes new value based on
end-user needs. To that end, all of us should possess flexible thinking and aim to take on new challenges.
Amidst great changes in markets and society, we strive to fulfill our responsibilities and contribute to society through
our businesses and products. Through our efforts, we hope to become a vital presence in the world.
In our first feature, we’ll introduce NSK’s ongoing efforts to create and provide value for automobiles during this
once-in-a-century period of dramatic technological innovation. After, we will spotlight the Global Team working to cement
“NSK Vision 2026” within the Group and tie it to our real-world activities.
1Feature
NSK Value Creation for Technological Innovation
in Automobiles
̶Change as a Chance to Soar
The transformation of automobiles is progressing at a speed and scope beyond expectations.
NSK is drawing fully on cultivated “running,” “turning,” and “stopping” technologies to propose a
“Future in Motion.” Through these, we aim to advance “mobility societies” and sustain growth.
Broad trends toward Connected (C), Autonomous (A), Shared
(S), and Electric (E) (CASE) operation are gaining speed.
Technologies related to these changes are thought to be
heading down two paths.
In the first, technology trends have constantly evolved over
time. In automobiles until now, “mobility,” “possession,” and
“experience” have been valued. Changes to improve
automobile performance and value occur through the
improvement of existing technologies based on the continuous
evolution of basic mechanisms.
The other path is of non-continuous technological
innovation. New technologies such as electric vehicles (EVs),
new materials, and autonomous driving are creating dramatic
structural changes. Automobiles can now be controlled
through signals and over networks. Within these connected
areas, there is a broad spread of value generated by enormous
amounts of driving data. Then, there are the changing ways in
which automobiles are being used. Rather than being owned,
they are shared through joint use or ride sharing. These and
other unprecedented and non-continuous changes are moving
forward.
Such broad changes are greatly impacting society and
relevant industries. In terms of automotives, we are seeing a
demand for ever-higher value with environmental
performance, safety, comfort, and convenience in mind.
NSK sees these changes as a great opportunity. As we
improve existing products, we are also equipping products to
automobiles for the first time. Through new and upcoming
technologies, we will continue to make contributions as a
mechanical parts manufacturer.
Increasing Value Through Technological Innovation in Automobiles
Technological transformation in automobiles
Non-continuous
innovation
Continuous
evolution
C A S E
Connected
Autonomous
Shared
Electric
Greater automobile value
Environmental performance
Safety
Comfort and convenience
16
NSK REPORT 2018
NSK’s contributions
Growing Automotive Businesses by Continuous Technological Advancement
As innovation in automobiles proceeds, the technological requirements for basic mechanisms also rise.
The important parts of automobiles will continue to evolve. NSK will be there as we constantly strive to expand
through our component technologies.
Expansion of Automatic Transmission (AT) Business
1
2
3
Transmission Market Forecast (By Type)
■ MT/AMT ■ AT ■ CVT
■ DCT ■ Strong HV ■ EV/FCV
104
109
117
(Million units)
97
89
Automatic transmissions (ATs) control automobile
acceleration and deceleration by automatically switching
gears. As environmental regulations become stricter,
customers need ATs that are more compact and light, have
more efficient friction control, and have better multistep AT
fuel efficiency and comfort. Currently, three factors are
increasing the need for ATs. By developing high-performance
products to meet customer needs, NSK has an ongoing
annual growth rate of 10% from bearing products, in
particular needle bearings, and AT-related components.
Background of NSK’s AT Business Expansion
1．Expansion of automatic transmissions used in emerging markets
2．Progress in shift to multistep AT (multistep AT = seven or more speeds)
3．More new business won from the largest customers
FY2015
FY2018
FY2021
FY2024
FY2030
(NSK forecast)
NSK Bearing Technology Supporting EVs and Electrification
To allow vehicles to travel longer distances, EVs need to be more efficient and lighter. EVs are also required to be quieter
by reducing the noise of mechanical parts. Bearings face similar pressures for more compact products with less friction,
higher speeds, and less noise. Also, as more vehicle functions become electric, in-vehicle motors will increase
dramatically. NSK will leverage its cultivated base technologies and inherent strengths and aim for ever-higher bearing
performance in these new fields.
Technology to Support Improved Bearing Performance
Number of In-Vehicle Motors
Vehicle-related issues
Bearing-related issues
NSK-specific technologies
(100 million units)
Increasing battery capacity
Reducing friction
Lubricants
Increasing efficiency
Increasing compactness
Seals
Boosting speed
Materials
Lowering loss
Reducing weight
Reducing noise
Reducing noise
Production technology
FY2015
FY2018
FY2021
FY2024
FY2030
(NSK estimate)
Major Deal: Mass Production of Ball Screws for Electric Brake Boosters Begins
To improve safety, automatic emergency braking systems are
increasingly becoming mandatory in vehicles. Brake boosters
(brake pedal amplifiers) are becoming electrified, and
demand is increasing. Forecasts call for 50%–60% of vehicles
produced worldwide to be equipped with electric brake
boosters by the mid-2020s.
Ball screw brake boosters are recognized for their
outstanding responsiveness and control. NSK received orders
for 4.5 million ball screws and started mass production for
some of these in 2018. While building a global production
structure, we will work to strengthen sales in this area.
* Please see P. 18 for details.
Demand Forecast for Electric Brakes
(Million units)
Total No. of automobiles produced
Automatic emergency brakes
Will be mandatory in the EU in FY20
Will be standard in the US in FY22
Automobiles
equipped with
electric brakes
FY2015
(NSK forecast)
FY2020
FY2022
FY2026
NSK REPORT 2018
17
120
100
80
60
40
20
0
80
60
40
20
0
100
80
60
40
20
0
Complete Picture and Value Creation Story of NSK
Feature
SETTING THE FUTURE IN MOTION
When NSK celebrated its 100th anniversary in 2016, we created “NSK Vision 2026” to guide our efforts over the next 10
years.
As a part of this vision, “Setting the Future in Motion” embodies our goal of going beyond merely meeting customer
needs. Instead, we take a wide view. We aim to be a company that proactively creates and proposes new value based on
end-user needs. To that end, all of us should possess flexible thinking and aim to take on new challenges.
Amidst great changes in markets and society, we strive to fulfill our responsibilities and contribute to society through
our businesses and products. Through our efforts, we hope to become a vital presence in the world.
In our first feature, we’ll introduce NSK’s ongoing efforts to create and provide value for automobiles during this
once-in-a-century period of dramatic technological innovation. After, we will spotlight the Global Team working to cement
“NSK Vision 2026” within the Group and tie it to our real-world activities.
1Feature
NSK Value Creation for Technological Innovation
in Automobiles
̶Change as a Chance to Soar
The transformation of automobiles is progressing at a speed and scope beyond expectations.
NSK is drawing fully on cultivated “running,” “turning,” and “stopping” technologies to propose a
“Future in Motion.” Through these, we aim to advance “mobility societies” and sustain growth.
Broad trends toward Connected (C), Autonomous (A), Shared
areas, there is a broad spread of value generated by enormous
(S), and Electric (E) (CASE) operation are gaining speed.
amounts of driving data. Then, there are the changing ways in
Technologies related to these changes are thought to be
which automobiles are being used. Rather than being owned,
heading down two paths.
they are shared through joint use or ride sharing. These and
In the first, technology trends have constantly evolved over
other unprecedented and non-continuous changes are moving
time. In automobiles until now, “mobility,” “possession,” and
forward.
“experience” have been valued. Changes to improve
Such broad changes are greatly impacting society and
automobile performance and value occur through the
relevant industries. In terms of automotives, we are seeing a
improvement of existing technologies based on the continuous
demand for ever-higher value with environmental
evolution of basic mechanisms.
performance, safety, comfort, and convenience in mind.
The other path is of non-continuous technological
NSK sees these changes as a great opportunity. As we
innovation. New technologies such as electric vehicles (EVs),
improve existing products, we are also equipping products to
new materials, and autonomous driving are creating dramatic
automobiles for the first time. Through new and upcoming
structural changes. Automobiles can now be controlled
technologies, we will continue to make contributions as a
through signals and over networks. Within these connected
mechanical parts manufacturer.
Increasing Value Through Technological Innovation in Automobiles
Technological transformation in automobiles
Non-continuous
innovation
Continuous
evolution
C A S E
Connected
Autonomous
Shared
Electric
Greater automobile value
Environmental performance
Safety
Comfort and convenience
16
NSK REPORT 2018
NSK’s contributions
Growing Automotive Businesses by Continuous Technological Advancement
As innovation in automobiles proceeds, the technological requirements for basic mechanisms also rise.
The important parts of automobiles will continue to evolve. NSK will be there as we constantly strive to expand
through our component technologies.
1
2
3
Expansion of Automatic Transmission (AT) Business
Automatic transmissions (ATs) control automobile
acceleration and deceleration by automatically switching
gears. As environmental regulations become stricter,
customers need ATs that are more compact and light, have
more efficient friction control, and have better multistep AT
fuel efficiency and comfort. Currently, three factors are
increasing the need for ATs. By developing high-performance
products to meet customer needs, NSK has an ongoing
annual growth rate of 10% from bearing products, in
particular needle bearings, and AT-related components.
(Million units)
120
97
89
100
80
60
Transmission Market Forecast (By Type)
■ MT/AMT ■ AT ■ CVT
■ DCT ■ Strong HV ■ EV/FCV
104
109
117
Background of NSK’s AT Business Expansion
1．Expansion of automatic transmissions used in emerging markets
2．Progress in shift to multistep AT (multistep AT = seven or more speeds)
3．More new business won from the largest customers
40
20
0
FY2015
FY2018
FY2021
FY2024
FY2030
(NSK forecast)
NSK Bearing Technology Supporting EVs and Electrification
To allow vehicles to travel longer distances, EVs need to be more efficient and lighter. EVs are also required to be quieter
by reducing the noise of mechanical parts. Bearings face similar pressures for more compact products with less friction,
higher speeds, and less noise. Also, as more vehicle functions become electric, in-vehicle motors will increase
dramatically. NSK will leverage its cultivated base technologies and inherent strengths and aim for ever-higher bearing
performance in these new fields.
Technology to Support Improved Bearing Performance
Vehicle-related issues
Bearing-related issues
NSK-specific technologies
Number of In-Vehicle Motors
(100 million units)
80
Increasing battery capacity
Reducing friction
Lubricants
Increasing efficiency
Increasing compactness
Seals
Boosting speed
Materials
Lowering loss
Reducing weight
Reducing noise
Reducing noise
Production technology
FY2015
FY2018
FY2021
FY2024
FY2030
(NSK estimate)
Major Deal: Mass Production of Ball Screws for Electric Brake Boosters Begins
To improve safety, automatic emergency braking systems are
increasingly becoming mandatory in vehicles. Brake boosters
(brake pedal amplifiers) are becoming electrified, and
demand is increasing. Forecasts call for 50%–60% of vehicles
produced worldwide to be equipped with electric brake
boosters by the mid-2020s.
Demand Forecast for Electric Brakes
(Million units)
100
Total No. of automobiles produced
80
60
Ball screw brake boosters are recognized for their
outstanding responsiveness and control. NSK received orders
for 4.5 million ball screws and started mass production for
some of these in 2018. While building a global production
structure, we will work to strengthen sales in this area.
* Please see P. 18 for details.
Automatic emergency brakes
Will be mandatory in the EU in FY20
Will be standard in the US in FY22
Automobiles
equipped with
electric brakes
FY2015
FY2020
FY2022
FY2026
(NSK forecast)
NSK REPORT 2018
17
60
40
20
0
40
20
0
Complete Picture and Value Creation Story of NSK
1Feature
NSK Value Creation for Technological Innovation in Automobiles
̶Change as a Chance to Soar
Taking “Running,” “Turning,” and “Stopping” to the Next Era
NSK has been working in a number of R&D fields while imagining a future where autonomous and electric vehicles
are common.
Based on our Four Core Technologies, we have honed an array of knowledge. We will use our expertise to
improve stability, comfort, and more in our proposals for next-generation automobiles.
Wheel Hub Motor Fit
Ball Screws for Electric Brake Boosters
・ Compact in-wheel motor for EV drive systems
・ Flexible drive force distribution with four-wheel
independent drive
・ Contributing to the spread of automatic brake systems
・ Solution to electrify brake boosters
・ Excellent responsiveness and control gained through highly
・ Two built-in motors and a compact built-in transmission
efficient ball screws
▶Customer Needs and New Technology
Automatic brake systems not only help reduce accidents, but they are also
essential in autonomous vehicles. Now, installation rates are going up,
and they are getting more popular. Moreover, as more and more vehicles
become hybrid or electric, brake boosters are moving away from
traditional vacuum boosters to electric types. Responsiveness is crucial in
these fused electric brake boosters.
▶Product Characteristics
There are a number of kinds of electric brake boosters, but ball screws
are the most promising for high-level regenerative brake systems and
emergency auto braking. Ball screws are highly efficient at converting
rotational motion to linear motion. This means they can convert motor
pressure to braking pressure and respond with precise control. These
features make them vital for high performance in electric brake boosters
and for braking systems overall. Brakes are a mechanism for “stopping”
in automobiles, but brake electrification has also made independent
control of the tires simpler. This system enables high attitudinal control by
allowing the braking force on each wheel to vary. We continue to develop
these key ball screws to support improved brake systems.
▶Customer Needs and New Technology
There are a variety of EV drive systems; some have multiple
motors and differing deceleration mechanisms exist. In-wheel
motors have their drive motors inside the wheels. Four-wheel
independent drives will offer flexible drive power distribution and
increased energy transmission efficiency. These drives will also
allow for better steering performance, more cabin space, and
other merits.
▶Product Characteristics
The “Wheel Hub Motor Fit” is a drive
system equipped to the wheel itself. This
is just one more example of how we
constantly evolve and improve with
practical applications in mind. With a
more compact motor embedded inside
the wheel, this NSK technology features
a proprietary two-motor system. These
motors can be controlled in tandem to
change speeds through a mini internal
transmission mechanism. In addition to
enabling bursts of power and driving
speed, drive power can be controlled
per wheel for high-dimensional
performance that improves stability and
collision avoidance. Due to its small
size, this technology can be equipped in
a variety of vehicles. We are making
steady progress toward a practical
application.
Parallel Link type Active Suspension
・ Ideal attitudinal control in automobiles
・ Easy adjustments for wheel angles, track, and wheel base*
・ Can be applied to steering systems for steer-by-wire functionality
▶Customer Needs and New Technology
Attitudinal control has a direct impact on performance
and comfort while riding in an automobile. If the wheel
angle, track, and wheel base* can be easily adjusted,
driving performance can be improved. The positioning of
autonomous vehicles can also be controlled, ideally for
greater passenger comfort. Moreover, we also expect
this technology to be applied to steering systems such as
steer-by-wire.
*Track (distance between the left and right tires),
wheel base (distance between the front and rear wheels)
▶Product Characteristics
Parallel Link type Active Suspension combines NSK’s world-class ball screw
technology with a motor to realize optimal control of the wheel angle. Of course, the
system offers the standard left-right turning a driver needs at intersections, but it can
also adjust the wheels to have a negative camber angle for greater stability at high
speeds, such as on highway curves. In addition, the actuators can be repositioned so the
vehicle track and wheel base can be adjusted. For example, the shorter the distance
between the front and rear wheels, the tighter a vehicle can turn, which also makes it
easier to parallel park. Further, Parallel Link type Active Suspension achieves a high
degree of running stability by reducing vibrations while driving. It also offers excellent
attitudinal control by serving a much wider range of motion through all four wheels.
18
NSK REPORT 2018
Steer-By-Wire
(Force feedback actuator, road wheel actuator)
・ Proposal for road surface reaction feedback actuator
in addition to steering mechanism
・ Clear signal transmission between two actuators
(control system redundancy)
・ Electric tilt and telescopic configuration to store the
steering wheel
▶Customer Needs and New Technology
In the future, steering devices and brake mechanisms will likely be
controlled by electric signals. On the plus side, steer-by-wire devices take up
less space in the engine area. However, we must work to give steering
systems a natural sensation of speed and road surface conditions. In
addition, more complicated autonomous vehicles will require steering wheel
storage and retrieval functions.
▶Product Characteristics
NSK started with a ball screw steering gear and branched out into a variety
of steering components, including steering columns, intermediate shafts,
and joint parts. Recently, we have seen electric power steering (EPS)
contribute to advanced “turning” in automobiles. Force feedback actuators
and road wheel actuators for steer-by-wire systems now incorporate our
cultivated steering technologies. As mentioned, we are working on
steer-by-wire systems that feel natural when steering. We are also making
clear and steady signal transmission control systems that guarantee
functions during a failure. Finally, we are also working on electric tilt and
telescopic functions to allow the steering wheel to be stored, retrieved, and
adjusted.
Force feedback actuator
Road wheel actuator
Traction Reducer
・ Compact, lightweight, ultra-high-speed revolution
EV drive unit with optimized deceleration mechanism
・ Quiet operation with traction drive mechanism
・ Applied technology for mass production of actual
half-toroidal CVT systems
▶Customer Needs and New Technology
EV drive motors need to be compact and light to improve
power consumption and have enough output. If the motor must
support a high number of revolutions per second, improving
energy transmission efficiency in integrated deceleration
mechanisms is even more important. Moreover, motor-driven
vehicles need to be even quieter when running.
▶Product Characteristics
As electric vehicles become more common, the balance
between cost and cruising distance must be addressed. NSK is
moving ahead with a Traction Reducer. Instead of using gears,
this reducer uses a special oil that becomes solid only for a
moment when compressed. The “rolling” that results allows
for more efficient power transmission. This reducer is also
extremely quiet, regardless of revolution speed or torque.
By combining this breakthrough
traction decelerator with a
high-speed motor, overall
electric vehicle drive systems
can be even more compact and
light. The smooth transfer of
power gained through Traction
Reducer also reduces power
consumption.
Concept car using
NSK-developed products
NSK REPORT 2018
19
Complete Picture and Value Creation Story of NSK
1Feature
are common.
NSK Value Creation for Technological Innovation in Automobiles
̶Change as a Chance to Soar
Taking “Running,” “Turning,” and “Stopping” to the Next Era
NSK has been working in a number of R&D fields while imagining a future where autonomous and electric vehicles
Based on our Four Core Technologies, we have honed an array of knowledge. We will use our expertise to
improve stability, comfort, and more in our proposals for next-generation automobiles.
Wheel Hub Motor Fit
Ball Screws for Electric Brake Boosters
・ Compact in-wheel motor for EV drive systems
・ Flexible drive force distribution with four-wheel
independent drive
・ Contributing to the spread of automatic brake systems
・ Solution to electrify brake boosters
・ Excellent responsiveness and control gained through highly
・ Two built-in motors and a compact built-in transmission
efficient ball screws
▶Customer Needs and New Technology
▶Customer Needs and New Technology
There are a variety of EV drive systems; some have multiple
motors and differing deceleration mechanisms exist. In-wheel
motors have their drive motors inside the wheels. Four-wheel
independent drives will offer flexible drive power distribution and
increased energy transmission efficiency. These drives will also
allow for better steering performance, more cabin space, and
Automatic brake systems not only help reduce accidents, but they are also
essential in autonomous vehicles. Now, installation rates are going up,
and they are getting more popular. Moreover, as more and more vehicles
become hybrid or electric, brake boosters are moving away from
traditional vacuum boosters to electric types. Responsiveness is crucial in
these fused electric brake boosters.
▶Product Characteristics
There are a number of kinds of electric brake boosters, but ball screws
are the most promising for high-level regenerative brake systems and
emergency auto braking. Ball screws are highly efficient at converting
rotational motion to linear motion. This means they can convert motor
pressure to braking pressure and respond with precise control. These
features make them vital for high performance in electric brake boosters
and for braking systems overall. Brakes are a mechanism for “stopping”
in automobiles, but brake electrification has also made independent
control of the tires simpler. This system enables high attitudinal control by
allowing the braking force on each wheel to vary. We continue to develop
these key ball screws to support improved brake systems.
other merits.
▶Product Characteristics
The “Wheel Hub Motor Fit” is a drive
system equipped to the wheel itself. This
is just one more example of how we
constantly evolve and improve with
practical applications in mind. With a
more compact motor embedded inside
the wheel, this NSK technology features
a proprietary two-motor system. These
motors can be controlled in tandem to
change speeds through a mini internal
transmission mechanism. In addition to
enabling bursts of power and driving
speed, drive power can be controlled
per wheel for high-dimensional
performance that improves stability and
collision avoidance. Due to its small
size, this technology can be equipped in
a variety of vehicles. We are making
steady progress toward a practical
application.
Parallel Link type Active Suspension
・ Ideal attitudinal control in automobiles
・ Easy adjustments for wheel angles, track, and wheel base*
・ Can be applied to steering systems for steer-by-wire functionality
▶Customer Needs and New Technology
▶Product Characteristics
Attitudinal control has a direct impact on performance
and comfort while riding in an automobile. If the wheel
angle, track, and wheel base* can be easily adjusted,
driving performance can be improved. The positioning of
autonomous vehicles can also be controlled, ideally for
greater passenger comfort. Moreover, we also expect
this technology to be applied to steering systems such as
steer-by-wire.
*Track (distance between the left and right tires),
wheel base (distance between the front and rear wheels)
Parallel Link type Active Suspension combines NSK’s world-class ball screw
technology with a motor to realize optimal control of the wheel angle. Of course, the
system offers the standard left-right turning a driver needs at intersections, but it can
also adjust the wheels to have a negative camber angle for greater stability at high
speeds, such as on highway curves. In addition, the actuators can be repositioned so the
vehicle track and wheel base can be adjusted. For example, the shorter the distance
between the front and rear wheels, the tighter a vehicle can turn, which also makes it
easier to parallel park. Further, Parallel Link type Active Suspension achieves a high
degree of running stability by reducing vibrations while driving. It also offers excellent
attitudinal control by serving a much wider range of motion through all four wheels.
18
NSK REPORT 2018
Steer-By-Wire
(Force feedback actuator, road wheel actuator)
・ Proposal for road surface reaction feedback actuator
in addition to steering mechanism
・ Clear signal transmission between two actuators
(control system redundancy)
・ Electric tilt and telescopic configuration to store the
steering wheel
▶Customer Needs and New Technology
In the future, steering devices and brake mechanisms will likely be
controlled by electric signals. On the plus side, steer-by-wire devices take up
less space in the engine area. However, we must work to give steering
systems a natural sensation of speed and road surface conditions. In
addition, more complicated autonomous vehicles will require steering wheel
storage and retrieval functions.
▶Product Characteristics
NSK started with a ball screw steering gear and branched out into a variety
of steering components, including steering columns, intermediate shafts,
and joint parts. Recently, we have seen electric power steering (EPS)
contribute to advanced “turning” in automobiles. Force feedback actuators
and road wheel actuators for steer-by-wire systems now incorporate our
cultivated steering technologies. As mentioned, we are working on
steer-by-wire systems that feel natural when steering. We are also making
clear and steady signal transmission control systems that guarantee
functions during a failure. Finally, we are also working on electric tilt and
telescopic functions to allow the steering wheel to be stored, retrieved, and
adjusted.
Force feedback actuator
Road wheel actuator
Traction Reducer
・ Compact, lightweight, ultra-high-speed revolution
EV drive unit with optimized deceleration mechanism
・ Quiet operation with traction drive mechanism
・ Applied technology for mass production of actual
half-toroidal CVT systems
▶Customer Needs and New Technology
EV drive motors need to be compact and light to improve
power consumption and have enough output. If the motor must
support a high number of revolutions per second, improving
energy transmission efficiency in integrated deceleration
mechanisms is even more important. Moreover, motor-driven
vehicles need to be even quieter when running.
▶Product Characteristics
As electric vehicles become more common, the balance
between cost and cruising distance must be addressed. NSK is
moving ahead with a Traction Reducer. Instead of using gears,
this reducer uses a special oil that becomes solid only for a
moment when compressed. The “rolling” that results allows
for more efficient power transmission. This reducer is also
extremely quiet, regardless of revolution speed or torque.
By combining this breakthrough
traction decelerator with a
high-speed motor, overall
electric vehicle drive systems
can be even more compact and
light. The smooth transfer of
power gained through Traction
Reducer also reduces power
consumption.
Concept car using
NSK-developed products
NSK REPORT 2018
19
Complete Picture and Value Creation Story of NSK
2Feature
NSK’s Vision 2026 Initiatives
̶Efforts to Set the Future in Motion Underway Around the World
NSK is working to communicate Vision 2026 to all Group employees around the world and give
shape to its goal of Setting the Future in Motion.
In 2016, NSK celebrated the 100th anniversary of its foundation.
To commemorate this occasion, the 100th Anniversary Committee
and its working level task force the Centennial Projects Team
were established in order to plan and implement a range of
initiatives and events. The main task of this organization was to
develop and promote a new vision for the Company, culminating in
NSK Vision 2026: Setting the Future in Motion. The task of
promoting the Vision was subsequently passed on to a dedicated
organization, the Vision 2026 Office, which was established in April
2017 as part of the Company’s CSR Division Headquarters. In
order to deepen understanding of the NSK Corporate Philosophy
and NSK Vision 2026, and to translate the Vision into real action,
we have appointed regional leaders who are responsible for
coordinating a range of global initiatives. Each leader also works
with team members in their region to develop and implement
original Vision promotion initiatives best suited to their local
cultures and organizational structure. Twice a year all regional
leaders gather together for the Global Vision 2026 Committee,
where they provide updates on progress in their region, discuss
key issues, and consider how to share effective initiatives between
regions.
Communicating the true essence of NSK Vision 2026 to more
than 30,000 Group employees around the world, aligning the
organization in the same direction, and producing concrete
results is no easy feat. Despite the size of the task at hand, the
realization of NSK Vision 2026 is essential for NSK to generate
sustainable value and continue contributing to society. Our quest
to set the future in motion will continue!
Global Vision 2026
Committee
In March 2018, the third Global Vision 2026
Committee was held in Tokyo. The leaders of
Vision initiatives in the Americas, Europe,
ASEAN and Oceania, China, Korea, India, and
Japan gathered to share the progress of
initiatives and discuss the way forward. Each
leader introduced the unique programs in
their region for promoting Vision 2026, as
well as difficulties and hurdles they faced in
doing so. The Committee will continue to
meet on a half-yearly basis, and we are
considering rotating the meeting location
between regions in the future. Each leader is
working together closely to support NSK
Vision 2026 across our global sites. In this
report we introduce some of the unique
initiatives taking place around the world.
20
NSK REPORT 2018
NSK Americas
Train-the-Trainer Toolkit
A specially-designed toolkit managers (trainers) can
use to facilitate Vision workshops with their teams.
NSK ASEAN
Sites across the region have
held workshops, with one site
in Thailand taking the initiative
to hold a two-day forum to
discuss their future goals.
Online Idea Center
One Americas business unit is trialing a program
where employees can submit their ideas for
improving NSK via a designated intranet site.
Outstanding ideas are given support from
management.
Corporate
Philosophy
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.
Ⅱ
Ⅲ
Ⅳ
Common Global Vision Initiatives
Roadmap for Vision Realization
Period
Phase
Understanding Understand Vision
FY2015
Ⅰ
ー
FY2018
Ownership
Positive attitude toward Vision
Concretization
Initiatives starting to take shape
Action
Plans starting to be put in action
Experience
Experience positive change firsthand
FY2019－
Establish as Culture
Behavior and ideas
are firmly established
FY2022－
Refinement
Higher level initiatives put in action
FY2025－
Achievement Vision realized
FY2027－
Next Challenge
NSK Starter Book
Vision Image Movie
Vision Workshops
An easy-to-read handbook
outlining NSK's history,
DNA, and Corporate
Philosophy. Translated into
20 languages and
distributed to employees
across the world.
Designed to inspire and
communicate the spirit
of NSK’s Vision in
visual form (Japanese,
English, and Chinese
versions created)
Provide opportunities to
listen to management’s
outlook, discuss what
an ideal NSK will look
like in 10 years, and
plan next actions.
NSK India
NSK India captured the
creative mindset
required to achieve
Vision 2026 by holding
outdoor workshops in
the traditional gurukul
style.
Vision Puzzle
Vision puzzles
illustrating NSK's role in
society were donated to
local schools. Also used
as a recruiting and
orientation tool.
NSK Japan
“Sense of Motion”
Future Forum
An annual forum which serves as a
platform for creators and innovators at
the forefronts of their respective fields
to network and share their insights with
the general public.
Idea Dojo Project
An open-ended program
where employees are free
to submit innovative ideas
in any field. Promising
ideas are supported
through to realization.
Talk event featuring innovation leaders.
(Nov. 2017, Tokyo Aoyama)
“The World's Best Kitchen Knife”
concept utilized NSK’s materials
and heat treatment technology
to achieve world-class cutting
performance.
NSK REPORT 2018
21
Complete Picture and Value Creation Story of NSK
2Feature
NSK’s Vision 2026 Initiatives
̶Efforts to Set the Future in Motion Underway Around the World
NSK is working to communicate Vision 2026 to all Group employees around the world and give
shape to its goal of Setting the Future in Motion.
In 2016, NSK celebrated the 100th anniversary of its foundation.
with team members in their region to develop and implement
To commemorate this occasion, the 100th Anniversary Committee
original Vision promotion initiatives best suited to their local
and its working level task force the Centennial Projects Team
cultures and organizational structure. Twice a year all regional
were established in order to plan and implement a range of
leaders gather together for the Global Vision 2026 Committee,
initiatives and events. The main task of this organization was to
where they provide updates on progress in their region, discuss
develop and promote a new vision for the Company, culminating in
key issues, and consider how to share effective initiatives between
NSK Vision 2026: Setting the Future in Motion. The task of
regions.
promoting the Vision was subsequently passed on to a dedicated
Communicating the true essence of NSK Vision 2026 to more
organization, the Vision 2026 Office, which was established in April
than 30,000 Group employees around the world, aligning the
2017 as part of the Company’s CSR Division Headquarters. In
organization in the same direction, and producing concrete
order to deepen understanding of the NSK Corporate Philosophy
results is no easy feat. Despite the size of the task at hand, the
and NSK Vision 2026, and to translate the Vision into real action,
realization of NSK Vision 2026 is essential for NSK to generate
we have appointed regional leaders who are responsible for
sustainable value and continue contributing to society. Our quest
coordinating a range of global initiatives. Each leader also works
to set the future in motion will continue!
Global Vision 2026
Committee
In March 2018, the third Global Vision 2026
Committee was held in Tokyo. The leaders of
Vision initiatives in the Americas, Europe,
ASEAN and Oceania, China, Korea, India, and
Japan gathered to share the progress of
initiatives and discuss the way forward. Each
leader introduced the unique programs in
their region for promoting Vision 2026, as
well as difficulties and hurdles they faced in
doing so. The Committee will continue to
meet on a half-yearly basis, and we are
considering rotating the meeting location
between regions in the future. Each leader is
working together closely to support NSK
Vision 2026 across our global sites. In this
report we introduce some of the unique
initiatives taking place around the world.
20
NSK REPORT 2018
NSK Americas
Train-the-Trainer Toolkit
A specially-designed toolkit managers (trainers) can
use to facilitate Vision workshops with their teams.
NSK ASEAN
Sites across the region have
held workshops, with one site
in Thailand taking the initiative
to hold a two-day forum to
discuss their future goals.
Online Idea Center
One Americas business unit is trialing a program
where employees can submit their ideas for
improving NSK via a designated intranet site.
Outstanding ideas are given support from
management.
Corporate
Philosophy
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.
Common Global Vision Initiatives
Roadmap for Vision Realization
Period
Phase
Understanding Understand Vision
FY2015
ー
FY2018
Ownership
Positive attitude toward Vision
Concretization
Initiatives starting to take shape
Action
Plans starting to be put in action
Experience
Experience positive change firsthand
FY2019－
Establish as Culture
Behavior and ideas
are firmly established
FY2022－
Refinement
Higher level initiatives put in action
FY2025－
Achievement Vision realized
FY2027－
Next Challenge
Ⅰ
Ⅱ
Ⅲ
Ⅳ
NSK Starter Book
Vision Image Movie
Vision Workshops
An easy-to-read handbook
outlining NSK's history,
DNA, and Corporate
Philosophy. Translated into
20 languages and
distributed to employees
across the world.
Designed to inspire and
communicate the spirit
of NSK’s Vision in
visual form (Japanese,
English, and Chinese
versions created)
Provide opportunities to
listen to management’s
outlook, discuss what
an ideal NSK will look
like in 10 years, and
plan next actions.
NSK India
NSK India captured the
creative mindset
required to achieve
Vision 2026 by holding
outdoor workshops in
the traditional gurukul
style.
Vision Puzzle
Vision puzzles
illustrating NSK's role in
society were donated to
local schools. Also used
as a recruiting and
orientation tool.
NSK Japan
“Sense of Motion”
Future Forum
An annual forum which serves as a
platform for creators and innovators at
the forefronts of their respective fields
to network and share their insights with
the general public.
Idea Dojo Project
An open-ended program
where employees are free
to submit innovative ideas
in any field. Promising
ideas are supported
through to realization.
Talk event featuring innovation leaders.
(Nov. 2017, Tokyo Aoyama)
“The World's Best Kitchen Knife”
concept utilized NSK’s materials
and heat treatment technology
to achieve world-class cutting
performance.
NSK REPORT 2018
21
Complete Picture and Value Creation Story 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)
Earnings (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
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
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
10.0
45.1
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
8.5
38.4
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
8.7
37.8
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
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
17.6
86.5
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
Exchange
Rate Data
US$1
€1
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
110.86
129.70
*1 In accordance with segment changes in the business domains (part of operations transferred from Industrial Machinery Business to Automotive Business),
*2 Total waste and greenhouse gas emissions data up to the fiscal year ended March 31, 2010, encompass Japan only. Data from the fiscal year ended
*3 The breakdown of the ¥38.0 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 attributable to owners of the parent.
data from the fiscal year ended March 31, 2016 onward, 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.
22
NSK REPORT 2018
NSK REPORT 2018
23
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
18.0
87.7
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
18.2
87.1
173
11.0
4.4
5.2
1.8
36.2
0.51
37.7
37.7
715
24.5
1.2
1.5
(56,090)
(45,262)
52.75
518.56
29.14
591.36
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
19.2
93.9
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
20.1
96.8
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
243,395
705,511
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
20.6
99.1
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
Millions of yen (Financial data)
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
21.1
99.1
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
1,020,338
266,249
723,564
30,524
372,134
155,498
137,856
354,849
212,097
142,752
97,875
－
69,312
68,788
46,785
17,059
83,746
(53,001)
30,744
21,245
－
31,861
20,254
7,726
10.5
22.4
99.7
224
131.16
1,016.30
40.0
9.6
13.9
6.5
49.2
0.22
30.5
30.5
1,426
10.9
1.4
2.8
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
537,175
1,092,310
250,908
Complete Picture and Value Creation Story 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)
Earnings (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 (%)
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
10.0
45.1
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
8.5
38.4
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
8.7
37.8
124
8.82
8.0
1.9
2.0
0.6
31.4
0.73
90.7
90.7
738
83.7
1.6
1.1
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
17.6
86.5
140
11.0
6.1
10.3
3.3
32.6
0.60
22.8
22.8
717
14.8
1.5
1.5
458.65
48.30
475.45
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)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
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
18.0
87.7
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
18.2
87.1
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
19.2
93.9
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
20.1
96.8
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
243,395
705,511
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
20.6
99.1
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
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
1,020,338
266,249
723,564
30,524
372,134
155,498
137,856
354,849
212,097
142,752
97,875
－
69,312
68,788
46,785
17,059
83,746
(53,001)
30,744
21,245
－
461,350
1,043,955
267,399
537,175
1,092,310
250,908
31,501
20,210
7,585
10.7
21.1
99.1
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
31,861
20,254
7,726
10.5
22.4
99.7
224
131.16
1,016.30
40.0
9.6
13.9
6.5
49.2
0.22
30.5
30.5
1,426
10.9
1.4
2.8
Exchange
Rate Data
US$1
€1
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
110.86
129.70
*1 In accordance with segment changes in the business domains (part of operations transferred from Industrial Machinery Business to Automotive Business),
*2 Total waste and greenhouse gas emissions data up to the fiscal year ended March 31, 2010, encompass Japan only. Data from the fiscal year ended
*3 The breakdown of the ¥38.0 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 attributable to owners of the parent.
data from the fiscal year ended March 31, 2016 onward, 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.
22
NSK REPORT 2018
NSK REPORT 2018
23
Complete Picture and Value Creation Story 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 2018.
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)
1,200
1,000
800
600
400
200
0
974.9
975.3
949.2
1,020.3
871.7
14/3
15/3
16/3
17/3
18/3
Sales at NSK topped ¥1 trillion for the first time thanks to strong
demand from machine tools, semiconductors and electric sectors in
the Industrial Machinery Business and volume increase in the
powertrain business in Japan within the Automotive Business.
Operating Income Margin / Gross Profit Margin
- Operating Income Margin - Gross Profit Margin
(%)
25
20
15
10
5
21.3
7.8
23.1
22.5
22.8
22.2
10.0
9.2
9.6
6.9
0
15/3
14/3
16/3
NSK’s operating income margin improved from 6.9% in FY17/3 to 9.6%
in FY18/3 (up 2.7 percentage points) due to strong demand contributing
to enhanced volume, the positive effects from measures to improve
productivity and a reduction in other operating expenses.
18/3
17/3
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
69.3 13.9
9.9
45.6
9.2
31.2
60
40
20
0
14/3
15/3
16/3
17/3
18/3
Earnings per Share /
Cash Dividends per Share, Dividend Payout Ratio
(Yen)
150
120
90
60
30
0
■ Earnings per Share (left)
■ Cash Dividends per Share (left)
-Dividend Payout Ratio (right)
44.1
131.2
114.6
121.4
27.7
57.7
16.0
24.4
28.0
86.1
28.0
30.5
34.0
38.0
40.0
14/3
15/3
16/3
17/3
18/3
(%)
50
40
30
20
10
0
(%)
16
12
8
4
0
Amid an improvement in net income, ROE improved sharply to 13.9%,
topping the 10% target in the Company’s Fifth Mid-Term Management
Plan.
As profits moved higher, earnings per share rose 52% year on year to ¥131.2,
resulting in the cash dividend per share rising ¥2 year on year to ¥40.
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
(¥ Billions)
80
■ Capital Expenditures
■ Depreciation and Amortisation
70
60
50
40
30
20
10
0
68.8
55.0
58.6
43.0
43.4
46.8
45.4
35.1
49.2
38.6
14/3
15/3
16/3
17/3
18/3
(¥ Billions) ■ Interest-Bearing Debt (left)
- Ratio of Net Worth to Total Capital (right)
49.2
500
400
300
200
100
0
40.4
326.4
35.9
315.5
44.0
44.2
278.2
267.4
250.9
14/3
15/3
16/3
17/3
18/3
(%)
50
40
30
20
10
0
NSK invested to improve productivity and expansion of production
capacity in the Automotive Bearings Business and the Industrial
Machinery Business, in response to global demand growth. As a result,
capital expenditures in FY18/3 totaled ¥68.8 billion, an increase of ¥10.2
billion from the previous year.
The Company continued to reduce interest-bearing debt in FY18/3.
NSK increased the ratio of net worth to total capital to 49.2%, allowing
stable and continuous shareholder returns while also ensuring
financial stability.
24
NSK REPORT 2018
NSK REPORT 2018
25
30,000
25,000
20,000
15,000
10,000
5,000
0
0.8
0.6
0.4
0.2
0
(%)
10
5
0
-5
-10
-15
-20
-25
-30
-35
Number of Employees Worldwide /
Ratio of Overseas Employees
(Persons)
35,000
■ Japan ■ The Americas ■ Europe ■ Asia (left)
- Ratio of Overseas Employees (right)
30,454
31,088
31,587
31,501
31,861
63.1
64.5
64.3
64.2
63.6
Ratio of Female Employees
- Japan - Global
17.3
17.617.617.617.6
17.6
10.7＊1
10.5
6.6
6.9
7.0
(%)
100
75
50
25
0
(%)
20
15
10
5
0
14/3
15/3
16/3
17/3
18/3
14/3
15/3
16/3
17/3
18/3
The Company increased the number of full-time Group workers by 360
from the end of FY17/3 to 31,861 at the end of FY18/3 thanks to efforts to
optimize employment to meet demand and enhancing the number of
technical workers.
NSK is striving to expand work options and provide career advancement
programs for female employees. The ratio of female workers at NSK was
10.5% in Japan and 17.6% on a global basis. For more information, please
see Promoting the Advancement of Women in the Workplace on P. 52.
*1 Data include the subsidiary acquired in 2016.
Lost-Worktime Injury Rate
- Japan - Global
Number of Patents Held
■ Japan ■ Outside Japan
0.70
0.68
0.80
0.44
0.34
0.32
0.28
0.59
0.23
6,000
5,718
6,097
6,275
6,430
6,987
14/3
15/3
16/3
17/3
18/3
14/3
15/3
16/3
17/3
18/3
Thanks to strengthened workplace safety initiatives, the lost-time
injury rate is on a declining trend both in Japan and globally. For
additional information on NSK's safety management efforts, please
see P. 49.
Toward realizing the goals (Innovation & Challenge, Setting the Future
in Motion) in the Fifth Mid-Term Management Plan, NSK is
strengthening technical development. Showing a year-on-year
increase, patent possession grew to 6,987 patents in FY18/3.
Manufacturing in Japan ーManufacturing outside Japan*2 ーDistribution in Japan*2
14/3
15/3
16/3
17/3
18/3
(Accumulated No. of Products*)
202
211
190
219
224
-4.8
-5.7
-21.0
-5.8
-10.2
-8.5
-9.5
-10.4
-11.4
-11.4
-27.9
-29.6
-29.6
-6.6
-14.5
-26.1
Thanks to ongoing improvements in productivity and the introduction of energy-
efficient machinery, greenhouse gas emissions related to production dropped
14.5% in Japan and 26.1% outside of Japan. Distribution-related greenhouse gas
emissions in Japan declined by 6.6%. For additional information, please see
Environmental Management on P. 50.
*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 made retroactive revisions based on a revision to the method used
in the calculation of greenhouse gas emissions per production unit.
14/3
15/3
16/3
17/3
18/3
NSK developed five new products in FY18/3, bringing the total number
of environmentally friendly products to 224. For more details, please
see Developing Environmentally Friendly Products on P. 51.
*Cumulative data from the year ended March 31, 2003.
(Patents)
8,000
4,000
2,000
0
250
200
150
100
50
0
Complete Picture and Value Creation Story 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 2018.
974.9
975.3
949.2
1,020.3
871.7
Operating Income Margin / Gross Profit Margin
- Operating Income Margin - Gross Profit Margin
23.1
22.5
22.8
22.2
21.3
7.8
10.0
9.2
9.6
6.9
14/3
15/3
16/3
17/3
18/3
14/3
15/3
16/3
17/3
18/3
Sales at NSK topped ¥1 trillion for the first time thanks to strong
demand from machine tools, semiconductors and electric sectors in
the Industrial Machinery Business and volume increase in the
powertrain business in Japan within the Automotive Business.
NSK’s operating income margin improved from 6.9% in FY17/3 to 9.6%
in FY18/3 (up 2.7 percentage points) due to strong demand contributing
to enhanced volume, the positive effects from measures to improve
productivity and a reduction in other operating expenses.
Net Income Attributable to Owners of the Parent /
Earnings per Share /
ROE
(¥ Billions)
- ROE (right)
■ Net Income Attributable to Owners of the Parent (left)
15.3
62.0
14.3
65.7
69.3 13.9
9.9
45.6
9.2
31.2
Cash Dividends per Share, Dividend Payout Ratio
■ Earnings per Share (left)
■ Cash Dividends per Share (left)
-Dividend Payout Ratio (right)
44.1
131.2
114.6
121.4
27.7
57.7
16.0
24.4
28.0
86.1
28.0
30.5
34.0
38.0
40.0
(%)
16
12
8
4
0
14/3
15/3
16/3
17/3
18/3
14/3
15/3
16/3
17/3
18/3
Amid an improvement in net income, ROE improved sharply to 13.9%,
topping the 10% target in the Company’s Fifth Mid-Term Management
As profits moved higher, earnings per share rose 52% year on year to ¥131.2,
resulting in the cash dividend per share rising ¥2 year on year to ¥40.
(¥ Billions)
■ Capital Expenditures
■ Depreciation and Amortisation
68.8
55.0
58.6
43.0
43.4
46.8
45.4
35.1
49.2
38.6
(¥ Billions) ■ Interest-Bearing Debt (left)
- Ratio of Net Worth to Total Capital (right)
49.2
44.0
44.2
40.4
326.4
35.9
315.5
278.2
267.4
250.9
Net Sales
(¥ Billions)
1,200
1,000
800
600
400
200
0
Plan.
80
60
40
20
0
80
70
60
50
40
30
20
10
0
(%)
25
20
15
10
5
0
(Yen)
150
120
90
60
30
0
500
400
300
200
100
0
(%)
50
40
30
20
10
0
(%)
50
40
30
20
10
0
14/3
15/3
16/3
17/3
18/3
14/3
15/3
16/3
17/3
18/3
NSK invested to improve productivity and expansion of production
capacity in the Automotive Bearings Business and the Industrial
Machinery Business, in response to global demand growth. As a result,
capital expenditures in FY18/3 totaled ¥68.8 billion, an increase of ¥10.2
billion from the previous year.
The Company continued to reduce interest-bearing debt in FY18/3.
NSK increased the ratio of net worth to total capital to 49.2%, allowing
stable and continuous shareholder returns while also ensuring
financial stability.
24
NSK REPORT 2018
Number of Employees Worldwide /
Ratio of Overseas Employees
(Persons)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
■ Japan ■ The Americas ■ Europe ■ Asia (left)
- Ratio of Overseas Employees (right)
30,454
31,088
31,587
31,501
31,861
63.1
64.5
64.3
64.2
63.6
14/3
15/3
16/3
17/3
18/3
Ratio of Female Employees
- Japan - Global
17.3
17.617.617.617.6
17.6
10.7＊1
10.5
6.6
6.9
7.0
(%)
100
75
50
25
0
(%)
20
15
10
5
0
The Company increased the number of full-time Group workers by 360
from the end of FY17/3 to 31,861 at the end of FY18/3 thanks to efforts to
optimize employment to meet demand and enhancing the number of
technical workers.
Lost-Worktime Injury Rate
- Japan - Global
0.8
0.6
0.4
0.2
0
0.70
0.68
0.80
0.44
0.34
0.32
0.28
0.59
0.23
14/3
15/3
16/3
17/3
18/3
14/3
15/3
16/3
17/3
18/3
NSK is striving to expand work options and provide career advancement
programs for female employees. The ratio of female workers at NSK was
10.5% in Japan and 17.6% on a global basis. For more information, please
see Promoting the Advancement of Women in the Workplace on P. 52.
*1 Data include the subsidiary acquired in 2016.
Number of Patents Held
■ Japan ■ Outside Japan
(Patents)
8,000
6,000
5,718
6,097
6,275
6,430
6,987
4,000
2,000
0
14/3
15/3
16/3
17/3
18/3
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
Thanks to strengthened workplace safety initiatives, the lost-time
injury rate is on a declining trend both in Japan and globally. For
additional information on NSK's safety management efforts, please
see P. 49.
Toward realizing the goals (Innovation & Challenge, Setting the Future
in Motion) in the Fifth Mid-Term Management Plan, NSK is
strengthening technical development. Showing a year-on-year
increase, patent possession grew to 6,987 patents in FY18/3.
Manufacturing in Japan ーManufacturing outside Japan*2 ーDistribution in Japan*2
16/3
14/3
18/3
15/3
17/3
(%)
10
5
0
-5
-10
-15
-20
-25
-30
-35
-4.8
-5.7
-21.0
-5.8
-10.2
-8.5
-9.5
-10.4
-11.4
-11.4
-27.9
-29.6
-29.6
-6.6
-14.5
-26.1
Thanks to ongoing improvements in productivity and the introduction of energy-
efficient machinery, greenhouse gas emissions related to production dropped
14.5% in Japan and 26.1% outside of Japan. Distribution-related greenhouse gas
emissions in Japan declined by 6.6%. For additional information, please see
Environmental Management on P. 50.
*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 made retroactive revisions based on a revision to the method used
in the calculation of greenhouse gas emissions per production unit.
(Accumulated No. of Products*)
250
200
150
100
50
0
202
211
190
219
224
14/3
15/3
16/3
17/3
18/3
NSK developed five new products in FY18/3, bringing the total number
of environmentally friendly products to 224. For more details, please
see Developing Environmentally Friendly Products on P. 51.
*Cumulative data from the year ended March 31, 2003.
NSK REPORT 2018
25
Performance and Strategies of Corporate Value Creation
Looking Back on Past Mid-Term Management Plans
Outline of the Fifth Mid-Term Management Plan
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)
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
The Fifth MTP
(Year to March 31, 2017-Year to March 31, 2019)
Under the banner of NSK Vision 2026: Setting the Future in Motion, the NSK Group formulated its new Fifth MTP, which covers the three-year period
from the fiscal year ended March 2017 to the fiscal year ending March 2019.
Positioning the Fifth MTP period as the first three years for embarking on a new chapter in the evolution toward the next 100 years, the Company
will advance initiatives supported by two main policy pillars: operational excellence as well as innovate and challenge. With these two policies, NSK
targets the three management tasks of “achieving sustainable growth,” “reconstructing its profit base” and “expanding into new growth fields.”
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
Reconstructing the 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
Strategies by Business
Numerical Targets
Industrial Machinery Business
Respond to Changes in the Business Environment and
Net sales
Expand Target Fields
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
For Progress regarding the Fifth MTP, please see P. 32.
Operating income
Net income
(attributable to owners of the parent)
Operating income margin
ROE
Net D/E ratio
Exchange rate
Capital expenditures
(including intangible assets)
R&D expenses (on a statutory basis)
FY2018
(Initial plan)
¥1 trillion
¥100 billion
¥70 billion
10.0%
10.0% or more
0.3 times
US$ =
¥105
Euro = ¥120
1RMB = ¥16.7
FY2016 – FY2018
Initial plan
¥180 billion
¥130 billion
¥40 billion
Automotive Business
Reinforce Profit Base and Establish Platform for Future Growth
● Expand drivetrain business, achieve growth with accompanying profitability
Operational Excellence
● Expand customer portfolio for EPS
Innovate and Challenge
autonomous driving)
● Develop lower-assist EPS
● Respond to the technology evolution (high efficiency, electrification,
Depreciation and amortisation
For Progress regarding the Fifth MTP, please see P. 36.
For Progress regarding the Fifth MTP, please see PP. 28 -29.
In the year ended March 31, 2018, the second year of the Fifth MTP, the global economy remained strong in every region. Amid
favorable demand, the Company focused on maximizing output and achieved its final year sales target of ¥1 trillion one year
ahead of plan, while simultaneously setting new highs for operating income and net income. For the fiscal year ending March 31,
2019, we believe it important to maintain focus on changes in the operating environment due to trade friction and geopolitical
risks, though the operating environment at present remains favorable. In the fiscal year ending March 31, 2019, the last year of
the Fifth MTP, we remain focused on progress in meeting priority targets and will continue to work to assure operating income of
¥100 billion and an operating income margin in double digits.
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26
NSK REPORT 2018
NSK REPORT 2018
27
Performance and Strategies of Corporate Value Creation
Looking Back on Past Mid-Term Management Plans
Outline of the Fifth Mid-Term Management Plan
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)
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
The Fifth MTP
(Year to March 31, 2017-Year to March 31, 2019)
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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
Under the banner of NSK Vision 2026: Setting the Future in Motion, the NSK Group formulated its new Fifth MTP, which covers the three-year period
from the fiscal year ended March 2017 to the fiscal year ending March 2019.
Positioning the Fifth MTP period as the first three years for embarking on a new chapter in the evolution toward the next 100 years, the Company
will advance initiatives supported by two main policy pillars: operational excellence as well as innovate and challenge. With these two policies, NSK
targets the three management tasks of “achieving sustainable growth,” “reconstructing its profit base” and “expanding into new growth fields.”
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
Reconstructing the 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
Strategies by Business
Numerical Targets
Industrial Machinery Business
Respond to Changes in the Business Environment and
Expand Target Fields
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
For Progress regarding the Fifth MTP, please see P. 32.
Automotive Business
Reinforce Profit Base and Establish Platform for Future Growth
Operational Excellence
● Expand drivetrain business, achieve growth with accompanying profitability
● Expand customer portfolio for EPS
Innovate and Challenge
● Respond to the technology evolution (high efficiency, electrification,
autonomous driving)
● Develop lower-assist EPS
Net sales
Operating income
Net income
(attributable to owners of the parent)
Operating income margin
ROE
Net D/E ratio
Exchange rate
Capital expenditures
(including intangible assets)
Depreciation and amortisation
R&D expenses (on a statutory basis)
FY2018
(Initial plan)
¥1 trillion
¥100 billion
¥70 billion
10.0%
10.0% or more
0.3 times
¥105
US$ =
Euro = ¥120
1RMB = ¥16.7
FY2016 – FY2018
Initial plan
¥180 billion
¥130 billion
¥40 billion
For Progress regarding the Fifth MTP, please see P. 36.
For Progress regarding the Fifth MTP, please see PP. 28 -29.
In the year ended March 31, 2018, the second year of the Fifth MTP, the global economy remained strong in every region. Amid
favorable demand, the Company focused on maximizing output and achieved its final year sales target of ¥1 trillion one year
ahead of plan, while simultaneously setting new highs for operating income and net income. For the fiscal year ending March 31,
2019, we believe it important to maintain focus on changes in the operating environment due to trade friction and geopolitical
risks, though the operating environment at present remains favorable. In the fiscal year ending March 31, 2019, the last year of
the Fifth MTP, we remain focused on progress in meeting priority targets and will continue to work to assure operating income of
¥100 billion and an operating income margin in double digits.
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26
NSK REPORT 2018
NSK REPORT 2018
27
Performance and Strategies of Corporate Value Creation
Progress of Mid-Term Management Plan
Business Trends (JP-GAAP up to and including the Fourth MTP, IFRS from the Fifth MTP onward)
Net Sales
(¥ Billions)
1,000
■ Actual ■ Target ■ Forecast
974.9
975.3
949.2
940.0
871.7
1,020.3 1,000.0 1,020.0
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
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
■ Actual ■ Target ■ Forecast
97.3
94.7
86.0
97.9
100.0 98.0
Operating Income
(¥ Billions)
100
80
60
40
20
0
74.0
69.3
62.4
42.6
22.1
11.3
66.0
68.0
65.3
43.5
44.4
32.4
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
第2次中計期間
Period of Second MTP
第3次中計期間
Period of Third MTP
第4次中計期間
Period of Fourth MTP
第5次中計期間
Period of Fifth MTP
Net Income
(¥ Billions)
■ Actual ■ Target ■ Forecast
100
80
60
40
20
0
69.3
70.0 69.0
62.0
67.2
52.0
45.6
42.6
44.5
34.9
25.6
26.1
28.5
37.0
31.2
15.7
4.6
4.8
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
The Fifth Mid-Term Management Plan
Capital Expenditures/R&D Expenditures
Fourth MTP
(Actual)
Fifth MTP
(Initial Plan)
Fifth MTP
(Revised Forecast)
Capital Expenditures
(including intangible assets)
¥149.0 billion
¥180.0 billion
¥212.4 billion
Depreciation and Amortisation
¥115.3 billion
¥130.0 billion
¥140.1 billion
R&D Expenditures
(on statutory basis)
¥31.7 billion
¥40.0 billion
¥48.9 billion
28
NSK REPORT 2018
The Second and Third Mid-Term
Management Plans (hereinafter MTP)
did not meet their final-year numerical
targets due to the impact from the
collapse of Lehman Brothers in 2008
and the subsequent global financial
crisis, and sharp yen appreciation and
demand shifts, respectively. On the
other hand, the Fourth MTP met its
targets, with sales exceeding ¥900
billion, topping levels seen in the past.
NSK achieved the net sales
target of ¥1 trillion in its Fifth MTP in
the second year of the plan (FY18/3).
The Company forecasts sales in the
FY19/3 of ¥1.02 trillion.
As with sales, the company did not meet
its operating income targets in the final
year of the Second and Third MTPs but
exceeded the final-year operating income
target in the Fourth Plan.
NSK shifted its accounting standard
to IFRS from the Fifth MTP. Operating
income in FY17/3 decreased substantially
from the previous fiscal year as one-time
costs are recorded in operating income at
IFRS. However, the Company booked a
record ¥97.9 billion in operating income
in FY18/3. NSK forecasts operating
income in FY19/3 of ¥98.0 billion, which is
just short of the MTP target of ¥100.0
billion, though we are making every effort
to reach that target.
NSK was able to maintain positive
net income during FY09/3-FY10/3,
when the global financial crisis was
at its height.
Past trends show net income
remaining at a strong level since the
Fourth MTP.
NSK booked net income of
¥69.3 billion in FY18/3, which
alongside net sales and operating
income set a record high for the
Company. We will continue our
efforts to maximize profit.
We have lifted our total capital
expenditures forecast for the Fifth
MTP by ¥32.4 billion to ¥212.4 billion,
factoring in not only capex to improve
productivity but also enhanced capex
in automotive powertrains, where
demand continues to expand, and in
industrial machinery, where demand is
more robust than expected.
We have also lifted our forecast
for R&D expenditures by ¥8.9 billion to
¥48.9 billion in line with the need to
develop new technologies and
products contributing to sustainable
growth moving forward.
4.4
14.0
5.2
0.51
0.50
(％)
10.0
8.0
6.0
4.0
2.0
0
ROE
(％)
20.0
15.0
10.0
5.0
0
1.0
0.8
0.6
0.4
0.2
0
200
150
100
50
0
Operating Income Margin
10.0
8.7
9.0
10.0
9.7
9.1
8.5
7.8
ー Actual Target
10.0
9.6
9.6
(Forecast)
6.8
6.1
6.1
6.9
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
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
ー Actual Target
16.1
15.0
14.0
12.1
10.3
10.6
15.3
14.9
13.0
13.9
10.0
9.2
9.9
1.8
09/3
2.0
10/3
06/3
07/3
08/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
Net D/E Ratio
(Times)
ー Actual Target
0.73
0.69
0.73
0.56
0.60
0.58
0.85
0.40
0.41
0.31
0.40
0.23
0.28
0.22
0.30
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
Movements in Exchange Rates (￥/US$) (￥/Euro)
ー Actual (￥/US$) ー Actual (￥/Euro) Assumed
162.2
150.4
137.4
110.4
116.9
114.6
108.0
144.5
136.0
100.7
130.9
112.9
109.4
120.0
134.4
138.8
132.6
120.1
129.7
118.8
125.0
107.1
90.0
109.9
100.2
120.0
90.0
120.0
105.0
108.4
110.9
105.0
92.8
85.6
79.0
83.1
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
NSK is working on achieving its
double-digit operating income margin
target. Over the past 10 years or so, the
Company’s operating income margin has
risen steadily thanks to improvement of
profitability in the Automotive Business,
as well as expansion of business in China
and other Asian countries.
NSK estimates an operating income
margin of 9.6% compared with 10%,
which was the original target for FY19/3,
the final year of the Fifth MTP. In line with
operating income, we continue to target
an operating income margin in double
digits.
NSK views ROE as an important
management target. As shown with
operating income and the operating
income margin, ROE dipped to the low
single digits in FY09/3-FY10/3 due to the
impact from the global financial crisis
and in FY13/3 due to weak demand and
the impact from sharp yen appreciation.
However, ROE in other years
exceeded capital costs and trended
between 9% and 16%. Building on a
firm financial position, we continue to
balance capital allocation, including
investment for growth, with shareholder
returns and remain maintaining ROE at
10% or higher.
We believe sustainable growth at NSK
requires a stable financial base. While
the Company’s net D/E ratio has
reached 0.7x–0.8x in the past, it has
improved and declined steadily since
the Third MTP, during which the
collapse of Lehman Brothers and the
global financial crisis occurred.
As a result of strengthening
capital through profits (cash) and
reducing interest-bearing debt, the
latest net D/E ratio has reduced 0.22x,
less than 0.3x the Fifth MTP numerical
target.
Historical trends of the major currencies
U.S. dollar and euro are shown in the
graph to the left.
Earnings at Japanese companies
are often affected by yen appreciation
and depreciation, but NSK has been
working to free itself from the impact of
forex fluctuations by promoting localized
procurement and production in areas of
demand.
Regarding exports of products from
Japan, the exchange rate sensitivity of
one yen fluctuation to our annual
operating income is about ¥450 million
for U.S. dollar and ¥200 million for euro.
NSK REPORT 2018
29
Performance and Strategies of Corporate Value Creation
Progress of Mid-Term Management Plan
Business Trends (JP-GAAP up to and including the Fourth MTP, IFRS from the Fifth MTP onward)
Net Sales
(¥ Billions)
1,000
■ Actual ■ Target ■ Forecast
1,020.3 1,000.0 1,020.0
974.9
975.3
949.2
940.0
871.7
772.0
740.0
717.2
710.4
733.2
780.0
732.8
628.5
647.6
587.6
800
600
400
200
0
80
60
40
20
0
100
80
60
40
20
0
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
Operating Income
(¥ Billions)
100
74.0
69.3
62.4
42.6
43.5
44.4
32.4
22.1
11.3
■ Actual ■ Target ■ Forecast
97.9
100.0 98.0
97.3
94.7
86.0
66.0
68.0
65.3
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
第2次中計期間
Period of Third MTP
第3次中計期間
Period of Fourth MTP
第4次中計期間
Period of Fifth MTP
第5次中計期間
Net Income
(¥ Billions)
■ Actual ■ Target ■ Forecast
69.3
70.0 69.0
62.0
67.2
52.0
45.6
42.6
44.5
34.9
25.6
26.1
28.5
37.0
31.2
15.7
4.6
4.8
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
The Fifth Mid-Term Management Plan
Capital Expenditures/R&D Expenditures
Fourth MTP
(Actual)
Fifth MTP
(Initial Plan)
Fifth MTP
(Revised Forecast)
Capital Expenditures
(including intangible assets)
¥149.0 billion
¥180.0 billion
¥212.4 billion
Depreciation and Amortisation
¥115.3 billion
¥130.0 billion
¥140.1 billion
R&D Expenditures
(on statutory basis)
¥31.7 billion
¥40.0 billion
¥48.9 billion
28
NSK REPORT 2018
The Second and Third Mid-Term
Management Plans (hereinafter MTP)
did not meet their final-year numerical
targets due to the impact from the
collapse of Lehman Brothers in 2008
and the subsequent global financial
crisis, and sharp yen appreciation and
demand shifts, respectively. On the
other hand, the Fourth MTP met its
targets, with sales exceeding ¥900
billion, topping levels seen in the past.
NSK achieved the net sales
target of ¥1 trillion in its Fifth MTP in
the second year of the plan (FY18/3).
The Company forecasts sales in the
FY19/3 of ¥1.02 trillion.
As with sales, the company did not meet
its operating income targets in the final
year of the Second and Third MTPs but
exceeded the final-year operating income
target in the Fourth Plan.
NSK shifted its accounting standard
to IFRS from the Fifth MTP. Operating
income in FY17/3 decreased substantially
from the previous fiscal year as one-time
costs are recorded in operating income at
IFRS. However, the Company booked a
record ¥97.9 billion in operating income
in FY18/3. NSK forecasts operating
income in FY19/3 of ¥98.0 billion, which is
just short of the MTP target of ¥100.0
billion, though we are making every effort
to reach that target.
NSK was able to maintain positive
net income during FY09/3-FY10/3,
when the global financial crisis was
at its height.
Past trends show net income
remaining at a strong level since the
Fourth MTP.
NSK booked net income of
¥69.3 billion in FY18/3, which
alongside net sales and operating
income set a record high for the
Company. We will continue our
efforts to maximize profit.
We have lifted our total capital
expenditures forecast for the Fifth
MTP by ¥32.4 billion to ¥212.4 billion,
factoring in not only capex to improve
productivity but also enhanced capex
in automotive powertrains, where
demand continues to expand, and in
industrial machinery, where demand is
more robust than expected.
We have also lifted our forecast
for R&D expenditures by ¥8.9 billion to
¥48.9 billion in line with the need to
develop new technologies and
products contributing to sustainable
growth moving forward.
Operating Income Margin
(％)
10.0
8.7
9.0
10.0
9.7
9.1
8.5
7.8
ー Actual Target
10.0
9.6
9.6
(Forecast)
6.8
6.1
6.1
6.9
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
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
ー Actual Target
16.1
15.0
14.0
12.1
15.3
14.9
13.0
13.9
10.0
9.2
9.9
10.3
10.6
14.0
5.2
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
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
10.0
8.0
6.0
4.0
2.0
0
ROE
(％)
20.0
15.0
10.0
5.0
0
Net D/E Ratio
(Times)
1.0
ー Actual Target
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
0.28
0.22
0.30
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
Movements in Exchange Rates (￥/US$) (￥/Euro)
ー Actual (￥/US$) ー Actual (￥/Euro) Assumed
200
150
100
50
0
162.2
150.4
144.5
136.0
130.9
116.9
114.6
108.0
100.7
137.4
110.4
112.9
109.4
92.8
85.6
79.0
83.1
134.4
138.8
120.0
107.1
90.0
109.9
100.2
132.6
120.1
129.7
118.8
125.0
120.0
90.0
108.4
110.9
105.0
120.0
105.0
06/3
07/3
08/3
09/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3 (Plan)
Period of Second MTP
Period of Third MTP
Period of Fourth MTP
Period of Fifth MTP
NSK is working on achieving its
double-digit operating income margin
target. Over the past 10 years or so, the
Company’s operating income margin has
risen steadily thanks to improvement of
profitability in the Automotive Business,
as well as expansion of business in China
and other Asian countries.
NSK estimates an operating income
margin of 9.6% compared with 10%,
which was the original target for FY19/3,
the final year of the Fifth MTP. In line with
operating income, we continue to target
an operating income margin in double
digits.
NSK views ROE as an important
management target. As shown with
operating income and the operating
income margin, ROE dipped to the low
single digits in FY09/3-FY10/3 due to the
impact from the global financial crisis
and in FY13/3 due to weak demand and
the impact from sharp yen appreciation.
However, ROE in other years
exceeded capital costs and trended
between 9% and 16%. Building on a
firm financial position, we continue to
balance capital allocation, including
investment for growth, with shareholder
returns and remain maintaining ROE at
10% or higher.
We believe sustainable growth at NSK
requires a stable financial base. While
the Company’s net D/E ratio has
reached 0.7x–0.8x in the past, it has
improved and declined steadily since
the Third MTP, during which the
collapse of Lehman Brothers and the
global financial crisis occurred.
As a result of strengthening
capital through profits (cash) and
reducing interest-bearing debt, the
latest net D/E ratio has reduced 0.22x,
less than 0.3x the Fifth MTP numerical
target.
Historical trends of the major currencies
U.S. dollar and euro are shown in the
graph to the left.
Earnings at Japanese companies
are often affected by yen appreciation
and depreciation, but NSK has been
working to free itself from the impact of
forex fluctuations by promoting localized
procurement and production in areas of
demand.
Regarding exports of products from
Japan, the exchange rate sensitivity of
one yen fluctuation to our annual
operating income is about ¥450 million
for U.S. dollar and ¥200 million for euro.
NSK REPORT 2018
29
Performance and Strategies of Corporate Value Creation
Review of Operations
Industrial Machinery Business
Business Overview
The Industrial Machinery Business is involved in operations related to two
product categories, namely industrial machinery bearings and precision
machinery and parts. The industrial machinery bearings business
comprises three subsegments: 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 100 bearings, which are used in general
appliances such as vacuum cleaners and washing machines.
Meanwhile, the precision machinery and parts business supplies
linear motion parts including ball screws and NSK Linear GuidesTM that
play an important role in linear motion and mechatronic products such as
XY Tables and MEGATORQUE MOTORTM that employ ultra-high precision
positioning and controlling technologies. In this way, the Company supports
a wide range of fields, including machine tools, injection molding machines,
industrial robots, semiconductor and LCD production equipment, conveying
machines and medical devices.
Leveraging the synergistic effect of bearings and precision machinery,
NSK is also developing new proposals that will contribute to the greater
performance of industrial equipment, as well as sophisticated solutions
based on CMS (Condition Monitoring System) for greater machinery and
equipment reliability and for preventive maintenance.
Specific Features of Industrial Machinery Business Refer to P. 15 for information on the shared features of the
Industrial Machinery Business and the Automotive Business.
Customers
● Machinery manufacturers in Japan and overseas (excluding automotive), distributors and sales outlets
● 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
Sales Breakdown by Product (Year ended March 31, 2018)
Semiconductor and
LCD Production
Equipment
Machine
Tools and
Injection
Molding
Machines
8
Other
8
6
Precision
Machinery and
Parts
22％
Industrial Machinery Bearings
78％
29
32
General
Machinery
OEM
Year-on-year
comparison
+17.3%
Net sales
¥266.2 billion
Aftermarket
(Maintenance)
17
Electrical
and IT Equipment
Sales Breakdown by Region
(Year ended March 31, 2018)
Other Asia
14％
China
22％
Japan
33％
Europe
17％
The Americas
14％
NSK Products: Playing a Key Role in an Array of Industries
Wind Turbines
Railways
Double-row cylindrical roller bearing
with oil bath lubrication for railway axle
Home Appliances
Large spherical
roller bearings
for wind turbine
main shaft
Long life ball bearings
Three rows integrated
cylindrical bearings
for wind turbine gearbox
Machine Tools
Ball screws for
high-speed machine
tools HMS Series
High-speed
Integrated Motor
Spindle for
Machining Centers
Mining and Construction
Steel
Industrial Motors
NSK Linear GuidesTM
Roller Guide RA Series
NSKHPSTM Spherical
roller bearings
Long-life, optimized cylindrical
roller bearings for continuous
casting machines
New ceramic coated insulating
bearings for industrial motors
Semiconductor Production Equipment
Pumps and Compressors
Robots
NSK Linear GuidesTM
NH Series, NS Series
NSKHPSTM High load capacity
angular contact ball bearings
Highly functional thin-section
angular contact ball bearings
30
NSK REPORT 2018
NSK REPORT 2018
31
Performance and Strategies of Corporate Value Creation
Review of Operations
Industrial Machinery Business
Business Overview
The Industrial Machinery Business is involved in operations related to two
appliances such as vacuum cleaners and washing machines.
product categories, namely industrial machinery bearings and precision
Meanwhile, the precision machinery and parts business supplies
machinery and parts. The industrial machinery bearings business
linear motion parts including ball screws and NSK Linear GuidesTM that
comprises three subsegments: general machinery, which manufactures
play an important role in linear motion and mechatronic products such as
bearings for applications in a wide range of industries such as machine
XY Tables and MEGATORQUE MOTORTM that employ ultra-high precision
tools, steel plant facilities, railcars, construction machinery, chemical
positioning and controlling technologies. In this way, the Company supports
plants, industrial pumps and wind turbines; electrical and IT equipment,
a wide range of fields, including machine tools, injection molding machines,
which includes home appliances, office equipment, hard disk drives (HDDs)
industrial robots, semiconductor and LCD production equipment, conveying
and general-purpose motors; and the aftermarket business, which provides
machines and medical devices.
maintenance and repair services. Industrial machinery bearings come in a
Leveraging the synergistic effect of bearings and precision machinery,
range of sizes, from bearings with an outer diameter of approximately 2
NSK is also developing new proposals that will contribute to the greater
mm that are incorporated into ultra-small motors to bearings with an outer
performance of industrial equipment, as well as sophisticated solutions
diameter of more than 2 m that are utilized in wind turbines. The typical
based on CMS (Condition Monitoring System) for greater machinery and
household contains around 100 bearings, which are used in general
equipment reliability and for preventive maintenance.
Specific Features of Industrial Machinery Business Refer to P. 15 for information on the shared features of the
Industrial Machinery Business and the Automotive Business.
Customers
Features of
Customers
and NSK
Businesses
NSK’s
Competitive
Advantages
● Machinery manufacturers in Japan and overseas (excluding automotive), distributors and sales outlets
● 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
Sales Breakdown by Product (Year ended March 31, 2018)
Other
Sales Breakdown by Region
(Year ended March 31, 2018)
Semiconductor and
LCD Production
Equipment
6
8
8
Precision
Machinery and
Parts
22％
Year-on-year
comparison
+17.3%
Machine
Tools and
Injection
Molding
Machines
Net sales
¥266.2 billion
Industrial Machinery Bearings
78％
29
32
General
Machinery
OEM
Aftermarket
(Maintenance)
17
Electrical
and IT Equipment
Other Asia
14％
China
22％
Japan
33％
Europe
17％
The Americas
14％
NSK Products: Playing a Key Role in an Array of Industries
Wind Turbines
Railways
Double-row cylindrical roller bearing
with oil bath lubrication for railway axle
Home Appliances
Large spherical
roller bearings
for wind turbine
main shaft
Three rows integrated
cylindrical bearings
for wind turbine gearbox
Machine Tools
Long life ball bearings
Ball screws for
high-speed machine
tools HMS Series
High-speed
Integrated Motor
Spindle for
Machining Centers
Mining and Construction
Steel
Industrial Motors
NSK Linear GuidesTM
Roller Guide RA Series
NSKHPSTM Spherical
roller bearings
Long-life, optimized cylindrical
roller bearings for continuous
casting machines
New ceramic coated insulating
bearings for industrial motors
Semiconductor Production Equipment
Pumps and Compressors
Robots
NSK Linear GuidesTM
NH Series, NS Series
NSKHPSTM High load capacity
angular contact ball bearings
Highly functional thin-section
angular contact ball bearings
30
NSK REPORT 2018
NSK REPORT 2018
31
Performance and Strategies of Corporate Value Creation
Review of Operations
Industrial Machinery Business
The Fifth Mid-Term Management Plan: Initiative Status and Initiatives for the Final Fiscal Year
A Look Back at the Business Conditions for the Year ended March 31, 2018, and the Forecast for the Year ending March 31, 2019
The key initiatives being taken under the Fifth Mid-Term Management Plan in the Industrial Machinery Business are 1) rebuilding
competitiveness and improving profitability through the strengthening of product appeal, 2) expanding NSK’s presence and share
in focus sectors for which growth is anticipated over the medium to long term and 3) creating new added value and demand that
captures evolving technological needs.
Key Initiatives
Respond to Changes in the Business
Environment and Expand Target Fields
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
Measures Geared toward Key Initiatives
① 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.
② 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.
③ 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.
Initiative Status
During the second half of the fiscal year ended March 31, 2017, the first year of the Mid-Term Management Plan, demand recovered at a faster rate than
the limited degree of recovery expected at the time the Plan was formulated. During the fiscal year ended March 31, 2018, the second year of the Plan,
demand remained strong in many sectors, including machine tools, semiconductors, home appliances, industrial motors, servo motors and robot-related
sectors. Under these business conditions, production was extremely active for major products, including precision bearings, ball screws and other various
types of products. To firmly link the outcome of this strong demand to earnings, NSK is advancing initiatives designed to maximize output.
Operational Excellence
Innovate and Challenge
NSK is undertaking initiatives to enhance the competitiveness of the
sectors and products that comprise the core of its business. To address
the strong demand for these, the Company has been reinforcing
human resources, advancing production at optimal locations around
the world and expanding facility capacity. In addition, by focusing on
high-value-added products and high-margin sectors, NSK is working
to improve its portfolio and enhance profitability.
Planned as a small-lot plant that is highly resistant to fluctuations in
demand, in September 2017 NSK completed construction of a new building at
the Fujisawa (Kirihara) plant in Japan and initiated operations of a smart factory
model line. Along with introducing the latest robot-based production systems,
advancing automation and enhancing production capacity, NSK has been
working to establish a system that can flexibly address fluctuations in demand.
NSK has been working to grow businesses that deliver product defect
diagnosis services via CMS (Condition Monitoring System), thereby
contributing to stable operations, enhanced productivity and the
transition to smart factories.
Moreover, the Company is advancing initiatives to develop new
products that harness the synergy created by bearings and linear
motion technology, including seismic mitigation actuator units for
buildings and other structures and for high-speed railways.
The evolution of IoT, AI and other technologies holds the potential
to change the structure, mechanisms and way in which industrial
machinery are used. Along with predicting the direction in which the
world will head next, NSK also is searching out business opportunities
in new fields.
Initiatives for the Final Year and the Next Mid-Term Management Plan
The Industrial Machinery Business’s performance tends to be affected by movements in demand that result from changes in business conditions, in
light of which NSK is working to strengthen its ability to respond to changes in market conditions and thereby evolve its business structure into one that
is resilient to fluctuations in demand. Based on plans for facility capacity that assume a certain degree of fluctuation in demand, the Company is
working to create a business structure that can absorb this fluctuation to the greatest degree possible.
Moreover, IoT, AI, robotics and other technological innovations are starting to create significant demand for semiconductors, electronic devices and
machinery parts, while at the same time leading to the emergence of changes in the demand structure and economic cycles unlike those of the past. To
expand its presence on the market over the medium to long term, NSK will focus on these growth sectors and expand businesses that add to earnings.
Targeting the highest level of performance in history during the year ending March 31, 2019, following on the recovery in
demand during the year ended March 31, 2018
■ Industrial Machinery Bearings
■ Precision Machinery and Parts
■ Operating Income (left)
- Operating Income Margin (right)
Operating Income/Operating Income Margin
Net Sales
(¥ Billions)
300
200
100
0
276.4
44.0
232.4
266.2
57.4
283.0
63.0
243.4
41.7
226.9
42.7
201.7
184.3
208.9
220.0
13.4
38.0
10.6
28.3
12.4
34.4
8.3
20.2
6.5
14.7
(¥ Billions)
60
50
40
30
20
10
0
(％)
15.0
12.0
9.0
6.0
3.0
0
15/3
16/3
17/3
18/3 19/3(Forecast)
15/3
16/3
17/3
18/3
19/3(Forecast)
IFRS standards from FY16/3 onward
Coinciding with solid demand, the year ended March 31, 2018, saw higher volumes and widespread growth in both net sales and operating income.
Looking at the results by region, Japan saw higher profits, primarily in the sales for machine tools and electrical sectors, whereas the Americas
saw an increase in sales for the semiconductor production equipment and general machinery sectors. Meanwhile, Europe also saw higher
earnings, primarily from sales for the machine tools and aftermarket sectors. China saw solid growth in sales for the electrical and aftermarket
sectors, whereas other Asian countries continued to see a recovery in demand centered on semiconductor production equipment sector, which led
to higher earnings.
operating income margin reached 10.6%.
As a result, net sales totaled ¥266.2 billion (a year-on-year increase of 17.3%), operating income totaled ¥28.3 billion (up 93.3%) and the
The year ending March 31, 2019, is also expected to see a continuation of strong demand. As such, NSK is working to streamline and enhance
the supply system, expand output and maximize sales. Performance for the full period is anticipated to achieve net sales of ¥283.0 billion (a
year-on-year increase of 6.3%), operating income of ¥38.0 billion (a year-on-year increase of 34.1%) and an operating income margin of 13.4%.
Business Risks and Opportunities, Future Policies
1
Economic Fluctuation Risks
2
Globalization and Tough Competitive Environment
The Industrial Machinery Business maintains a presence in a wide
Rapid changes in the market environment, such as an increasingly
array of sectors, but business performance tends to be affected by
tough competitive environment and the global expansion of our
cyclical fluctuations in the overall economic environment. In addition,
customers, can be said to present risks. In particular, there is the
the precision machinery and parts sector has high sales weightings
possibility that the intensifying rivalry in emerging markets with local
in semiconductor production equipment and machine tools, so is
manufacturers and those from developed countries will affect the
affected by fluctuations in demand from these sectors. While these
NSK Group’s business performance. Despite this situation, NSK will
are unavoidable risks for NSK, the Company places emphasis on
aim to maintain and expand its global market share and ensure high
formulating accurate estimates of demand, building a production
profitability by setting itself apart from the competition through the
structure and systems that can properly address changes in
delivery of value based on its ability to propose products,
demand, and bolstering its cost competitiveness. Moreover, NSK is
technologies and solutions that are enabled specifically by its years
taking steps to alleviate the impact of demand declines in fields it is
of accumulated market results in the high-quality bearing sector.
highly dependent on by increasing sales weightings in the general
machinery and aftermarket fields, demand for both of which is
broad. In the aftermarket sector, for which high profitability is
expected, NSK aims to increase its presence, implement sales
channel policies with enhanced quality and advance initiatives to
strengthen its MRO (maintenance) business. The Company is also
focusing on entering the growing CMS (Condition Monitoring System)
market.
32
NSK REPORT 2018
NSK REPORT 2018
33
Performance and Strategies of Corporate Value Creation
Review of Operations
Industrial Machinery Business
The key initiatives being taken under the Fifth Mid-Term Management Plan in the Industrial Machinery Business are 1) rebuilding
competitiveness and improving profitability through the strengthening of product appeal, 2) expanding NSK’s presence and share
in focus sectors for which growth is anticipated over the medium to long term and 3) creating new added value and demand that
captures evolving technological needs.
Key Initiatives
Respond to Changes in the Business
Environment and Expand Target Fields
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
Measures Geared toward Key Initiatives
① 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.
② 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.
③ 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.
Initiative Status
During the second half of the fiscal year ended March 31, 2017, the first year of the Mid-Term Management Plan, demand recovered at a faster rate than
the limited degree of recovery expected at the time the Plan was formulated. During the fiscal year ended March 31, 2018, the second year of the Plan,
demand remained strong in many sectors, including machine tools, semiconductors, home appliances, industrial motors, servo motors and robot-related
sectors. Under these business conditions, production was extremely active for major products, including precision bearings, ball screws and other various
types of products. To firmly link the outcome of this strong demand to earnings, NSK is advancing initiatives designed to maximize output.
Operational Excellence
Innovate and Challenge
NSK is undertaking initiatives to enhance the competitiveness of the
NSK has been working to grow businesses that deliver product defect
sectors and products that comprise the core of its business. To address
diagnosis services via CMS (Condition Monitoring System), thereby
the strong demand for these, the Company has been reinforcing
contributing to stable operations, enhanced productivity and the
human resources, advancing production at optimal locations around
transition to smart factories.
the world and expanding facility capacity. In addition, by focusing on
Moreover, the Company is advancing initiatives to develop new
high-value-added products and high-margin sectors, NSK is working
products that harness the synergy created by bearings and linear
to improve its portfolio and enhance profitability.
motion technology, including seismic mitigation actuator units for
Planned as a small-lot plant that is highly resistant to fluctuations in
buildings and other structures and for high-speed railways.
demand, in September 2017 NSK completed construction of a new building at
The evolution of IoT, AI and other technologies holds the potential
the Fujisawa (Kirihara) plant in Japan and initiated operations of a smart factory
to change the structure, mechanisms and way in which industrial
model line. Along with introducing the latest robot-based production systems,
machinery are used. Along with predicting the direction in which the
advancing automation and enhancing production capacity, NSK has been
world will head next, NSK also is searching out business opportunities
working to establish a system that can flexibly address fluctuations in demand.
in new fields.
Initiatives for the Final Year and the Next Mid-Term Management Plan
The Industrial Machinery Business’s performance tends to be affected by movements in demand that result from changes in business conditions, in
light of which NSK is working to strengthen its ability to respond to changes in market conditions and thereby evolve its business structure into one that
is resilient to fluctuations in demand. Based on plans for facility capacity that assume a certain degree of fluctuation in demand, the Company is
working to create a business structure that can absorb this fluctuation to the greatest degree possible.
Moreover, IoT, AI, robotics and other technological innovations are starting to create significant demand for semiconductors, electronic devices and
machinery parts, while at the same time leading to the emergence of changes in the demand structure and economic cycles unlike those of the past. To
expand its presence on the market over the medium to long term, NSK will focus on these growth sectors and expand businesses that add to earnings.
The Fifth Mid-Term Management Plan: Initiative Status and Initiatives for the Final Fiscal Year
A Look Back at the Business Conditions for the Year ended March 31, 2018, and the Forecast for the Year ending March 31, 2019
Targeting the highest level of performance in history during the year ending March 31, 2019, following on the recovery in
demand during the year ended March 31, 2018
Net Sales
Operating Income/Operating Income Margin
■ Industrial Machinery Bearings
■ Precision Machinery and Parts
■ Operating Income (left)
- Operating Income Margin (right)
(¥ Billions)
300
200
100
0
276.4
44.0
232.4
266.2
57.4
283.0
63.0
243.4
41.7
226.9
42.7
201.7
184.3
208.9
220.0
15/3
16/3
17/3
18/3 19/3(Forecast)
(¥ Billions)
60
50
40
30
20
10
0
13.4
38.0
10.6
28.3
12.4
34.4
8.3
20.2
6.5
14.7
15/3
16/3
17/3
18/3
19/3(Forecast)
(％)
15.0
12.0
9.0
6.0
3.0
0
IFRS standards from FY16/3 onward
Coinciding with solid demand, the year ended March 31, 2018, saw higher volumes and widespread growth in both net sales and operating income.
Looking at the results by region, Japan saw higher profits, primarily in the sales for machine tools and electrical sectors, whereas the Americas
saw an increase in sales for the semiconductor production equipment and general machinery sectors. Meanwhile, Europe also saw higher
earnings, primarily from sales for the machine tools and aftermarket sectors. China saw solid growth in sales for the electrical and aftermarket
sectors, whereas other Asian countries continued to see a recovery in demand centered on semiconductor production equipment sector, which led
to higher earnings.
As a result, net sales totaled ¥266.2 billion (a year-on-year increase of 17.3%), operating income totaled ¥28.3 billion (up 93.3%) and the
operating income margin reached 10.6%.
The year ending March 31, 2019, is also expected to see a continuation of strong demand. As such, NSK is working to streamline and enhance
the supply system, expand output and maximize sales. Performance for the full period is anticipated to achieve net sales of ¥283.0 billion (a
year-on-year increase of 6.3%), operating income of ¥38.0 billion (a year-on-year increase of 34.1%) and an operating income margin of 13.4%.
Business Risks and Opportunities, Future Policies
1
Economic Fluctuation Risks
2
Globalization and Tough Competitive Environment
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. Despite this situation, NSK will
aim to maintain and expand its global market share and ensure high
profitability by setting itself apart from the competition through the
delivery of value based on its ability to propose products,
technologies and solutions that are enabled specifically by its years
of accumulated market results in the high-quality bearing sector.
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 has high sales weightings
in semiconductor production equipment and machine tools, so is
affected by fluctuations in demand from these sectors. 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 properly 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. In the aftermarket sector, for which high profitability is
expected, NSK aims to increase its presence, implement sales
channel policies with enhanced quality and advance initiatives to
strengthen its MRO (maintenance) business. The Company is also
focusing on entering the growing CMS (Condition Monitoring System)
market.
32
NSK REPORT 2018
NSK REPORT 2018
33
Performance and Strategies of Corporate Value Creation
Review of Operations
Automotive Business
Business Overview
NSK Products: Supporting Automobile Running, Turning and Stopping
Comprised of the two categories of automotive bearings and
automotive components, the Automotive Business delivers various
products that support the three critical elements of automobiles,
namely running, turning and stopping.
Automobiles utilize many different types of NSK bearings,
including hub unit bearings and needle roller bearings. As automobiles
have evolved, automotive bearings have come to demand a greater
level of performance, including less friction loss, smaller size, lighter
weight, higher speed and less noise. Through more sophisticated
automotive bearings, including bearing grease and seals that leverage
its core technologies of tribology, materials and numerical simulation,
NSK continues to develop products that contribute to the evolution of
automobiles.
Meanwhile, in the automotive component field, NSK delivers a
wide range of core functional components, including electric power
steering (EPS), automatic transmission (AT) products, as well as ball
screws for electric brake boosters. In addition to the primary
column-type EPS, the Company is promoting the development of a
rack-type EPS to expand its product lineup. AT products are seeing
greater demand against the backdrop of improved automobile fuel
efficiency and comfort, whereas ball screws are seeing greater demand
against the backdrop of improved safety.
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 currently
accelerating. By building on the elemental technologies the Company
has accumulated thus far and by developing new technologies, NSK
will contribute to technical innovation for automobiles.
Specific Features of Automotive Business
Refer to page P. 15 for information on the shared features of the Industrial
Machinery Business and the Automotive Business.
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
Sales Breakdown by Product (Year ended March 31, 2018)
Sales Breakdown by Region
(Year ended March 31, 2018)
Hub Unit
Bearings
14
10
Automatic
Transmission
Components
Year-on-year
comparison
+3.9%
Net sales
¥723.6 billion
10
Needle
Roller
Bearings
Automotive
Bearings
49％
Automotive
Components
51％
41
Other
25
Other Asia
14％
China
21％
Japan
37％
Steering
Products
Europe
12％
The Americas
16％
34
NSK REPORT 2018
Running
Hub Unit Bearings
Running
Transmission Products
Automotive Bearings
Automotive Bearings
Automotive Components
Hub unit bearings are
fundamental components
that 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)
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
Clutch assembly
gears (cage and roller assembly),
optimized high efficiency
Pinion shaft
Turning
Electric Power Steering (EPS)
Automotive Components
With the recent trend in advanced
driving assistance and autonomous
driving, electric power steering
systems are 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.
Automotive Components
Stopping
Ball Screws for Electric Brakes
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. The ball screw is a promising type among
several types of electric brake boosters. NSK, putting to use
its global No. 1 share of ball screw technology, will continue
Column-type electric power steering
Rack-type electric power steering
Running
Bearings for Power Source/Electric Components
Automotive Bearings
Against a backdrop of the demand for greater environmental
performance as a social issue, there is an ongoing shift toward the
electrification of automotive components 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.
to contribute to raising the level of safety in the brake field.
brakes
Bearings for alternators
Bearings for in-vehicle motors
Ball screws for electric
Automotive Bearings
Automotive Components
Running
Products for Hybrid Systems
Against the backdrop of stricter environmental regulations in countries throughout the world, the
demand for improved automobile fuel efficiency and power saving performance has led to the expanded
introduction of new energy vehicles (electric vehicles, hybrid vehicles, plug-in hybrid vehicles).
NSK provides advanced bearings and a newly developed pawl-type one-way clutch as the power
transmission system for hybrid vehicles.
Next generation of Creep-FreeTM
Pawl-type one-way clutch
bearings for hybrid and electric
vehicles
NSK REPORT 2018
35
Performance and Strategies of Corporate Value Creation
Review of Operations
Automotive Business
Comprised of the two categories of automotive bearings and
wide range of core functional components, including electric power
automotive components, the Automotive Business delivers various
steering (EPS), automatic transmission (AT) products, as well as ball
products that support the three critical elements of automobiles,
screws for electric brake boosters. In addition to the primary
namely running, turning and stopping.
column-type EPS, the Company is promoting the development of a
Automobiles utilize many different types of NSK bearings,
rack-type EPS to expand its product lineup. AT products are seeing
including hub unit bearings and needle roller bearings. As automobiles
greater demand against the backdrop of improved automobile fuel
have evolved, automotive bearings have come to demand a greater
efficiency and comfort, whereas ball screws are seeing greater demand
level of performance, including less friction loss, smaller size, lighter
against the backdrop of improved safety.
weight, higher speed and less noise. Through more sophisticated
Structural changes in automobiles from a technical standpoint,
automotive bearings, including bearing grease and seals that leverage
such as power source diversification and the evolution of vehicle
its core technologies of tribology, materials and numerical simulation,
dynamics controls geared toward autonomous driving, are currently
NSK continues to develop products that contribute to the evolution of
accelerating. By building on the elemental technologies the Company
automobiles.
has accumulated thus far and by developing new technologies, NSK
Meanwhile, in the automotive component field, NSK delivers a
will contribute to technical innovation for automobiles.
Specific Features of Automotive Business
Refer to page P. 15 for information on the shared features of the Industrial
Machinery Business and the Automotive Business.
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
Sales Breakdown by Product (Year ended March 31, 2018)
Sales Breakdown by Region
(Year ended March 31, 2018)
Hub Unit
Bearings
14
10
Automatic
Transmission
Components
Year-on-year
comparison
+3.9%
Net sales
¥723.6 billion
10
Needle
Roller
Bearings
Other
25
Automotive
Bearings
Automotive
Components
49％
51％
41
Other Asia
14％
China
21％
Japan
37％
Steering
Products
Europe
12％
The Americas
16％
34
NSK REPORT 2018
Business Overview
NSK Products: Supporting Automobile Running, Turning and Stopping
Running
Hub Unit Bearings
Running
Transmission Products
Automotive Bearings
Automotive Bearings
Automotive Components
Hub unit bearings are
fundamental components
that 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)
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
Turning
Electric Power Steering (EPS)
Automotive Components
With the recent trend in advanced
driving assistance and autonomous
driving, electric power steering
systems are 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.
Automotive Components
Stopping
Ball Screws for Electric Brakes
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. The ball screw is a promising type among
several types of electric brake boosters. 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.
Column-type electric power steering
Rack-type electric power steering
Running
Bearings for Power Source/Electric Components
Automotive Bearings
Against a backdrop of the demand for greater environmental
performance as a social issue, there is an ongoing shift toward the
electrification of automotive components 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.
Ball screws for electric
brakes
Bearings for alternators
Bearings for in-vehicle motors
Automotive Bearings
Automotive Components
Running
Products for Hybrid Systems
Against the backdrop of stricter environmental regulations in countries throughout the world, the
demand for improved automobile fuel efficiency and power saving performance has led to the expanded
introduction of new energy vehicles (electric vehicles, hybrid vehicles, plug-in hybrid vehicles).
NSK provides advanced bearings and a newly developed pawl-type one-way clutch as the power
transmission system for hybrid vehicles.
Next generation of Creep-FreeTM
bearings for hybrid and electric
vehicles
Pawl-type one-way clutch
NSK REPORT 2018
35
Performance and Strategies of Corporate Value Creation
Review of Operations
Automotive Business
The Fifth Mid-Term Management Plan: Initiative Status and Initiatives for the Final Fiscal Year
A Look Back at the Business Conditions for the Year Ended March 31, 2018, and the Forecast for the Year Ending March 31, 2019
To address the rapid advancements of innovation in automotive technology, at the start of the Fifth Mid-Term Management Plan NSK reorganized its Automotive
Business structure from an organization based on its products into the following two-division HQ system: the Automotive Powertrain Division Headquarters, which
oversees business related to the electrification of components and improving power transmission efficiency, and the Steering & Actuator Division Headquarters,
which oversees business in fields related to vehicle dynamics control. The Powertrain Business is working to expand business in fields related to automatic
transmission, for which demand is increasing, and is working to capture new demand that is arising from the spread of component electrification. Meanwhile, the
Steering & Actuator Business is working to expand the EPS customer base, enhance the product lineup and develop new core products for the future.
Key Initiatives
Reinforce Profit Base and
Establish Platform for Future Growth
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
Measures Geared toward Key Initiatives
① 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.
② 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.
Initiative Status
The AT Business has been expanding against the backdrop of a higher ratio of automatic transmission equipped vehicles and the shift to multistep transmissions.
In response to the continuation of strong demand for the future, NSK constructed a needle roller bearing plant in South Korea and an AT component plant in
Mexico, which went into operation in 2017. Specifically, these plants were built to enhance production capacity and ensure stable supply. In heading toward the next
stage of growth, the EPS Business has been working to expand the customer base for column-type EPS while at the same time advancing the development of
rack-type EPS. As one of its new core products, NSK kicked off mass-production for new projects related to electric brake booster ball screws in 2018.
Operational Excellence
Innovate and Challenge
To further enhance efficiency, the performance required by AT-related products
has become more sophisticated. Moreover, the progress of component
electrification has led to the emergence of the need for high-performance
bearings designed for new in-vehicle motor applications. By developing new
products that harness the unique technological capabilities of NSK, the Company
is working to capture expanding demand and link this to growth that adds to
earnings. Moreover, in terms of EPS, NSK has been improving quality design and
efficiency by standardizing the development process and enhancing productivity
through the automation of plants based on the use of robots. NSK also is working
to enhance cost competitiveness and product appeal, capture new orders,
develop new customers and establish a foundation for renewed growth.
One of NSK’s moves on the organizational front has been to establish the Automotive
Technology Development Center, which has taken charge of advanced developments and
product design, to more quickly and precisely address the rapid developments in automotive
technology. Similarly, the Company is moving beyond the conventional frameworks that exist for
each product and application to develop products that envision the entire vehicle.
While increasing the number of orders for electric brake booster ball screws, mentioned
earlier, NSK also has received orders for hub unit bearings that leverage low-friction
technologies for a new electric vehicle mass production model. In addition, the Company is
progressing with the development of new technologies and products that anticipate the shift to
electric vehicles (EVs) and the development of autonomous driving. In this light, NSK exhibited
the Traction Reducer, Wheel Hub Motor Fit and Parallel Link type Active Suspension among
other items, at motor shows as a way of making proposals for a new era of automobiles.
Initiatives for the Final Year and the Next Mid-Term Management Plan
The global automotive market is expected to grow approximately 3% year on year. In this light, NSK will promote continued growth in the Automotive Business, with a focus on the powertrain
business and enhance profitability through greater productivity and lower fixed costs. As a means of addressing growing demand, the new facility under construction (scheduled for completion
in the fall of 2018) at the Haruna plant in Gunma Prefecture, Japan will serve as a base for the needle roller bearing manufacturing division, as well as a base for the development divisions for
press processing technology and needle roller bearing manufacturing technology. In bringing together several design development and manufacturing engineering departments, NSK is driving
greater efficiency and shortening development cycles, developing new products that capture a new set of needs on the automotive market and advancing manufacturing innovation.
NSK is also accelerating development of applications for rack-type EPS to capture orders at an early stage. The Company is working to further expand orders for electric brake booster
ball screws in response to the outlook for greater demand stemming from global trends, such as the movement to make automobile emergency braking systems mandatory and to equip these
as standard items on all vehicles.
As ongoing initiatives for technological development in anticipation of the next Mid-Term Management Plan and beyond, NSK is aiming to expand business by contributing to the shift to
electric vehicles, autonomous driving and other new automotive technologies.
36
NSK REPORT 2018
80
60
40
20
0
(％)
10.0
8.0
6.0
4.0
2.0
0
Net Sales
(¥ Billions)
800
600
400
200
0
Pursuing net sales that exceed the mid-term targets during the year ending March 31, 2019, following
on the record high net sales achieved during the year ended March 31, 2018
■ Automotive Bearings
■ Automotive Components
■ Operating Income (left)
- Operating Income Margin (right)
Operating Income/Operating Income Margin
705.5
696.3
723.6
706.0
657.0
350.6
374.8
368.3
372.6
343.5
(¥ Billions)
100
10.0
10.0
9.3
9.1
70.8
65.7
64.6
66.0
7.8
55.0
306.4
330.7
328.0
350.9
362.5
15/3
16/3
17/3
18/3 19/3(Forecast)
15/3
16/3
17/3
18/3
19/3(Forecast)
*IFRS standards from FY16/3 onward
Although the global automotive market remained at the same level as the previous year during the year ended March 31, 2018, as a result of the positive trend
in the powertrain business in Japan, the Automotive Business recorded its highest levels of net sales to date. Despite higher material prices and such leading
to cost increases, efforts to enhance productivity and reduce expenses enabled NSK to maintain an operating income margin in 9-percent-plus range.
Looking at regions outside of Japan, the Americas saw lower earnings as a result of a slowdown in the U.S. automotive market. Meanwhile, Europe saw
higher earnings in response to solid automobile sales. In China, the increase in sales was slight, partially due to a change in product mix. Meanwhile sales in
other Asian countries rose, primarily in India.
As a result, net sales in the Automotive Business totaled ¥723.6 billion (a year-on-year increase of 3.9%), operating income totaled ¥66.0 billion (a
year-on-year increase of 2.1%) and the operating income margin reached 9.1%.
During the year ending March 31, 2019, NSK expects to see net sales of ¥706.0 billion (a year-on-year decrease of 2.4%), operating income of ¥55.0 billion
(a year-on-year decrease of 16.6%) and an operating income margin of 7.8%. Despite an outlook for sales decline in EPS as a result of model changes and
increased R&D and other expenses, NSK will continue to work to ensure steady earnings through the powertrain business and undertake productivity
enhancing initiatives.
Business Risks and Opportunities, Future Policies
1
Structural Changes in the Automotive Industry
2
Product Liabilities Arising from Recalls and Other Factors
The industrial structure for automobiles has entered an era of upheaval. In
NSK Group products are utilized in many industrial fields and end
terms of power sources, the industry is expected to see diversification away
products. Particularly for automobiles that require high functionality,
from only gasoline and diesel vehicles of the past, to hybrid, plug-in hybrid,
in the event of defects that lead to product liability, there is the risk
electric and fuel cell vehicles. The technologies related to autonomous
that this could lead to the incurrence of significant costs or a decline
driving also continue to evolve, with an outlook for progress in establishing
in the Company’s social responsibility. In recognition of the
the environment for commercialization. Moreover, links between
importance of quality, the NSK Group has established systems
automobiles and communication devices and networks will create new
designed to ensure high quality and utilizes insurance that allows a
businesses, while more options will emerge for the way in which
certain level of risk coverage. Continuing to redouble its efforts
automobiles are used. For example, the concept of sharing in place of
regarding quality and safety in the years to come, the Company’s
ownership already has begun to proliferate.
policy is to give these areas sufficient consideration.
Although these changes in the business structure encompassing
automobiles could pose risks for NSK, at the same time they can also be
interpreted as an opportunity for business expansion. In response to the
comfort, safety and environmental performance demanded in association
with the increased sophistication of automotive technologies, NSK is adding
to its expertise and wide-ranging technologies accumulated over 100 years
of business operations through continued research and development aimed
at achieving further growth of the Automotive Business.
NSK REPORT 2018
37
Performance and Strategies of Corporate Value Creation
Review of Operations
Automotive Business
To address the rapid advancements of innovation in automotive technology, at the start of the Fifth Mid-Term Management Plan NSK reorganized its Automotive
Business structure from an organization based on its products into the following two-division HQ system: the Automotive Powertrain Division Headquarters, which
oversees business related to the electrification of components and improving power transmission efficiency, and the Steering & Actuator Division Headquarters,
which oversees business in fields related to vehicle dynamics control. The Powertrain Business is working to expand business in fields related to automatic
transmission, for which demand is increasing, and is working to capture new demand that is arising from the spread of component electrification. Meanwhile, the
Steering & Actuator Business is working to expand the EPS customer base, enhance the product lineup and develop new core products for the future.
Key Initiatives
Reinforce Profit Base and
Establish Platform for Future Growth
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
Measures Geared toward Key Initiatives
① 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.
② 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.
Initiative Status
The AT Business has been expanding against the backdrop of a higher ratio of automatic transmission equipped vehicles and the shift to multistep transmissions.
In response to the continuation of strong demand for the future, NSK constructed a needle roller bearing plant in South Korea and an AT component plant in
Mexico, which went into operation in 2017. Specifically, these plants were built to enhance production capacity and ensure stable supply. In heading toward the next
stage of growth, the EPS Business has been working to expand the customer base for column-type EPS while at the same time advancing the development of
rack-type EPS. As one of its new core products, NSK kicked off mass-production for new projects related to electric brake booster ball screws in 2018.
Operational Excellence
Innovate and Challenge
To further enhance efficiency, the performance required by AT-related products
One of NSK’s moves on the organizational front has been to establish the Automotive
has become more sophisticated. Moreover, the progress of component
Technology Development Center, which has taken charge of advanced developments and
electrification has led to the emergence of the need for high-performance
product design, to more quickly and precisely address the rapid developments in automotive
bearings designed for new in-vehicle motor applications. By developing new
technology. Similarly, the Company is moving beyond the conventional frameworks that exist for
products that harness the unique technological capabilities of NSK, the Company
each product and application to develop products that envision the entire vehicle.
is working to capture expanding demand and link this to growth that adds to
While increasing the number of orders for electric brake booster ball screws, mentioned
earnings. Moreover, in terms of EPS, NSK has been improving quality design and
earlier, NSK also has received orders for hub unit bearings that leverage low-friction
efficiency by standardizing the development process and enhancing productivity
technologies for a new electric vehicle mass production model. In addition, the Company is
through the automation of plants based on the use of robots. NSK also is working
progressing with the development of new technologies and products that anticipate the shift to
to enhance cost competitiveness and product appeal, capture new orders,
electric vehicles (EVs) and the development of autonomous driving. In this light, NSK exhibited
develop new customers and establish a foundation for renewed growth.
the Traction Reducer, Wheel Hub Motor Fit and Parallel Link type Active Suspension among
other items, at motor shows as a way of making proposals for a new era of automobiles.
Initiatives for the Final Year and the Next Mid-Term Management Plan
The global automotive market is expected to grow approximately 3% year on year. In this light, NSK will promote continued growth in the Automotive Business, with a focus on the powertrain
business and enhance profitability through greater productivity and lower fixed costs. As a means of addressing growing demand, the new facility under construction (scheduled for completion
in the fall of 2018) at the Haruna plant in Gunma Prefecture, Japan will serve as a base for the needle roller bearing manufacturing division, as well as a base for the development divisions for
press processing technology and needle roller bearing manufacturing technology. In bringing together several design development and manufacturing engineering departments, NSK is driving
greater efficiency and shortening development cycles, developing new products that capture a new set of needs on the automotive market and advancing manufacturing innovation.
NSK is also accelerating development of applications for rack-type EPS to capture orders at an early stage. The Company is working to further expand orders for electric brake booster
ball screws in response to the outlook for greater demand stemming from global trends, such as the movement to make automobile emergency braking systems mandatory and to equip these
As ongoing initiatives for technological development in anticipation of the next Mid-Term Management Plan and beyond, NSK is aiming to expand business by contributing to the shift to
as standard items on all vehicles.
electric vehicles, autonomous driving and other new automotive technologies.
36
NSK REPORT 2018
The Fifth Mid-Term Management Plan: Initiative Status and Initiatives for the Final Fiscal Year
A Look Back at the Business Conditions for the Year Ended March 31, 2018, and the Forecast for the Year Ending March 31, 2019
Pursuing net sales that exceed the mid-term targets during the year ending March 31, 2019, following
on the record high net sales achieved during the year ended March 31, 2018
■ Automotive Bearings
■ Automotive Components
■ Operating Income (left)
- Operating Income Margin (right)
Operating Income/Operating Income Margin
Net Sales
(¥ Billions)
800
600
400
200
0
705.5
696.3
723.6
706.0
657.0
350.6
374.8
368.3
372.6
343.5
306.4
330.7
328.0
350.9
362.5
15/3
16/3
17/3
18/3 19/3(Forecast)
(¥ Billions)
100
10.0
10.0
9.3
9.1
80
60
40
20
0
70.8
65.7
64.6
66.0
7.8
55.0
15/3
16/3
17/3
18/3
19/3(Forecast)
(％)
10.0
8.0
6.0
4.0
2.0
0
*IFRS standards from FY16/3 onward
Although the global automotive market remained at the same level as the previous year during the year ended March 31, 2018, as a result of the positive trend
in the powertrain business in Japan, the Automotive Business recorded its highest levels of net sales to date. Despite higher material prices and such leading
to cost increases, efforts to enhance productivity and reduce expenses enabled NSK to maintain an operating income margin in 9-percent-plus range.
Looking at regions outside of Japan, the Americas saw lower earnings as a result of a slowdown in the U.S. automotive market. Meanwhile, Europe saw
higher earnings in response to solid automobile sales. In China, the increase in sales was slight, partially due to a change in product mix. Meanwhile sales in
other Asian countries rose, primarily in India.
As a result, net sales in the Automotive Business totaled ¥723.6 billion (a year-on-year increase of 3.9%), operating income totaled ¥66.0 billion (a
year-on-year increase of 2.1%) and the operating income margin reached 9.1%.
During the year ending March 31, 2019, NSK expects to see net sales of ¥706.0 billion (a year-on-year decrease of 2.4%), operating income of ¥55.0 billion
(a year-on-year decrease of 16.6%) and an operating income margin of 7.8%. Despite an outlook for sales decline in EPS as a result of model changes and
increased R&D and other expenses, NSK will continue to work to ensure steady earnings through the powertrain business and undertake productivity
enhancing initiatives.
Business Risks and Opportunities, Future Policies
1
Structural Changes in the Automotive Industry
2
Product 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 coverage. Continuing to redouble its efforts
regarding quality and safety in the years to come, the Company’s
policy is to give these areas sufficient consideration.
The industrial structure for automobiles has entered an era of upheaval. In
terms of power sources, the industry is expected to see diversification away
from only gasoline and diesel vehicles of the past, to hybrid, plug-in hybrid,
electric and fuel cell vehicles. The technologies related to autonomous
driving also continue to evolve, with an outlook for progress in establishing
the environment for commercialization. Moreover, links between
automobiles and communication devices and networks will create new
businesses, while more options will emerge for the way in which
automobiles are used. For example, the concept of sharing in place of
ownership already has begun to proliferate.
Although these changes in the business structure encompassing
automobiles could pose risks for NSK, at the same time they can also be
interpreted as an opportunity for business expansion. In response to the
comfort, safety and environmental performance demanded in association
with the increased sophistication of automotive technologies, NSK is adding
to its expertise and wide-ranging technologies accumulated over 100 years
of business operations through continued research and development aimed
at achieving further growth of the Automotive Business.
NSK REPORT 2018
37
Performance and Strategies of Corporate Value Creation
Financial Strategy / Policy on Shareholder Returns
Financial Position
Shareholder Returns
NSK’s financial position for the fiscal year ended March 31, 2018, as well as an evaluation and comments on the position compared with the
previous year, are as follows.
Alongside growth investment, the Fifth Mid-Term Management Plan focuses
In addition to returning profits through dividends, NSK recognizes
on enhancing returns provided to shareholders, and the current plan is the
share buybacks as one of the choices available in its financial and capital
Due to increased profit, ROE was 13.9%, reaching a double-digit figure for the first time in two fiscal years; the ratio of net worth to total
first to set a numerical dividend payout ratio target̶of approximately 30%.
policy. In the duration of the Fifth Mid-Term Management Plan, NSK
capital was 49.2%; and the net D/E ratio was 0.22 times, results that enhanced an already sound financial position.
2017/3
2018/3
Year-on-year
comparison
Evaluation and comments
Total assets
1,044.0 billion
1,092.3 billion
＋48.4 billion
Expanding business scale
Shareholders’ equity
Equity attributable to
( )
owners of the parent
Cash and
cash equivalents
461.4 billion
537.2 billion
＋75.8 billion
139.6 billion
131.3 billion
-8.3 billion
Expansion due to retention of part of
net income as internal reserves and
other factors
Decrease due to increases in working
capital and capital expenditures,
decrease in interest-bearing debt
Interest-bearing debt
267.4 billion
250.9 billion
-16.5 billion
Continued reduction of interest-bearing debt
Ratio of net worth
to total capital
Net D/E ratio
ROE
44.2％
49.2％
＋5.0
percentage points
Due to increase in shareholders’ equity
with the cost of capital.
0.28 times
0.22 times
-0.06
Less than the MTP target of 0.3 times
9.9％
13.9％
＋4.0
percentage points
Increase in accordance with increased
profit exceeded the MTP target
(10% or more)
A Stable Financial Base
NSK plans to conduct growth investment (¥212.4 billion [revised
FCST] over the three-year period of the Fifth Mid-Term
Management Plan) to achieve medium- to long-term increases in
corporate value and regards the stabilization of its financial base as
paramount in the payment of ongoing dividends to shareholders.
NSK recognizes that maintaining an A-level credit rating and a net
Rating and Investment
Information, Inc. (R&I)
A
Japan Credit Rating Agency, Ltd.
(JCR)
A＋
D/E ratio of around 0.3 times are the minimum base requirements
needed to ensure NSK’s financial stability.
NSK has been able to steadily improve its ability to generate
cash flow over the past several years, resulting in a sharp
improvement in NSK’s financial structure. (Please see the 11-year
summary on P. 22.) NSK has received high evaluations from rating
agencies, including an upgrade to an A rating from Rating and
Investment Information, Inc. (R&I), in August 2014 after being rated
at A-, and maintaining an A+ rating from Japan Credit Rating
Agency, Ltd. (JCR), since September 2006.
For the fiscal year ended March 2018, NSK was able to bring about an
implemented a share buyback amounting to ¥15 billion in May 2016 and
increase in net income. As a result of having taken into consideration its
newly announced a share buyback of ¥20 billion (upper limit) in August 2018.
current financial position and such factors as the continuity of dividends,
Considering its financial position and stock market trends, NSK would
NSK decided to pay a cash dividend of ¥40 per share, an increase of ¥2 on
like to proceed with an appropriate and flexible financial strategy in the years
the dividend paid for the previous fiscal year, and the payout ratio came to
to come.
30.5%.
Total Shareholders' Return (TSR)
In addition to ROE exceeding the cost of capital, NSK believes it is
Over the short one- and three-year periods, NSK’s stock
important that TSR, including capital gains and dividends, exceeds
price performance is relatively lower due to stock price
the cost of capital.
adjustments made from February 2018 onward. When looking at
Having reached 17.2% over the past five years and 8.1% over
the longer five- and 10-year periods, however, NSK’s performance
the past 10 years, NSK recognizes that its TSR is commensurate
exceeds that of the TOPIX and of the TOPIX machinery sector.
NSK’s Share Price Trends (10-Year Period including Dividends)
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
-7.9%
-12.5%
-4.4%
121.3%
17.2%
117.0%
15.9%
18.5%
5.8%
83.6%
12.9%
73.9%
8.1%
5.7%
18.3%
25.4%
7.8%
95.3%
14.3%
115.2%
8.0%
*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
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
1,077
750
836
815
758
1,360
1,815
2,120
1,739
1,916
282
366
495
458
414
646
1,023
910
691
1,261
(Yen)
377
738
717
637
715
1,062
1,758
1,030
1,592
1,426
74.3%
47.6%
37.4%
36.7%
36.5%
45.7%
32.6%
39.0%
44.3%
28.5%
*Volatility refers to the standard deviation annualized rate based
on the daily closing price.
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 2018, the effects of increased
volume on the back of strong demand, measures designed to
improve earnings, including improvements in productivity, and
reductions in other operating expenses resulted in net income
increasing 52% compared with the previous fiscal year to ¥69.3
billion. In accordance with the increase in net income, ROE improved
to 13.9%, reaching a double-digit figure for the first time in two fiscal
years and exceeding the Fifth Mid-Term Management Plan target of
10%. We believe maintaining this target over the medium term could
contribute to further improvement in shareholder value.
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.
Growth
with Profitability
ROE of 10% or more
Investment for future growth:
¥180.0 billion/3 years
Shareholder
Returns
Dividend payout ratio of
approximately 30%
Acquisition of treasury shares
（Index）
350
300
250
200
150
100
50
0
2008/3
2009/3
2010/3
2011/3
2012/3
2013/3
2014/3
2015/3
2016/3
2017/3
2018/3
- NSK - TOPIX - TOPIX Machinery
*Share price index trends including dividends (March 31, 2008 = 100)
NSK Group Tax Policy
As the globalization of business advances, the NSK Group believes that the proper payment of taxes in the countries and regions
where it operates is one of the most fundamental and important social responsibilities that it should undertake. With this
understanding, the Group has established an NSK Group Tax Policy and is striving to ensure appropriate tax treatment. For more
details, please visit the website given below.
http://www.nsk.com/investors/management/taxpolicy.html
38
NSK REPORT 2018
NSK REPORT 2018
39
Performance and Strategies of Corporate Value Creation
Financial Strategy / Policy on Shareholder Returns
Shareholders’ equity
Equity attributable to
( )
owners of the parent
Cash and
cash equivalents
Ratio of net worth
to total capital
Net D/E ratio
Financial Position
previous year, are as follows.
NSK’s financial position for the fiscal year ended March 31, 2018, as well as an evaluation and comments on the position compared with the
Due to increased profit, ROE was 13.9%, reaching a double-digit figure for the first time in two fiscal years; the ratio of net worth to total
capital was 49.2%; and the net D/E ratio was 0.22 times, results that enhanced an already sound financial position.
2017/3
2018/3
Evaluation and comments
Year-on-year
comparison
Total assets
1,044.0 billion
1,092.3 billion
＋48.4 billion
Expanding business scale
461.4 billion
537.2 billion
＋75.8 billion
139.6 billion
131.3 billion
-8.3 billion
Expansion due to retention of part of
net income as internal reserves and
other factors
Decrease due to increases in working
capital and capital expenditures,
decrease in interest-bearing debt
Interest-bearing debt
267.4 billion
250.9 billion
-16.5 billion
Continued reduction of interest-bearing debt
44.2％
49.2％
＋5.0
percentage points
Due to increase in shareholders’ equity
0.28 times
0.22 times
-0.06
Less than the MTP target of 0.3 times
ROE
9.9％
13.9％
＋4.0
Increase in accordance with increased
profit exceeded the MTP target
percentage points
(10% or more)
A Stable Financial Base
NSK plans to conduct growth investment (¥212.4 billion [revised
D/E ratio of around 0.3 times are the minimum base requirements
FCST] over the three-year period of the Fifth Mid-Term
needed to ensure NSK’s financial stability.
Management Plan) to achieve medium- to long-term increases in
NSK has been able to steadily improve its ability to generate
corporate value and regards the stabilization of its financial base as
cash flow over the past several years, resulting in a sharp
paramount in the payment of ongoing dividends to shareholders.
improvement in NSK’s financial structure. (Please see the 11-year
NSK recognizes that maintaining an A-level credit rating and a net
summary on P. 22.) NSK has received high evaluations from rating
Rating and Investment
Information, Inc. (R&I)
A
Japan Credit Rating Agency, Ltd.
(JCR)
A＋
agencies, including an upgrade to an A rating from Rating and
Investment Information, Inc. (R&I), in August 2014 after being rated
at 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 2018, the effects of increased
volume on the back of strong demand, measures designed to
improve earnings, including improvements in productivity, and
reductions in other operating expenses resulted in net income
increasing 52% compared with the previous fiscal year to ¥69.3
billion. In accordance with the increase in net income, ROE improved
to 13.9%, reaching a double-digit figure for the first time in two fiscal
years and exceeding the Fifth Mid-Term Management Plan target of
10%. We believe maintaining this target over the medium term could
contribute to further improvement in shareholder value.
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.
Growth
with Profitability
ROE of 10% or more
Investment for future growth:
¥180.0 billion/3 years
Shareholder
Returns
Dividend payout ratio of
approximately 30%
Acquisition of treasury shares
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 approximately 30%.
For the fiscal year ended March 2018, NSK was able to bring about an
increase in net income. As a result of having taken into consideration its
current financial position and such factors as the continuity of dividends,
NSK decided to pay a cash dividend of ¥40 per share, an increase of ¥2 on
the dividend paid for the previous fiscal year, and the payout ratio came to
30.5%.
Total Shareholders' Return (TSR)
In addition to ROE exceeding the cost of capital, NSK believes it is
important that TSR, including capital gains and dividends, exceeds
the cost of capital.
Having reached 17.2% over the past five years and 8.1% over
the past 10 years, NSK recognizes that its TSR is commensurate
with the cost of capital.
In addition to returning profits through dividends, NSK recognizes
share buybacks as one of the choices available in its financial and capital
policy. In the duration of the Fifth Mid-Term Management Plan, NSK
implemented a share buyback amounting to ¥15 billion in May 2016 and
newly announced a share buyback of ¥20 billion (upper limit) in August 2018.
Considering its financial position and stock market trends, NSK would
like to proceed with an appropriate and flexible financial strategy in the years
to come.
Over the short one- and three-year periods, NSK’s stock
price performance is relatively lower due to stock price
adjustments made from February 2018 onward. When looking at
the longer five- and 10-year periods, however, NSK’s performance
exceeds that of the TOPIX and of the TOPIX machinery sector.
NSK’s Share Price Trends (10-Year Period including Dividends)
Share Price Fiscal Year Trends (High · Low · Fiscal Year-End · Volatility)
High (Yen) Low (Yen) Fiscal Year-end
Fiscal Year
Volatility
(Yen)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
1,077
750
836
815
758
1,360
1,815
2,120
1,739
1,916
282
366
495
458
414
646
1,023
910
691
1,261
377
738
717
637
715
1,062
1,758
1,030
1,592
1,426
74.3%
47.6%
37.4%
36.7%
36.5%
45.7%
32.6%
39.0%
44.3%
28.5%
*Volatility refers to the standard deviation annualized rate based
on the daily closing price.
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
-7.9%
-12.5%
-4.4%
121.3%
17.2%
117.0%
15.9%
18.5%
5.8%
83.6%
12.9%
73.9%
8.1%
5.7%
18.3%
25.4%
7.8%
95.3%
14.3%
115.2%
8.0%
*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
（Index）
350
300
250
200
150
100
50
0
38
NSK REPORT 2018
NSK REPORT 2018
39
2008/3
2009/3
2010/3
2011/3
2012/3
2013/3
2014/3
2015/3
2016/3
2017/3
2018/3
- NSK - TOPIX - TOPIX Machinery
*Share price index trends including dividends (March 31, 2008 = 100)
NSK Group Tax Policy
As the globalization of business advances, the NSK Group believes that the proper payment of taxes in the countries and regions
where it operates is one of the most fundamental and important social responsibilities that it should undertake. With this
understanding, the Group has established an NSK Group Tax Policy and is striving to ensure appropriate tax treatment. For more
details, please visit the website given below.
http://www.nsk.com/investors/management/taxpolicy.html
The Underlying Strength of Corporate Value
Core Technologies and Taking Up the Challenge of Creating New Value
NSK’s Four Core Technologies
NSK has relentlessly pursued innovative technologies and focused on improving quality in order to contribute to a safer,
smoother 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.
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 & ControlTM.
A representative example is electric power steering (EPS).
Modularization-compatible, high-performance EPS
Interview with NSK’s Head of Technology
Offering new value with final users
in mind through the strengths of
our core technologies.
Executive Vice President
Head of Technology Development
Division Headquarters
Nobuo Goto
Q1
What are NSK’s technical strengths?
“Tribology” is the foundation among NSK’s “Four Core
narrowed down possible solutions. Applying these
Technologies.” Tribology is the study of interactions of
high-level approaches to rotating elements and machine
component surfaces in motion. In bearings, these
components is, in my view, NSK’s greatest technological
include the rolling elements and rings that support
strength. Based on this strength, NSK has applied
machine rotation. Tribology technologies improve
technologies that increase performance including
performance by controlling friction and abrasion. The
extending lifespans and lowering torque to products in
second core technology is “materials.” These include
various fields and has built up a successful market
optimization of special steels for high-performance
record. Another example is electric power steering
rolling elements and rings, and heat and surface
(EPS), which assists drivers via mechatronic-based
treatments. Material technologies also allow grease and
computers and motors. NSK has used “mechatronics”
resin to achieve their full potential. The third core
technology “numerical simulation” uses computer
to expand its product lineups beyond pure mechanical
components, which I think is another strength.
simulations to reproduce tribology phenomenon. Finally,
Recently, production technology has become
the fourth core technology “mechatronics” utilizes
another important technology and strength of NSK. Even
computer control to leverage the strengths of individual
though NSK has four core technologies, production
machines for high performance.
Over NSK’s 100-plus year history, we’ve done
technology must ultimately also be included. As such,
we have started to use the phrase “4+1.” No business
painstaking scientific research into the first three core
will prosper unless it provides high-quality products with
technologies and their relation to contact points. These
the right costs and prices. This is where production
points, present in even large machines, are no bigger
technology comes into play. Through 4+1, NSK’s
than the size of the hole in a Japanese five-yen coin
technological skills have received high marks
(about 5 mm). To provide the best for our customers,
worldwide, and we continue to build on our
we’ve delved into tribology and materials, used
computers to simulate occurring events, and in turn
achievements.
40
NSK REPORT 2018
NSK REPORT 2018
41
The Underlying Strength of Corporate Value
Core Technologies and Taking Up the Challenge of Creating New Value
NSK’s Four Core Technologies
NSK has relentlessly pursued innovative technologies and focused on improving quality in order to contribute to a safer,
smoother 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.
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 & ControlTM.
A representative example is electric power steering (EPS).
Modularization-compatible, high-performance EPS
Interview with NSK’s Head of Technology
Offering new value with final users
in mind through the strengths of
our core technologies.
Executive Vice President
Head of Technology Development
Division Headquarters
Nobuo Goto
Q1
What are NSK’s technical strengths?
“Tribology” is the foundation among NSK’s “Four Core
Technologies.” Tribology is the study of interactions of
component surfaces in motion. In bearings, these
include the rolling elements and rings that support
machine rotation. Tribology technologies improve
performance by controlling friction and abrasion. The
second core technology is “materials.” These include
optimization of special steels for high-performance
rolling elements and rings, and heat and surface
treatments. Material technologies also allow grease and
resin to achieve their full potential. The third core
technology “numerical simulation” uses computer
simulations to reproduce tribology phenomenon. Finally,
the fourth core technology “mechatronics” utilizes
computer control to leverage the strengths of individual
machines for high performance.
Over NSK’s 100-plus year history, we’ve done
painstaking scientific research into the first three core
technologies and their relation to contact points. These
points, present in even large machines, are no bigger
than the size of the hole in a Japanese five-yen coin
(about 5 mm). To provide the best for our customers,
we’ve delved into tribology and materials, used
computers to simulate occurring events, and in turn
narrowed down possible solutions. Applying these
high-level approaches to rotating elements and machine
components is, in my view, NSK’s greatest technological
strength. Based on this strength, NSK has applied
technologies that increase performance including
extending lifespans and lowering torque to products in
various fields and has built up a successful market
record. Another example is electric power steering
(EPS), which assists drivers via mechatronic-based
computers and motors. NSK has used “mechatronics”
to expand its product lineups beyond pure mechanical
components, which I think is another strength.
Recently, production technology has become
another important technology and strength of NSK. Even
though NSK has four core technologies, production
technology must ultimately also be included. As such,
we have started to use the phrase “4+1.” No business
will prosper unless it provides high-quality products with
the right costs and prices. This is where production
technology comes into play. Through 4+1, NSK’s
technological skills have received high marks
worldwide, and we continue to build on our
achievements.
40
NSK REPORT 2018
NSK REPORT 2018
41
The Underlying Strength of Corporate Value
Q2
What are NSK’s technological issues?
NSK handles components such as bearings and ball
screws that control the basic elements and functions of
machines. However, we’re not satisfied with just
providing components that meet customer-required
specifications. Rather, we want to provide value through
specialized products based on how our components are
ultimately used and what end users need.
In automotive components for instance, our
approach to product proposals naturally changes based
on what makes drivers happy, comfortable, and safe. In
industrial machinery as well, gaining an understanding
of the configuration of equipment, like injection molding
and die casting machines, along with the needs of
specific industries will help us to solve social issues.
These include lowering energy consumption and
reducing CO2 emissions, as well as meeting Sustainable
Development Goals (SDGs) and Environmental, Social,
and Governance (ESG) factors . From an engineering
and marketing perspective, this is an important concept
for business expansion. Of course, our forward-looking
proposals do not always work out or satisfy customers.
When our proposals fail to grasp customers’ essential
needs, we create new proposals based on customer
feedback and analyze what we missed. Though we’re
already taking such actions, we must become more
familiar with this approach and strengthen our efforts.
Q3
Technological revolutions in areas such as IoT and
AI are moving fast. What value can NSK provide to society,
the market, and customers during these changes?
The automobile industry is undergoing a dramatic
technological revolution. Against this backdrop and
within the overarching trend toward CASE (connected,
autonomous, shared, electric), I think NSK can fully
contribute to autonomous driving and automotive
electrification. Of course, issues remain in how to
effectively control electricity consumption and get the
most out of vehicles. Performance requirements for
low friction, compactness, light weight, high speed, and
low noise are becoming increasingly hard to reach.
Even so, we will contribute to these areas by developing
and providing customers with high-value-added
bearings. Moreover, we are developing and proposing
Traction Reducer to many customers. These
high-efficiency speed reducer systems enable
ultra-fast rotation in electric-drive units. We contribute
to existing machine elements such as automatic-brake
ball screws, which help keep people safe during
automated driving. We‘re also engaging in technical
development of steer-by-wire next-generation steering
systems in which the handle and steering mechanisms
are not physically connected. In actuation, which is vital
for vehicle operations, we have released the Concept
for Flex Corner Module that integrates driving and
steering. I expect that the fields where we can use our
technologies and products will continue to expand.
As for industrial machinery, we’ll continue to
provide value to industrial sectors by developing
bearing and ball screw products with greater
performance and that contribute to society based on
NSK’s core technologies. In addition, we aim to create
new value through initiatives in emerging fields new to
NSK, such as biotechnology and healthcare. Providing
essential components alone is not enough to do
business in these fields. Instead, NSK seeks out
complete solutions. We’ve made LIGHBOTTM guide
robots for the visually impaired and are developing
system units in biotech fields where fine operations are
required. In addition, we’re engaged in joint initiatives
with WHILL, Inc.*, a next-generation personal mobility
systems company. Along those lines, in November 2017
NSK invested in SoftWheel Ltd.*, an Israeli personal
mobility wheel maker for such products as wheelchairs
and bicycles. Through these actions, NSK has begun to
seek out opportunities to provide new value in
emerging fields.
*For more details on WHILL, Inc., and SoftWheel Ltd., please refer to the
following press releases:
WHILL, Inc.: http://www.nsk.com/company/news/2017/press0404b.html
SoftWheel Ltd.: http://www.nsk.com/company/news/2017/1107a.html
What are your thoughts on the Technology Division’s
global framework and role sharing, use of external resources,
Q4
and collaboration?
While NSK has 15 R&D centers worldwide, base
technologies and new product development are
centralized in Japan. As these have reached the
application level, we offer them through customer
contact points at our overseas tech centers. We’re also
taking steps to share tools at development centers in
different regions in order to provide the same level of
technical service for bearings anytime and anywhere. At
the same time, to better utilize global human resources
in steering systems, we’ve established a common skill
matrix and are preparing a system for optimally
assigning engineers to individual projects. With a core
of members based in Japan, personnel familiar with
steering technology in five locations (Europe, the United
States, China, India, and Thailand) share issues for
improving technical services and are forming teams
based on the skill matrix and regional needs.
Looking ahead, NSK will proactively adopt
we closely examine NSK’s strengths and the impact of
technologies it lacks from external sources to develop
entering these markets.
new products for new businesses and fields. With the
In addition, we’ll also proactively take advantage of
“Four Core Technologies” in mind, NSK will choose
open innovation. For example, putting an idea of
fields poised to expand rapidly as initial entry points by
computer controls into a concrete shape including
further enhancing external technologies and
product technology requires cooperation from suppliers
addressing weak points. With changes in biotechnology,
and business partners based on the scope of the field
healthcare, and robots accelerating, we have to take
and speed of progress. By calmly analyzing NSK’s
such actions to develop products quickly. To survive in
strengths and weaknesses along with those of our
these markets however, NSK must also use its own
partners, we can search for compatible partners in
strengths to create unique products. We will make
Japan and overseas and, in turn, build a framework for
decisions on technological development accordingly as
effective collaboration.
Q5
How is technology “Setting the Future in Motion”?
First, I want to again mention our efforts to develop new
Also, I think we’ll need new base technologies in
automotive technologies and products. Our ideas and
different areas. These newly required technologies are
technologies are steadily taking shape by identifying
called the “new core,” and we must develop and keep
industry needs, such as electrification and automated
them strictly in-house. We are considering a number of
driving, and taking the lead in development.
We also established the New Business
new candidates for NSK “new core” technologies while
imagining future trends. Examples include functional
Development Enhancement Office and New Field
materials and software for developing neural networks.
Products Development Center in 2016 in order to
With computer control becoming increasingly common,
combine existing NSK technologies to seek new
software technology is an extremely important field in
business opportunities. These include target segments
my view. In addition to our core business in machine
where NSK was previously not directly involved in the
elements, from now I hope for us to further expand into
market, such as biotechnology, healthcare, and robotics.
actuator and system products.
42
NSK REPORT 2018
NSK REPORT 2018
43
The Underlying Strength of Corporate Value
Q2
What are NSK’s technological issues?
NSK handles components such as bearings and ball
These include lowering energy consumption and
screws that control the basic elements and functions of
reducing CO2 emissions, as well as meeting Sustainable
machines. However, we’re not satisfied with just
Development Goals (SDGs) and Environmental, Social,
providing components that meet customer-required
and Governance (ESG) factors . From an engineering
specifications. Rather, we want to provide value through
and marketing perspective, this is an important concept
specialized products based on how our components are
for business expansion. Of course, our forward-looking
ultimately used and what end users need.
proposals do not always work out or satisfy customers.
In automotive components for instance, our
When our proposals fail to grasp customers’ essential
approach to product proposals naturally changes based
needs, we create new proposals based on customer
on what makes drivers happy, comfortable, and safe. In
feedback and analyze what we missed. Though we’re
industrial machinery as well, gaining an understanding
already taking such actions, we must become more
of the configuration of equipment, like injection molding
familiar with this approach and strengthen our efforts.
and die casting machines, along with the needs of
specific industries will help us to solve social issues.
Q3
Technological revolutions in areas such as IoT and
AI are moving fast. What value can NSK provide to society,
the market, and customers during these changes?
The automobile industry is undergoing a dramatic
for Flex Corner Module that integrates driving and
technological revolution. Against this backdrop and
steering. I expect that the fields where we can use our
within the overarching trend toward CASE (connected,
technologies and products will continue to expand.
autonomous, shared, electric), I think NSK can fully
As for industrial machinery, we’ll continue to
contribute to autonomous driving and automotive
provide value to industrial sectors by developing
electrification. Of course, issues remain in how to
bearing and ball screw products with greater
effectively control electricity consumption and get the
performance and that contribute to society based on
most out of vehicles. Performance requirements for
NSK’s core technologies. In addition, we aim to create
low friction, compactness, light weight, high speed, and
new value through initiatives in emerging fields new to
low noise are becoming increasingly hard to reach.
NSK, such as biotechnology and healthcare. Providing
Even so, we will contribute to these areas by developing
essential components alone is not enough to do
and providing customers with high-value-added
business in these fields. Instead, NSK seeks out
bearings. Moreover, we are developing and proposing
complete solutions. We’ve made LIGHBOTTM guide
Traction Reducer to many customers. These
high-efficiency speed reducer systems enable
robots for the visually impaired and are developing
system units in biotech fields where fine operations are
ultra-fast rotation in electric-drive units. We contribute
required. In addition, we’re engaged in joint initiatives
to existing machine elements such as automatic-brake
with WHILL, Inc.*, a next-generation personal mobility
ball screws, which help keep people safe during
systems company. Along those lines, in November 2017
automated driving. We‘re also engaging in technical
NSK invested in SoftWheel Ltd.*, an Israeli personal
development of steer-by-wire next-generation steering
mobility wheel maker for such products as wheelchairs
systems in which the handle and steering mechanisms
and bicycles. Through these actions, NSK has begun to
are not physically connected. In actuation, which is vital
seek out opportunities to provide new value in
for vehicle operations, we have released the Concept
emerging fields.
*For more details on WHILL, Inc., and SoftWheel Ltd., please refer to the
following press releases:
WHILL, Inc.: http://www.nsk.com/company/news/2017/press0404b.html
SoftWheel Ltd.: http://www.nsk.com/company/news/2017/1107a.html
Q4
What are your thoughts on the Technology Division’s
global framework and role sharing, use of external resources,
and collaboration?
While NSK has 15 R&D centers worldwide, base
technologies and new product development are
centralized in Japan. As these have reached the
application level, we offer them through customer
contact points at our overseas tech centers. We’re also
taking steps to share tools at development centers in
different regions in order to provide the same level of
technical service for bearings anytime and anywhere. At
the same time, to better utilize global human resources
in steering systems, we’ve established a common skill
matrix and are preparing a system for optimally
assigning engineers to individual projects. With a core
of members based in Japan, personnel familiar with
steering technology in five locations (Europe, the United
States, China, India, and Thailand) share issues for
improving technical services and are forming teams
based on the skill matrix and regional needs.
Looking ahead, NSK will proactively adopt
technologies it lacks from external sources to develop
new products for new businesses and fields. With the
“Four Core Technologies” in mind, NSK will choose
fields poised to expand rapidly as initial entry points by
further enhancing external technologies and
addressing weak points. With changes in biotechnology,
healthcare, and robots accelerating, we have to take
such actions to develop products quickly. To survive in
these markets however, NSK must also use its own
strengths to create unique products. We will make
decisions on technological development accordingly as
we closely examine NSK’s strengths and the impact of
entering these markets.
In addition, we’ll also proactively take advantage of
open innovation. For example, putting an idea of
computer controls into a concrete shape including
product technology requires cooperation from suppliers
and business partners based on the scope of the field
and speed of progress. By calmly analyzing NSK’s
strengths and weaknesses along with those of our
partners, we can search for compatible partners in
Japan and overseas and, in turn, build a framework for
effective collaboration.
Q5
How is technology “Setting the Future in Motion”?
First, I want to again mention our efforts to develop new
automotive technologies and products. Our ideas and
technologies are steadily taking shape by identifying
industry needs, such as electrification and automated
driving, and taking the lead in development.
We also established the New Business
Development Enhancement Office and New Field
Products Development Center in 2016 in order to
combine existing NSK technologies to seek new
business opportunities. These include target segments
where NSK was previously not directly involved in the
market, such as biotechnology, healthcare, and robotics.
Also, I think we’ll need new base technologies in
different areas. These newly required technologies are
called the “new core,” and we must develop and keep
them strictly in-house. We are considering a number of
new candidates for NSK “new core” technologies while
imagining future trends. Examples include functional
materials and software for developing neural networks.
With computer control becoming increasingly common,
software technology is an extremely important field in
my view. In addition to our core business in machine
elements, from now I hope for us to further expand into
actuator and system products.
42
NSK REPORT 2018
NSK REPORT 2018
43
The Underlying Strength of Corporate Value
Global Business Foundation
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
As far as the Japanese manufacturing industry goes, NSK has long
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, including business expansion
in emerging markets, the globalization of automobile platforms and
increased business with non-Japanese overseas customers.
■ Current Status of Global Sites
As of March 31, 2018, the Company had a total of 207
production, sales and technology sites in operation in 30
countries and regions 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.
Sales Breakdown by Region
(Based on Customer Location)
(Year ended March 31, 2018)
Other Asia
14%
China
21%
Europe
14%
¥1,020.3 billion
Japan
36%
The Americas
15%
Sales by Region (Based on Customer Location)
■ Japan ■ The Americas ■ Europe ■ China ■ Other Asia ー Non-Japan Ratio
(%)
70
(¥ Billions)
1,500.0
1,200.0
900.0
600.0
300.0
0
62.2
871.7
66.3
974.9
67.4
975.3
65.2
949.2
63.5
1,020.3
14/3
15/3
16/3
17/3
18/3
60
50
40
30
TOPIC
TOPIC
Cheonan Plant in South Korea Commences Full-Scale Operations
Meeting expanding global demand for automobiles with a
state-of-the-art automated facility
Due to the expansion of demand for automatic transmissions (ATs) and the progress being made in the shift to multistep ATs, demand for high-performance AT
bearings has increased, and NSK’s business is expanding. To further respond to expanding global demand, NSK launched the Cheonan plant, its second production
site in South Korea, in April 2017 and has now commenced full-scale operations.
With the Company having installed state-of-the-art automated equipment, the Cheonan plant is achieving cost competitiveness and quality improvements by
means of advanced production control and automation. Furthermore, in aiming for a workplace environment of which the employees could feel proud, the Company
gave rise to a safe, comfortable, clean and environmentally friendly plant by conducting a series of interviews with employees and incorporating their opinions.
The Company’s first plant in South Korea, the Changwon plant, started production 30 years ago. Since then, the Company has promoted improvement
activities, such as proprietary production innovation activities, and Changwon has grown into a plant that receives high praise, such as for its cost competitiveness
and high quality. Leveraging its accumulated production expertise, the Changwon plant has now reached the stage at which it supports other overseas plants.
Drawing on this experience at our Cheonan plant to supply products with which our customers will be delighted, we are aiming for a plant that is even more reliable.
44
NSK REPORT 2018
U.K.
4
Poland
4
Germany
U.K.
Germany
1
India
4
China
Japan
Thailand
India
Thailand
China
12
South Korea
Japan
20
2
2
2
U.S.A.
7
U.S.A.
Mexico
2
Brazil
1
Brazil
Singapore
Indonesia
3
Malaysia
：Headquarters
：R&D Centers
：Sales Sites, Representative Offices
0
：Number of Production Sites
Headquarters
Production
Sites
Sales
Sites
Representative
R&D Centers
Offices
(●)
Headquarters
Production
(●)
Sales
Sites
Representative
R&D Centers
Offices
(●)
6 countries and regions Total
10
20
Europe/Middle East/Africa
2
The Americas
U.S.A.
Canada
Mexico
Brazil
Peru
Argentina
U.K.
Germany
France
Italy
Netherlands
Spain
Poland
Russia
Turkey
UAE
South Africa
(●)
1
1
1
7
2
1
4
1
4
9
9
3
1
5
1
1
2
2
1
1
1
1
3
1
1
1
1
11 countries and regions Total
1
15
2
1
1
2
1
1
1
3
Asia/Oceania
Japan
Singapore
Indonesia
Thailand
Malaysia
China
Taiwan
South Korea
Philippines
Vietnam
India
Australia
New Zealand
Sites
20
3
2
2
2
4
12
18
31
2
2
5
4
3
2
1
9
4
1
1
1
1
1
4
6
6
1
1
1
1
10
15
1
1
1
3
5
13 countries and regions Total
Global
Total
45
64
82
117
207 locations in 30 countries and regions
(As of March 31, 2018)
Cheonan Plant Features
1. High productivity
In the monitoring room, utilizing a state-of-the-art system lets employees grasp the operational status of
the entire facility in real time by means of multiple monitors. Realizing advanced integrated control, the
system improves productivity and quality. The Company has installed the latest equipment, which has
extended automation even into the assembly and other processes where automation was previously
difficult. The Cheonan plant also has achieved the streamlining of production lines. Improving safety and
work efficiency, the plant will even be compatible with the smart factories of the future.
2. Environmentally friendly
Electric power for the factory lighting, office lighting and the air conditioning comes from the solar panels
installed on the onsite parking lot, and wind power is used to generate the power for the street lighting.
3. A safe and friendly working environment
The high ceiling was strengthened and the ventilation system enhanced. The assembly cleaning machine is
also odorless. A workplace that does not smell has been achieved. The difference in the incorporation and
transition of workpieces throughout the production process has been kept down to less than 50 mm,
making the production shop floor quieter. A comfortable indoor environment that maximizes natural light
on windows and walls has been realized.
Facilitating work involving the moving of heavy objects
NSK REPORT 2018
45
The Underlying Strength of Corporate Value
Global Business Foundation
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.
Other Asia
14%
China
21%
Europe
14%
Global Sites
■ Background to Globalization
As far as the Japanese manufacturing industry goes, NSK has long
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, including business expansion
in emerging markets, the globalization of automobile platforms and
increased business with non-Japanese overseas customers.
■ Current Status of Global Sites
As of March 31, 2018, the Company had a total of 207
production, sales and technology sites in operation in 30
countries and regions 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.
1,500.0
1,200.0
900.0
600.0
300.0
0
Sales Breakdown by Region
(Based on Customer Location)
(Year ended March 31, 2018)
¥1,020.3 billion
Japan
36%
The Americas
15%
Sales by Region (Based on Customer Location)
■ Japan ■ The Americas ■ Europe ■ China ■ Other Asia ー Non-Japan Ratio
(¥ Billions)
62.2
871.7
66.3
974.9
67.4
975.3
65.2
949.2
63.5
1,020.3
(%)
70
60
50
40
30
14/3
15/3
16/3
17/3
18/3
TOPIC
TOPIC
Cheonan Plant in South Korea Commences Full-Scale Operations
Meeting expanding global demand for automobiles with a
state-of-the-art automated facility
Due to the expansion of demand for automatic transmissions (ATs) and the progress being made in the shift to multistep ATs, demand for high-performance AT
bearings has increased, and NSK’s business is expanding. To further respond to expanding global demand, NSK launched the Cheonan plant, its second production
site in South Korea, in April 2017 and has now commenced full-scale operations.
With the Company having installed state-of-the-art automated equipment, the Cheonan plant is achieving cost competitiveness and quality improvements by
means of advanced production control and automation. Furthermore, in aiming for a workplace environment of which the employees could feel proud, the Company
gave rise to a safe, comfortable, clean and environmentally friendly plant by conducting a series of interviews with employees and incorporating their opinions.
The Company’s first plant in South Korea, the Changwon plant, started production 30 years ago. Since then, the Company has promoted improvement
activities, such as proprietary production innovation activities, and Changwon has grown into a plant that receives high praise, such as for its cost competitiveness
and high quality. Leveraging its accumulated production expertise, the Changwon plant has now reached the stage at which it supports other overseas plants.
Drawing on this experience at our Cheonan plant to supply products with which our customers will be delighted, we are aiming for a plant that is even more reliable.
44
NSK REPORT 2018
U.K.
4
Poland
4
Germany
U.K.
Germany
1
India
4
China
12
China
Japan
South Korea
2
Japan
20
Thailand
2
2
Malaysia
India
Thailand
Singapore
Indonesia
3
U.S.A.
7
：Headquarters
：R&D Centers
：Sales Sites, Representative Offices
0
：Number of Production Sites
U.S.A.
Mexico
2
Brazil
1
Brazil
The Americas
U.S.A.
Canada
Mexico
Brazil
Peru
Argentina
6 countries and regions Total
Europe/Middle East/Africa
U.K.
Germany
France
Italy
Netherlands
Spain
Poland
Russia
Turkey
UAE
South Africa
11 countries and regions Total
Headquarters
(●)
Production
Sites
Sales
Sites
Representative
Offices
R&D Centers
(●)
1
1
1
1
7
2
1
10
4
1
4
9
9
3
1
5
1
1
20
2
2
1
1
1
1
3
1
1
1
1
15
2
2
1
1
2
1
1
1
3
Asia/Oceania
Japan
Singapore
Indonesia
Thailand
Malaysia
China
Taiwan
South Korea
Philippines
Vietnam
India
Australia
New Zealand
13 countries and regions Total
Global
Total
Headquarters
(●)
Production
Sites
Sales
Sites
Representative
Offices
R&D Centers
(●)
1
1
1
1
4
6
20
3
2
2
12
2
4
45
64
31
2
2
5
4
18
3
2
1
9
4
1
82
117
1
1
1
3
5
6
1
1
1
1
10
15
207 locations in 30 countries and regions
(As of March 31, 2018)
Cheonan Plant Features
1. High productivity
In the monitoring room, utilizing a state-of-the-art system lets employees grasp the operational status of
the entire facility in real time by means of multiple monitors. Realizing advanced integrated control, the
system improves productivity and quality. The Company has installed the latest equipment, which has
extended automation even into the assembly and other processes where automation was previously
difficult. The Cheonan plant also has achieved the streamlining of production lines. Improving safety and
work efficiency, the plant will even be compatible with the smart factories of the future.
2. Environmentally friendly
Electric power for the factory lighting, office lighting and the air conditioning comes from the solar panels
installed on the onsite parking lot, and wind power is used to generate the power for the street lighting.
3. A safe and friendly working environment
The high ceiling was strengthened and the ventilation system enhanced. The assembly cleaning machine is
also odorless. A workplace that does not smell has been achieved. The difference in the incorporation and
transition of workpieces throughout the production process has been kept down to less than 50 mm,
making the production shop floor quieter. A comfortable indoor environment that maximizes natural light
on windows and walls has been realized.
Facilitating work involving the moving of heavy objects
NSK REPORT 2018
45
The Underlying Strength of Corporate Value
CSR/ESG Management
NSK’s Approach: CSR in Corporate Value Creation
Society is facing a broad range of challenges on the path to greater sustainability and prosperity for all. To engage the potential of our increasingly interlinked global
community, the Sustainable Development Goals (SDGs) were adopted by the United Nations in 2015. They serve as a call to action for governments, companies, and citizens
to cooperate and work toward overcoming these challenges.
NSK is a proud member of a diverse range of local, regional, and global communities. In our mission statement, we clearly affirm our commitment to creating a
“safer, smoother society” and our drive to protect the global environment. CSR/ESG management is accordingly positioned as a key mechanism in the creation of corporate
value. At all steps of NSK’s business activities, from research and development to distribution and after-sales service, we aim to thoroughly grasp stakeholders’ needs and
expectations from their perspective and respond through comprehensive action across the business. This feeds into our value creation cycle, thereby improving corporate
value through social contribution, sustainable initiatives, and new products, solutions, and services adapted to the needs of today and tomorrow.
Societal Issues
● Climate Change
● Eradication of Poverty and Hunger
● Natural Disaster Response
● Preventing/Reducing Inequality
● Resource Depletion
● Preventing Forced Labor and Child Labor
● Water Shortages
● Quality of Education
● Ecosystem Conservation
● Gender Equality
● Hygienic Facility Maintenance
● Eradication of Conflict/Terrorism
● Water Safety
● Product Safety
● Population Growth
● Falling Birthrates/Aging Populations
Safer and
Smoother Society
(Amongst other issues)
NSK
Mission Statement
NSK Vision 2026
Feedback
R&D
Protection of the
Global Environment
ーDRIVERー
NSK’s
Fifth Mid-Term
Management
Plan
Realization of a Sustainable
Society
Improved Corporate Value
Sales/
Aftermarket
NSK’s
Business Activities
Receipt of
Orders
Safety
Quality
Compliance
Procurement
Mass
Production
Design/
Preparation
Manufacturing
ーDRIVERー
Global Business
Platform
Overseas
Development
Capabilities
( )
Value Created
Customers
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Employees
Contribution to an advanced technological society
Suppliers
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Local
Communities
Shareholders
and Investors
Future
Generations
ーDRIVERー
Four Core
Technologies
Social Contribution
through Business/
Products
Corporate
Responsibility
ーDRIVERー
CSR/ESG
Management
Risk Management
Seizing Opportunities
Environmental Initiatives (E)
● Environmental Management (P. 50)
● Creating Environmentally
Friendly Products
● Global Warming Countermeasures
● Measures for Resource
Conservation and Recycling
● Reducing the Use of Environmentally
Harmful Substances
● Biodiversity Conservation
46
NSK REPORT 2018
Social Initiatives (S)
● Research and Development
● Quality Management (P. 48)
● Safety Management (P. 49)
● Working with Local Communities
(Social Contribution Initiatives)
● Human Resource Management (P. 52)
● Supply Chain Management (P. 54)
● Material issues
Governance Initiatives (G)
● Corporate Governance (P. 55)
● Compliance (P. 59)
● Risk Management
■ Initiatives to Promote Understanding of SDGs
To make progress in efforts relating to SDGs, it is
important for each and every employee to understand the
value that NSK provides/can provide to society as a whole.
Of course, it is also necessary for employees to deepen
their understanding of the actual goals adopted by the
UN. Accordingly, NSK is making the following efforts to
encourage and enhance employee understanding.
● Messages from senior management
● Overview of SDGs on company intranet
● SDG posters (at all business sites in Japan)
● SDG topic stickers placed around relevant facilities
● Employee briefings
In addition to continuing to develop these activities, we
plan to formulate more specific targets and initiatives as
part of our Sixth Mid-Term Management Plan.
SDG poster
SDG sticker
Needs and Expectations of NSK Stakeholders
NSK’s business is dependent upon the trust of a diverse range of stakeholders. We strive to engage in multifaceted collaborative efforts
with stakeholders to create corporate, social, and environmental value, and thereby pursue the realization of a sustainable society.
Customers
Employees
NSK’s products are used in a wide range of industries, including
automotive, rail, and home appliance industries, as well as in steel
manufacturing equipment and industrial robots. We consider our
The value created by NSK, including advanced technology and world
class products, is driven by a diverse team of employees working all
over the world. Our employees are important stakeholders, and we
customers to include not only the machine manufacturers that purchase
strive to develop vibrant, motivating workplaces to fully enable each
our products directly, but also the end users who utilize our products in
employee’s potential.
the various machines produced by direct customers.
In addition to fostering creativity and individuality, NSK is working
Our customers require continuous technological innovation, the
to revitalize a constructive labor-management dialogue, employee
development of high-quality, environmentally friendly products and
solutions, and stable, consistent supply all over the world.
communications, and exchanges with external stakeholders. Through
these efforts, NSK aims to raise the awareness of each employee to
In addition to deepening our understanding of the needs of machine
promote the creation of open, transparent workplaces that enable
employees to set the future in motion and increase corporate value.
manufacturers through everyday sales activities and technological
exchanges, we also strive to address the expectations of end users.
Effectively incorporating direct customer and end user perspectives
facilitates the development of products and services that provide real
value to users and society, from environmental conservation to advanced
technologies, to the realization of a safe, prosperous society for all.
Suppliers
Local Communities
NSK’s businesses, which reach all corners of the globe, are underpinned
NSK’s globally expanding business depends on building harmonious
by numerous suppliers around the world. Suppliers that support the
competitiveness of our businesses through the provision of superior
components and raw materials are important stakeholders. Suppliers
ask for close collaboration in quality assurance and technology
development and require fair transaction practices.
relationships with local communities, and fulfilling our corporate
responsibility to contribute to the development of those communities.
NSK aims to grow as a company that is needed, loved, and
respected by communities around the world. We strive to respect
cultures, customs, and needs by engaging, communicating, and
NSK strives to develop mutually beneficial relationships through
working closely with each community to achieve mutually beneficial
frank and open exchange of opinions in daily procurement activities and
development and the protection of local environments.
mutual improvement initiatives. For example, NSK works with suppliers
to raise the level of quality assurance, to develop new technologies, to
protect the environment, and to ensure that human rights are fully
respected. These sincere efforts are essential for environmental
conservation and mutual prosperity along the entire global supply chain.
Shareholders and Investors
Future Generations
As providers of financial capital, shareholders and investors are
important stakeholders who play a critical role in supporting NSK’s
Realizing a prosperous society that will last long into the future is
indispensable not only for NSK but also for the growth and
growth and monitoring company management. Our shareholders expect
development of society as a whole. Future generations, which will be
us to realize a positive return on investment through sustainable growth,
responsible for shaping future society, are important NSK
and also demand ESG management initiatives that emphasize
maintaining a harmonious balance between society and the
stakeholders.
environment.
management.
NSK aims to grasp and meet the expectations of shareholders and
efforts geared toward long term growth. Through these activities, we
investors through sincere efforts to maintain a constructive dialogue and
aim to realize a prosperous society for the future by not only conveying
further increase the soundness and transparency of company
the enjoyment and importance of monozukuri to children and students
but also by developing future generations of human resources.
To support the healthy development of future generations, we
conduct science classes, offer internships, and provide scholarships as
NSK REPORT 2018
47
The Underlying Strength of Corporate Value
CSR/ESG Management
NSK’s Approach: CSR in Corporate Value Creation
Society is facing a broad range of challenges on the path to greater sustainability and prosperity for all. To engage the potential of our increasingly interlinked global
community, the Sustainable Development Goals (SDGs) were adopted by the United Nations in 2015. They serve as a call to action for governments, companies, and citizens
to cooperate and work toward overcoming these challenges.
NSK is a proud member of a diverse range of local, regional, and global communities. In our mission statement, we clearly affirm our commitment to creating a
“safer, smoother society” and our drive to protect the global environment. CSR/ESG management is accordingly positioned as a key mechanism in the creation of corporate
value. At all steps of NSK’s business activities, from research and development to distribution and after-sales service, we aim to thoroughly grasp stakeholders’ needs and
expectations from their perspective and respond through comprehensive action across the business. This feeds into our value creation cycle, thereby improving corporate
value through social contribution, sustainable initiatives, and new products, solutions, and services adapted to the needs of today and tomorrow.
Societal Issues
● Climate Change
● Eradication of Poverty and Hunger
● Natural Disaster Response
● Preventing/Reducing Inequality
● Resource Depletion
● Preventing Forced Labor and Child Labor
● Water Shortages
● Quality of Education
● Ecosystem Conservation
● Gender Equality
● Hygienic Facility Maintenance
● Eradication of Conflict/Terrorism
● Water Safety
● Product Safety
● Population Growth
● Falling Birthrates/Aging Populations
Corporate
Responsibility
(Amongst other issues)
NSK
Mission Statement
NSK Vision 2026
Feedback
R&D
ーDRIVERー
CSR/ESG
Management
Sales/
Aftermarket
NSK’s
Business Activities
Receipt of
Orders
Realization of a Sustainable
Society
Improved Corporate Value
ーDRIVERー
NSK’s
Fifth Mid-Term
Management
Plan
Value Created
Customers
Environmental contribution
(making products lighter, more compact, and with longer service lives)
Employees
Contribution to an advanced technological society
Suppliers
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Local
Communities
Shareholders
and Investors
Future
Generations
Social Contribution
through Business/
Products
● Material issues
Safety
Quality
Compliance
Procurement
Mass
Production
Design/
Preparation
ーDRIVERー
Four Core
Technologies
Risk Management
Seizing Opportunities
Manufacturing
ーDRIVERー
Global Business
Platform
Overseas
Development
( )
Capabilities
● Environmental Management (P. 50)
● Creating Environmentally
Friendly Products
● Global Warming Countermeasures
● Measures for Resource
Conservation and Recycling
● Reducing the Use of Environmentally
Harmful Substances
● Biodiversity Conservation
46
NSK REPORT 2018
Environmental Initiatives (E)
Social Initiatives (S)
Governance Initiatives (G)
● Research and Development
● Quality Management (P. 48)
● Safety Management (P. 49)
● Working with Local Communities
(Social Contribution Initiatives)
● Human Resource Management (P. 52)
● Supply Chain Management (P. 54)
● Corporate Governance (P. 55)
● Compliance (P. 59)
● Risk Management
■ Initiatives to Promote Understanding of SDGs
To make progress in efforts relating to SDGs, it is
important for each and every employee to understand the
value that NSK provides/can provide to society as a whole.
Of course, it is also necessary for employees to deepen
their understanding of the actual goals adopted by the
UN. Accordingly, NSK is making the following efforts to
encourage and enhance employee understanding.
● Messages from senior management
● Overview of SDGs on company intranet
● SDG posters (at all business sites in Japan)
● SDG topic stickers placed around relevant facilities
● Employee briefings
In addition to continuing to develop these activities, we
plan to formulate more specific targets and initiatives as
part of our Sixth Mid-Term Management Plan.
SDG poster
SDG sticker
Needs and Expectations of NSK Stakeholders
NSK’s business is dependent upon the trust of a diverse range of stakeholders. We strive to engage in multifaceted collaborative efforts
with stakeholders to create corporate, social, and environmental value, and thereby pursue the realization of a sustainable society.
Safer and
Smoother Society
Protection of the
Global Environment
Customers
Employees
NSK’s products are used in a wide range of industries, including
automotive, rail, and home appliance industries, as well as in steel
manufacturing equipment and industrial robots. We consider our
customers to include not only the machine manufacturers that purchase
our products directly, but also the end users who utilize our products in
the various machines produced by direct customers.
Our customers require continuous technological innovation, the
development of high-quality, environmentally friendly products and
solutions, and stable, consistent supply all over the world.
In addition to deepening our understanding of the needs of machine
manufacturers through everyday sales activities and technological
exchanges, we also strive to address the expectations of end users.
Effectively incorporating direct customer and end user perspectives
facilitates the development of products and services that provide real
value to users and society, from environmental conservation to advanced
technologies, to the realization of a safe, prosperous society for all.
The value created by NSK, including advanced technology and world
class products, is driven by a diverse team of employees working all
over the world. Our employees are important stakeholders, and we
strive to develop vibrant, motivating workplaces to fully enable each
employee’s potential.
In addition to fostering creativity and individuality, NSK is working
to revitalize a constructive labor-management dialogue, employee
communications, and exchanges with external stakeholders. Through
these efforts, NSK aims to raise the awareness of each employee to
promote the creation of open, transparent workplaces that enable
employees to set the future in motion and increase corporate value.
Suppliers
Local Communities
NSK’s businesses, which reach all corners of the globe, are underpinned
by numerous suppliers around the world. Suppliers that support the
competitiveness of our businesses through the provision of superior
components and raw materials are important stakeholders. Suppliers
ask for close collaboration in quality assurance and technology
development and require fair transaction practices.
NSK strives to develop mutually beneficial relationships through
frank and open exchange of opinions in daily procurement activities and
mutual improvement initiatives. For example, NSK works with suppliers
to raise the level of quality assurance, to develop new technologies, to
protect the environment, and to ensure that human rights are fully
respected. These sincere efforts are essential for environmental
conservation and mutual prosperity along the entire global supply chain.
NSK’s globally expanding business depends on building harmonious
relationships with local communities, and fulfilling our corporate
responsibility to contribute to the development of those communities.
NSK aims to grow as a company that is needed, loved, and
respected by communities around the world. We strive to respect
cultures, customs, and needs by engaging, communicating, and
working closely with each community to achieve mutually beneficial
development and the protection of local environments.
Shareholders and Investors
As providers of financial capital, shareholders and investors are
important stakeholders who play a critical role in supporting NSK’s
growth and monitoring company management. Our shareholders expect
us to realize a positive return on investment through sustainable growth,
and also demand ESG management initiatives that emphasize
maintaining a harmonious balance between society and the
environment.
NSK aims to grasp and meet the expectations of shareholders and
investors through sincere efforts to maintain a constructive dialogue and
further increase the soundness and transparency of company
management.
Future Generations
Realizing a prosperous society that will last long into the future is
indispensable not only for NSK but also for the growth and
development of society as a whole. Future generations, which will be
responsible for shaping future society, are important NSK
stakeholders.
To support the healthy development of future generations, we
conduct science classes, offer internships, and provide scholarships as
efforts geared toward long term growth. Through these activities, we
aim to realize a prosperous society for the future by not only conveying
the enjoyment and importance of monozukuri to children and students
but also by developing future generations of human resources.
NSK REPORT 2018
47
The Underlying Strength of Corporate Value
CSR/ESG Management
Material Issue: Quality Management
Related Key Stakeholders
Related Key Stakeholders
Customers Employees Suppliers
Local
Communities
Employees Suppliers
Local
Communities
Material Issue: Safety Management
Why Quality Management Matters
In the Company’s manufacturing operations, the quality of the products and services we offer greatly affects the Company’s
credibility, and providing high-quality products and services is linked to increases in corporate value. To meet the needs and
expectations of customers and to remain a company trusted by society, NSK classifies quality into four categories: field quality, design
quality, manufacturing quality, and supplier quality, and strives to enhance the level of each in cooperation with its suppliers.
Why Safety Management Matters
Improving workplace safety not only ensures employees' peace of mind but also leads to harmony with local communities and the
reduction of risk in business development. Regarding safety management as one of its most important management issues, NSK is
working on safety improvement activities on a global basis under its Mid-term Management Plan, which positions "safety, quality, and
compliance" as the foundation of activities that should be strengthened.
NSK’s Approach
Quality Assurance Vision 2026
NSK’s Approach
NSK aims to become “No. 1 in Total Quality.” In other words, the
Group is working to achieve the industry’s best quality in
everything it delivers̶not only products and services, but also
information. The Group believes that this commitment to quality
ensures that its products will satisfy customers all over the world.
Toward that end, the Group engages in activities based on the
Three Pillars of NSK Quality Assurance.
Three Pillars of NSK Quality Assurance
1. NSK Product Development System (NPDS)
In order to quickly transform new orders into reliable,
stable production, the NSK Group is promoting
initiatives that build quality into each process.
2. NSK Quality No. 1 (NQ1) Program
The NSK Group is promoting initiatives to realize
stable production and ensure zero defects.
3. Human Resources Development
The Group is promoting human resources
development in order to build a stronger
foundation for quality creation.
NSK put in place the Quality Assurance Vision 2026 as a part of the Company’s
efforts to identify specific targets through 2026. As indicated below, this vision
also clarifies the ideal state to which the Company aspires. Guided by this
vision, NSK is implementing total quality management to achieve a level of
“NSK Quality” that engenders trust and contributes to the safety and peace of
mind of customers. In specific terms, the Company will endeavor to enhance
the quality of its products, work and human resources, which are 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 market needs and the requirements of customers.
NSK Quality
Contribute to Customer Safety, Security, and Confidence
The Ideal State to which the Company Aspires
● Contribute to society by delivering total quality
● Maintain an approach to quality that customers will evaluate highly
● Ensure all employees think and act based on the
quality-first principle according to high-quality ethics
Action Guidelines
● Put the customer first ● Be honest
● Provide 100% good products and services
NPDS: Quality Management System
NSK's innovative quality management system, NPDS (NSK Product Development System), is being deployed globally to respond promptly
and reliably to new projects and to mass produce products that satisfy customers. At each stage of the process, from product planning to
development/design, prototype manufacturing and mass production, we will confirm that any concerns are resolved and build quality. In
addition, even after a product has entered mass production, we conduct thorough management to stably maintain high quality.
▶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?
NQ1 Program for Stable Production with Zero Defects
Involving close cooperation between each division, including production, design development,
production technology, quality assurance, sales and logistics, NQ1 (NSK Quality No.1) activities are
Group-wide and designed to optimize the flow of goods and information throughout the production
process, from the procurement of components and materials to delivery to customers.
As part of its NQ1 program, NSK is engaged in improvement activities aiming for the very best
quality, with zero defects, called “Dantotsu activities.” Each plant decides initiative themes and
carries out various improvements targeting zero defects on a test line. Effective initiatives are
quickly rolled out horizontally to other lines and manufacturing sites around the world.
48
NSK REPORT 2018
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. The Company should establish safe, secure,
and comfortable workplaces, no matter the level of output demand.”
We believe that safe workplaces can only be achieved by promoting
global standards to improve unsafe facilities, by encouraging information
sharing, and by fostering a culture where employees feel free to challenge
one another on the safety of their actions.
Occupational Safety and Health Management System
NSK realizes how important it is to be always 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, NSK has developed
an occupational safety and health management system that complies
with OHSAS 18001 and other related regulations, and we strive to foster a
“safety first” culture that fully engages all employees at each of our sites.
We share information on any occupational health and safety
incidents that do occur on a global basis and always work to prevent a
recurrence of similar incidents by taking effective measures.
Following the issue of ISO 45001, the international standard covering
occupational health and safety management systems, we are conducting
activities globally with the intention of obtaining this certification.
▶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-Time Injury
Frequency Rate
In Japan
Outside Japan
Global
Japan’s Manufacturing
Industry (Average)
FY2015
FY2016
FY2017
0.32
0.91
0.70
1.06
0.28
0.89
0.68
1.15
0.23
0.79
0.59
1.02
Lost-time injury frequency 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’s Social Contribution
Initiatives
Related Key Stakeholders
Employees
Local
Future
Communities
Generations
To create sustainable societies, it is crucial for companies to actively
address social issues and to conduct their business activities with an
awareness of local community development.
Having positioned three priority areas for its social contribution
initiatives̶promotion of science and technology, development of the next
generation, and mutual harmony and benefit with communities̶NSK
undertakes wide-ranging initiatives, such as providing aid to research
institutions, providing scholarships, offering students work experience
opportunities, holding classes about bearings, and planting trees.
●To Familiarize Children and Students with Science
NSK sees children and students, the torchbearers of the future, as
important stakeholders. NSK holds factory tours and science workshops
to familiarize children and students with science and spark their interest.
In addition, we set up the "Bearing Lab" display booth at the Science
Museum (in Kitanomaru Park, Tokyo), where visitors can learn while
"seeing, touching and experiencing” friction and bearings.
Science workshop for children
"Bearing Lab" display booth at the
Science Museum
●Provide Support Through the NSK
Scholarship Foundation
NSK established the NSK Scholarship
Foundation in April 2017 for the purpose of
supporting the development of the advanced
future generations of human resources that will contribute to solving various
problems surrounding the world, such as conflict and hunger, measures to
combat climate change, and nature conservation. Through the foundation,
NSK pays the tuition fees, living expenses and traveling expenses of
Japanese students who wish to study at overseas research institutions or
graduate schools or to Asian students studying at graduate schools in Japan.
Foundation information
・ Name: NSK Scholarship Foundation
・ Founded by: NSK Ltd.
・ Chairman: Norio Otsuka, Senior Advisor, NSK Ltd.
・ Location: Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku, Tokyo,141-8560, Japan
・ Established: April 11, 2017
Business description
・ Provision of scholarships to Japanese students for study abroad
at research institutions or graduate schools
・ Provision of scholarships to students from Asia for study at
graduate schools in Japan
In fiscal 2017, NSK Scholarship Foundation selected and provided
scholarship support to three Asian students. The foundation will continue to
select and support scholarship students from fiscal 2018 onward.
NSK REPORT 2018
49
The Underlying Strength of Corporate Value
CSR/ESG Management
Related Key Stakeholders
Related Key Stakeholders
Material Issue: Quality Management
Material Issue: Safety Management
Customers Employees Suppliers
Local
Communities
Employees Suppliers
Local
Communities
Why Quality Management Matters
In the Company’s manufacturing operations, the quality of the products and services we offer greatly affects the Company’s
credibility, and providing high-quality products and services is linked to increases in corporate value. To meet the needs and
expectations of customers and to remain a company trusted by society, NSK classifies quality into four categories: field quality, design
quality, manufacturing quality, and supplier quality, and strives to enhance the level of each in cooperation with its suppliers.
Why Safety Management Matters
Improving workplace safety not only ensures employees' peace of mind but also leads to harmony with local communities and the
reduction of risk in business development. Regarding safety management as one of its most important management issues, NSK is
working on safety improvement activities on a global basis under its Mid-term Management Plan, which positions "safety, quality, and
compliance" as the foundation of activities that should be strengthened.
▶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-Time Injury
Frequency Rate
In Japan
Outside Japan
FY2015
FY2016
FY2017
0.32
0.91
0.28
0.89
0.23
0.79
0.70
0.68
Global
Japan’s Manufacturing
Industry (Average)
Lost-time injury frequency 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.
0.59
1.06
1.02
1.15
NSK’s Approach
Quality Assurance Vision 2026
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. The Company should establish safe, secure,
and comfortable workplaces, no matter the level of output demand.”
We believe that safe workplaces can only be achieved by promoting
global standards to improve unsafe facilities, by encouraging information
sharing, and by fostering a culture where employees feel free to challenge
one another on the safety of their actions.
Occupational Safety and Health Management System
NSK realizes how important it is to be always 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, NSK has developed
an occupational safety and health management system that complies
with OHSAS 18001 and other related regulations, and we strive to foster a
“safety first” culture that fully engages all employees at each of our sites.
We share information on any occupational health and safety
incidents that do occur on a global basis and always work to prevent a
recurrence of similar incidents by taking effective measures.
Following the issue of ISO 45001, the international standard covering
occupational health and safety management systems, we are conducting
activities globally with the intention of obtaining this certification.
NSK aims to become “No. 1 in Total Quality.” In other words, the
Group is working to achieve the industry’s best quality in
everything it delivers̶not only products and services, but also
information. The Group believes that this commitment to quality
ensures that its products will satisfy customers all over the world.
Toward that end, the Group engages in activities based on the
Three Pillars of NSK Quality Assurance.
Three Pillars of NSK Quality Assurance
1. NSK Product Development System (NPDS)
In order to quickly transform new orders into reliable,
stable production, the NSK Group is promoting
initiatives that build quality into each process.
2. NSK Quality No. 1 (NQ1) Program
The NSK Group is promoting initiatives to realize
stable production and ensure zero defects.
3. Human Resources Development
The Group is promoting human resources
development in order to build a stronger
foundation for quality creation.
NSK put in place the Quality Assurance Vision 2026 as a part of the Company’s
efforts to identify specific targets through 2026. As indicated below, this vision
also clarifies the ideal state to which the Company aspires. Guided by this
vision, NSK is implementing total quality management to achieve a level of
“NSK Quality” that engenders trust and contributes to the safety and peace of
mind of customers. In specific terms, the Company will endeavor to enhance
the quality of its products, work and human resources, which are 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 market needs and the requirements of customers.
NSK Quality
Contribute to Customer Safety, Security, and Confidence
The Ideal State to which the Company Aspires
● Contribute to society by delivering total quality
● Maintain an approach to quality that customers will evaluate highly
● Ensure all employees think and act based on the
quality-first principle according to high-quality ethics
Action Guidelines
● Put the customer first ● Be honest
● Provide 100% good products and services
NPDS: Quality Management System
NSK's innovative quality management system, NPDS (NSK Product Development System), is being deployed globally to respond promptly
and reliably to new projects and to mass produce products that satisfy customers. At each stage of the process, from product planning to
development/design, prototype manufacturing and mass production, we will confirm that any concerns are resolved and build quality. In
addition, even after a product has entered mass production, we conduct thorough management to stably maintain high quality.
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?
NQ1 Program for Stable Production with Zero Defects
Involving close cooperation between each division, including production, design development,
production technology, quality assurance, sales and logistics, NQ1 (NSK Quality No.1) activities are
Group-wide and designed to optimize the flow of goods and information throughout the production
process, from the procurement of components and materials to delivery to customers.
As part of its NQ1 program, NSK is engaged in improvement activities aiming for the very best
quality, with zero defects, called “Dantotsu activities.” Each plant decides initiative themes and
carries out various improvements targeting zero defects on a test line. Effective initiatives are
quickly rolled out horizontally to other lines and manufacturing sites around the world.
48
NSK REPORT 2018
NSK’s Social Contribution
Initiatives
Related Key Stakeholders
Employees
Local
Communities
Future
Generations
To create sustainable societies, it is crucial for companies to actively
address social issues and to conduct their business activities with an
awareness of local community development.
Having positioned three priority areas for its social contribution
initiatives̶promotion of science and technology, development of the next
generation, and mutual harmony and benefit with communities̶NSK
undertakes wide-ranging initiatives, such as providing aid to research
institutions, providing scholarships, offering students work experience
opportunities, holding classes about bearings, and planting trees.
●To Familiarize Children and Students with Science
NSK sees children and students, the torchbearers of the future, as
important stakeholders. NSK holds factory tours and science workshops
to familiarize children and students with science and spark their interest.
In addition, we set up the "Bearing Lab" display booth at the Science
Museum (in Kitanomaru Park, Tokyo), where visitors can learn while
"seeing, touching and experiencing” friction and bearings.
Science workshop for children
"Bearing Lab" display booth at the
Science Museum
●Provide Support Through the NSK
Scholarship Foundation
NSK established the NSK Scholarship
Foundation in April 2017 for the purpose of
supporting the development of the advanced
future generations of human resources that will contribute to solving various
problems surrounding the world, such as conflict and hunger, measures to
combat climate change, and nature conservation. Through the foundation,
NSK pays the tuition fees, living expenses and traveling expenses of
Japanese students who wish to study at overseas research institutions or
graduate schools or to Asian students studying at graduate schools in Japan.
Foundation information
・ Name: NSK Scholarship Foundation
・ Founded by: NSK Ltd.
・ Chairman: Norio Otsuka, Senior Advisor, NSK Ltd.
・ Location: Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku, Tokyo,141-8560, Japan
・ Established: April 11, 2017
Business description
・ Provision of scholarships to Japanese students for study abroad
at research institutions or graduate schools
・ Provision of scholarships to students from Asia for study at
graduate schools in Japan
In fiscal 2017, NSK Scholarship Foundation selected and provided
scholarship support to three Asian students. The foundation will continue to
select and support scholarship students from fiscal 2018 onward.
NSK REPORT 2018
49
The Underlying Strength of Corporate Value
CSR/ESG Management
Related Key Stakeholders
Material Issue: Environmental Management
Customers
Employees
Suppliers
Local
Communities
Shareholders
and Investors
Future
Generations
Why Environmental Management Matters
The realization of a sustainable society in which economic development and environmental protection coexist is becoming an
increasingly pressing issue due to growing concern over the impact of climate change, particularly in light of the recent succession of
extreme weather events across the world. Accordingly, there is growing competition to develop new technologies and products that
help decrease environmental impact.
NSK’s Approach
NSK adheres to the principle that global environmental protection, as outlined in the
Company’s mission statement, must be an ever-present 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 and every one of its directors and 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.
Environmental Management
NSK has established a Global Environment Conservation Committee as its highest
decision-making body for environmental management. Chaired by a senior vice
president and composed of the officers involved, such as from business division
headquarters and technology development divisions, the Global Environment
Conservation Committee deliberates NSK’s environmental action plans and also
reviews and revises the progress of initiatives. On the basis of the Committee’s
decisions, theme-based specialized subcommittees–such as the energy, resource
conservation, environmental product, logistics, and green office subcommittees–,
NSK’s Environmental Division as well as its headquarters in Europe, the Americas
and China coordinate their necessary activities, and each department and each
business site work together to promote environmental efforts.
Held three times in fiscal 2017, the Global Environment Conservation
Committee examined and discussed, for example, the setting of medium- and
long-term activity targets as well as activities contributing to the reduction of CO2
emissions at the customer use stage through its products.
NSK Environmental Policy
Our commitment to environmental management forms the basis of our
existence and our pursuits. We are determined to take independent and
assertive action in aiming to establish sustainable societies.
1. Prevention of Global Warming
To actively support efforts to prevent global warming by developing
environmentally friendly manufacturing processes and technologies.
2. Reduction of Environmental Impact
To establish and continually improve environmental management systems and
systems for the management of chemical substances in products; to comply
with regulations, to prevent pollution, and to reduce environmental impact.
3. Contribution to Societies
To be actively involved in the social development of local
communities where we operate by promoting our global corporate
activities, to create affluent societies that are in harmony with the
environment, and to promote the preservation of biodiversity.
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
Input and Output of Global Business Activities (FY2017)
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, waste and other emissions
that it generates.
Steadily making progress with
environmental measures, such as energy
conservation and resource saving, at each
stage of its business activities, from
development and design to production and
logistics, NSK is also aiming to reduce the
environmental burden on society as a whole.
This, the Company does by procuring
environmentally friendly components/raw
materials and working together with suppliers
and customers in advancing the development,
manufacture and promotion of environmentally
friendly products that allow customers to save
energy and conserve resources.
INPUT (Global)
Materials and parts
Steel
756 × 103 tons
Oils and greases
21 × 103 tons
Energy
Energy
Fuel
17,088TJ
2,426TJ
Electricity and heat
14,662TJ
Water supply
Suppliers
Components/
raw materials
Reduction of
Reduction of
environmental impact
environmental impact
Minimization of the
environmental
impact from
business activities
NSK
Development
Design
Procurement
Water
4,713 × 103 m3
Manufacturing
Groundwater
1,869 × 103 m3
General water
2,325 × 103 m3
Industrial water
519 × 103 m3
Materials and parts (Japan)
(Environmentally harmful substances)
PRTR-designated substances
490 tons
Distribution
Reduction of
Reduction of
environmental impact
environmental impact
Products/services
Customers
Maximization of an
environmental
contribution
through products
OUTPUT (Global)
Atmospheric gases
Greenhouse gases (CO2 equivalent)*1
Fuel combustion (Scope 1*2)
Electric power/heat use (Scope 2*2)
(Reference) Indirect emissions (Scope 3*2)
NOx
SOx
997.3 × 103 tons
143.0 × 103 tons
854.3 × 103 tons
2,038.7 × 103 tons
132 tons
50 tons
Waste
223.5 × 103 tons
Total waste
(Japan 105.5×103 tons, outside Japan 106.0×103 tons)
205.1 × 103 tons
Recycled
3.0 × 103 tons
Landfill waste
15.4 × 103 tons
Incinerated waste and water treatment
Water quantity
Wastewater
Rivers
Sewage system
BOD
3,040 × 103 m3
453 × 103 m3
2,587 × 103 m3
1.3 tons
Environmentally harmful
substances (Japan)
Discharge/transfer of PRTR-designated substances
VOC
105 tons
154 tons
*1 The amount of greenhouse gas emissions is multiplied by each region's global warming potential. 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’s
CO2 Emissions from Fuel Combustion.
*2 The amount of greenhouse gas emissions for Scope1 to Scope 3 are calculated based on the GHG Protocol calculation standards. Scope 1 is the amount of emissions from a
company's own fuel use; Scope 2 is the amount of emissions from power plants, etc., due to the supply of electric power and heat from outside (consumed by a company); and Scope 3
is the amount of indirect emissions, such as emissions from supplier manufacturing processes for procured components and raw materials.
50
NSK REPORT 2018
Developing Environmentally Friendly Products
The products of the future must perform better than those of today 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 of 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 is aiming to contribute to the increased sophistication of the machinery in which its products are incorporated,
the development of environmentally friendly industries as well as aiming for the maximization of an environmental contribution through its products.
Basic Policy for the Development of Environmentally Friendly Products
The NSK Group 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 vibration levels and low noise and dust emissions.
NSK Eco-Efficiency Indicators (Neco)
NSK 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
had developed 224 environmentally friendly products by fiscal 2017.
Neco =
Product value V (product life, functions)
Environmental impact E
(resource and energy conservation)
Product value UP
Environmental impact DOWN
＝
Neco UP
Newly developed
product
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 2017
In fiscal 2017, NSK developed five new environmentally friendly products that help customers conserve energy and resources.
Products
Technology
Developed by NSK
Environmental Benefits
for NSK’s Customers
Neco
Pawl-type one-way clutches for hybrid
vehicles
http://www.nsk.com/company/news/2017/press0605a.html
Low-noise thrust needle roller bearings for
electric vehicles and hybrid vehicles
http://www.nsk.com/company/news/2017/1206a.html
Long-life roller bearings for automobile
transmissions
http://www.nsk.com/jp/company/news/2018/0221a.html (Japanese)
High-performance tapered roller hub unit bearings for
pickup trucks, large SUVs, and commercial vehicles
http://www.nsk.com/company/news/2018/0405a.html
Low-friction, high-performance seals for
deep groove ball bearings
http://www.nsk.com/jp/company/news/2017/1006a.html (Japanese)
Applicable to lubricant-free
environment
Low friction loss
Smaller, lighter
Improved fuel economy
Lighter
(resource conservation)
Low friction loss
Weight reduction
Improved energy
economy
Longer life
Lighter (resource
conservation)
Improved fuel economy
Improved reliability
Improved reliability
Low friction loss
Improved fuel economy
Both high
performance and
low friction loss
Improved reliability
Energy savings
2.3
2.1
1.3
1.3
1.4
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).
NSK REPORT 2018
51
The Underlying Strength of Corporate Value
CSR/ESG Management
Related Key Stakeholders
Material Issue: Environmental Management
Customers
Employees
Suppliers
Local
Communities
Shareholders
and Investors
Future
Generations
Why Environmental Management Matters
The realization of a sustainable society in which economic development and environmental protection coexist is becoming an
increasingly pressing issue due to growing concern over the impact of climate change, particularly in light of the recent succession of
extreme weather events across the world. Accordingly, there is growing competition to develop new technologies and products that
help decrease environmental impact.
NSK’s Approach
NSK adheres to the principle that global environmental protection, as outlined in the
Company’s mission statement, must be an ever-present 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 and every one of its directors and 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.
Environmental Management
NSK has established a Global Environment Conservation Committee as its highest
decision-making body for environmental management. Chaired by a senior vice
president and composed of the officers involved, such as from business division
headquarters and technology development divisions, the Global Environment
Conservation Committee deliberates NSK’s environmental action plans and also
reviews and revises the progress of initiatives. On the basis of the Committee’s
decisions, theme-based specialized subcommittees–such as the energy, resource
conservation, environmental product, logistics, and green office subcommittees–,
NSK’s Environmental Division as well as its headquarters in Europe, the Americas
and China coordinate their necessary activities, and each department and each
business site work together to promote environmental efforts.
Held three times in fiscal 2017, the Global Environment Conservation
Committee examined and discussed, for example, the setting of medium- and
long-term activity targets as well as activities contributing to the reduction of CO2
emissions at the customer use stage through its products.
NSK Environmental Policy
Our commitment to environmental management forms the basis of our
existence and our pursuits. We are determined to take independent and
assertive action in aiming to establish sustainable societies.
1. Prevention of Global Warming
To actively support efforts to prevent global warming by developing
environmentally friendly manufacturing processes and technologies.
2. Reduction of Environmental Impact
To establish and continually improve environmental management systems and
systems for the management of chemical substances in products; to comply
with regulations, to prevent pollution, and to reduce environmental impact.
3. Contribution to Societies
To be actively involved in the social development of local
communities where we operate by promoting our global corporate
activities, to create affluent societies that are in harmony with the
environment, and to promote the preservation of biodiversity.
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
Input and Output of Global Business Activities (FY2017)
NSK works hard to continually reduce its
environmental impact and to use energy and
resources in the most effective manner by
INPUT (Global)
Materials and parts
quantifying the amount of resources used in its
Steel
756 × 103 tons
Suppliers
Components/
raw materials
Reduction of
Reduction of
environmental impact
environmental impact
business activities and the amount of
greenhouse gases, waste and other emissions
that it generates.
Steadily making progress with
environmental measures, such as energy
conservation and resource saving, at each
stage of its business activities, from
development and design to production and
logistics, NSK is also aiming to reduce the
environmental burden on society as a whole.
This, the Company does by procuring
environmentally friendly components/raw
materials and working together with suppliers
and customers in advancing the development,
manufacture and promotion of environmentally
friendly products that allow customers to save
energy and conserve resources.
Oils and greases
21 × 103 tons
Energy
Energy
Fuel
17,088TJ
2,426TJ
Electricity and heat
14,662TJ
Water supply
Minimization of the
environmental
impact from
business activities
NSK
Development
Design
Procurement
Groundwater
1,869 × 103 m3
General water
2,325 × 103 m3
Industrial water
519 × 103 m3
Materials and parts (Japan)
(Environmentally harmful substances)
PRTR-designated substances
490 tons
Distribution
Reduction of
Reduction of
environmental impact
environmental impact
Products/services
BOD
Customers
Maximization of an
environmental
contribution
through products
OUTPUT (Global)
Atmospheric gases
Greenhouse gases (CO2 equivalent)*1
Fuel combustion (Scope 1*2)
Electric power/heat use (Scope 2*2)
997.3 × 103 tons
143.0 × 103 tons
854.3 × 103 tons
(Reference) Indirect emissions (Scope 3*2)
2,038.7 × 103 tons
NOx
SOx
132 tons
50 tons
Waste
Total waste
223.5 × 103 tons
(Japan 105.5×103 tons, outside Japan 106.0×103 tons)
Recycled
Landfill waste
205.1 × 103 tons
3.0 × 103 tons
Water quantity
Wastewater
Rivers
Sewage system
3,040 × 103 m3
453 × 103 m3
2,587 × 103 m3
1.3 tons
Environmentally harmful
substances (Japan)
Discharge/transfer of PRTR-designated substances
VOC
105 tons
154 tons
Water
4,713 × 103 m3
Manufacturing
Incinerated waste and water treatment
15.4 × 103 tons
*1 The amount of greenhouse gas emissions is multiplied by each region's global warming potential. 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’s
CO2 Emissions from Fuel Combustion.
*2 The amount of greenhouse gas emissions for Scope1 to Scope 3 are calculated based on the GHG Protocol calculation standards. Scope 1 is the amount of emissions from a
company's own fuel use; Scope 2 is the amount of emissions from power plants, etc., due to the supply of electric power and heat from outside (consumed by a company); and Scope 3
is the amount of indirect emissions, such as emissions from supplier manufacturing processes for procured components and raw materials.
50
NSK REPORT 2018
Developing Environmentally Friendly Products
The products of the future must perform better than those of today 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 of 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 is aiming to contribute to the increased sophistication of the machinery in which its products are incorporated,
the development of environmentally friendly industries as well as aiming for the maximization of an environmental contribution through its products.
Basic Policy for the Development of Environmentally Friendly Products
The NSK Group 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 vibration levels and low noise and dust emissions.
NSK Eco-Efficiency Indicators (Neco)
NSK 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
had developed 224 environmentally friendly products by fiscal 2017.
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 2017
In fiscal 2017, NSK developed five new environmentally friendly products that help customers conserve energy and resources.
Products
Technology
Developed by NSK
Environmental Benefits
for NSK’s Customers
Neco
Pawl-type one-way clutches for hybrid
vehicles
http://www.nsk.com/company/news/2017/press0605a.html
Low-noise thrust needle roller bearings for
electric vehicles and hybrid vehicles
http://www.nsk.com/company/news/2017/1206a.html
Long-life roller bearings for automobile
transmissions
http://www.nsk.com/jp/company/news/2018/0221a.html (Japanese)
High-performance tapered roller hub unit bearings for
pickup trucks, large SUVs, and commercial vehicles
http://www.nsk.com/company/news/2018/0405a.html
Low-friction, high-performance seals for
deep groove ball bearings
http://www.nsk.com/jp/company/news/2017/1006a.html (Japanese)
Applicable to lubricant-free
environment
Low friction loss
Smaller, lighter
Improved fuel economy
Lighter
(resource conservation)
Low friction loss
Weight reduction
Improved energy
economy
Longer life
Lighter (resource
conservation)
Improved fuel economy
Improved reliability
Low friction loss
Improved reliability
Improved fuel economy
Both high
performance and
low friction loss
Improved reliability
Energy savings
2.3
2.1
1.3
1.3
1.4
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).
NSK REPORT 2018
51
The Underlying Strength of Corporate Value
CSR/ESG Management
Material Issue: Human Resource Management
Related Key Stakeholders
Employees
Future
Generations
Why Human Resource Management Matters
At NSK, we see our workforce as a vital asset in the continued success of our
business. We know that employees who are fully engaged in their work have
the greatest potential for growth, which can ultimately lead to the sustainable
growth of the Company as a whole. This is why we are 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
Making the most of
diverse human resources
Realization
of diversity
Facilitating
a work-life balance
Making Use of
Individuals in a Fair Manner
Dynamic Work Environment
In our Management Principles, NSK clearly states that our aim is “to
provide challenges and opportunities to our employees, channeling
their skills and fostering their creativity and individuality.” In
acknowledgment of the fact that each and every employee is a priceless
asset, we have committed ourselves to “maximizing individual talent in a
fair and dynamic work environment.” This commitment features three
key areas of focus: leveraging a diverse workforce, creating a motivating
workplace, and creating workplaces and opportunities that foster
employee growth. We strive to create and maintain engaging work
environments that inspire our employees and enable us to develop the
human resources we need to lead NSK in the future.
Creating environments
where employees can
work with vitality
Respect of fundamental
rights at work
Creating secure, safe, and
comfortable workplace
Maintenance and
improvement of health
Prohibiting Discrimination and Respecting Fundamental Rights at Work
Providing opportunities
and workplaces that
foster the growth of
self-motivated employees
Realization of
talent management
Providing workplaces that
foster self-development
and offer educational
opportunities
NSK respects the Universal Declaration of Human Rights and promotes activities based on the declaration’s ideals. Having clearly stated that our
aim is “to provide challenges and opportunities to our employees, channeling their skills and fostering their creativity and individuality” in our
Management Principles (see P. 11), we have also defined the “prohibition of unfair discrimination” and “respect for basic fundamental rights at
work” in the NSK Code of Corporate Ethics. We prohibit discrimination̶on the basis of race, appearance, belief, gender, social status, lineage,
ethnicity, nationality, age or disability̶as well as harassment, forced labor and child labor, and aim to create workplaces that engage and inspire
our diverse workforce. We strive to provide equal opportunity in recruitment, job assignment, evaluations and other aspects of employment.
In addition to making NSK’s stance on human rights better known among our employees, we also work to identify acts that run contrary to
this stance through internal audits and our internal reporting system, and take immediate action to rectify any improper behavior.
Creating an Organization that Embraces Diversity
Promoting Diversity and Inclusion
Leveraging Global Talent
It is our conviction that employing people from diverse
backgrounds̶in gender, age, nationality, culture, lifestyle and
values̶will foster a work environment full of new perspectives
and ways of thinking. We believe that this will in turn strengthen
our competitiveness and ability to avoid risks. For this reason,
NSK promotes the creation of a diverse and inclusive corporate
culture that embraces a wide range of people and the values they
hold. Our initiatives in this area include diversity training and
LGBT* seminars for both executives and employees, and directed
talks from the president and other members of senior
management.
*LGBT is an acronym for lesbian, gay, bisexual, and transgender.
In our Management Principles, NSK clearly states that our aim is “to
provide challenges and opportunities to our employees, channeling
their skills and fostering their creativity and individuality,” and “to
manage our business from an international perspective and to
develop a strong presence throughout the world.” This is why NSK
places a high priority on developing globally-focused employees in
each region and country where we operate. We believe that
developing corporate leaders with a global mindset together with
local employees that can support their vision will allow us to
optimize and increase the efficiency of our business operations. 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, shared leadership competencies
for the organization, and guidelines for global mobility.
Promoting the Advancement of Women in the Workplace (Japan)
NSK believes that having more women empowered to actively
demonstrate their abilities in the workplace will encourage
diversity and inclusion and enhance the competitiveness of the
Company. To achieve this, we have begun taking efforts to
improve our female hiring rate and expand work options for
female employees. Our 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 leaders.
52
NSK REPORT 2018
▶Female Employee Rate and
Female Manager Rate
Female
employees
Female
managers
FY2016
FY2017
10.7%
10.5%
1.2%
1.6%
Includes employees of NSK Ltd. and major
NSK Group companies in Japan
Support for Working Parents and Caregivers (Japan)
To create a workplace that meets the needs of a diverse workforce
and allows each and every one of our employees to thrive, NSK is
taking active efforts to provide support for working parents and
caregivers. Our programs to support these employees go above
and beyond the legal requirements. We not only provide
comprehensive support for working parents and caregivers, but
are taking efforts to create a work environment where they can
realize their full potential.
Many employees are eager to excel in the workplace despite
the time constraints of parenthood. This is why we provide flextime
for working parents and offer onsite childcare service on working
public holidays when regular daycare facilities close down. We
also provide support for employees with family members requiring
long-term care. We offer seminars that cover the basics of family
care as well as the company programs available to them with the
aim of reducing the stress associated with long-term care,
creating opportunities for employees to discuss their concerns,
and ultimately allowing them to continue working as they start
providing care for a family member in need.
▶Support Programs to Provide Flexibility
for Working Parents and Caregivers*
NSK
Japanese law
Parental leave
Through end of April following
child’s third birthday
(first five days are paid)
Reduced hours for
working parents
Through end of March of
child’s 6th grade year
Up to 2 years
(unpaid)
Up to 3 years
Caregiver leave
Up to 1 year
Up to 93 days
Reduced hours for
working caregivers
Exemption from
half-day limit
Up to 3 years
Up to 3 years
Usually limited to 12 half-days per year, employees
are exempted when caring for sick family members,
providing childcare, or undergoing infertility treatments
Re-employment
registration system
Employees who resign to follow a transferring spouse
can register for re-employment at NSK upon their return
*Includes employees of NSK Ltd. and major NSK Group companies in Japan
Work Style Reforms (Japan)
It is our conviction at NSK that having employees who enjoy and are actively engaged in both their work and personal lives will have a
beneficial impact on our business. We believe that giving employees more space away from work to cultivate their personal lives will allow
them to be more productive and produce higher quality work on the job. For this reason, in addition to making flextime available to
employees, NSK is striving to better manage working hours and to encourage employees to take their annual paid leave. We know that in
order to create a place for our diverse workforce to thrive, we need to offer more flexibility in terms of both hours and location. We are
currently working to expand our IT infrastructure and have begun a trial telecommuting program, allowing select employees to work from
home or a satellite office location. In order to boost job satisfaction, NSK also runs seminars and other programs to raise awareness̶of
both managers and employees̶on the need for work style reform.
Human Resource Development Programs
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. We are also working to promote career advancement and motivation by orchestrating strategic job rotations
that serve to stretch the skills and abilities of our employees. Through a variety of educational offerings and training programs that further
refine our people’s abilities, knowledge and character, NSK provides numerous opportunities and forums for further development.
In addition to targeted training geared for managers and other levels of the organization, each year NSK runs two internal business
school courses̶the Japan Management College and the Global Management College̶which provide accelerated training for future
leaders of the organization. Meanwhile, we are also considering ways to offer education at external institutions and courses in liberal arts
programs, with an aim to further broaden the mindsets of our employees. We also offer professional education by function, such as the NSK
Manufacturing Education and Training Center, established to facilitate the transfer of technical skills required in manufacturing, and the
NSK Institute of Technology (NIT), which conducts comprehensive technical training for engineers. In addition, we have been focusing on
cultural and language training in order to equip employees with the skills they need to communicate effectively with people from around the
world.
In fiscal 2017, we invested approximately ¥76,000 per person in employee development, allowing us to improve the quality of our
education and training programs and make them available to more employees.
Health and Wellness Initiatives
The physical and mental health of NSK employees and their families is an invaluable asset to the
Company. We see an investment in health as an investment in corporate value, and as such, NSK is
committed to a full range of initiatives to promote employee health and wellness.
In Japan, we are working to spread awareness of the role of corporate health management and
are actively encouraging our employees to be more conscious of their health. In fiscal 2017, we put up
posters in sites throughout Japan to promote awareness of secondhand
smoke and encourage smokers to kick the habit. We also distributed
the NSK Health and Wellness Initiative 2018 handbook to employees
and executives in Japan. In addition, we shared employee efforts to
improve their wellbeing in the company newsletter and on our internal
website.
NSK has been recognized externally for its health and wellness
initiatives, receiving certification from Japan’s Ministry of Economy,
Trade and Industry as an Outstanding Health and Productivity
Management Organization in the large enterprise category.
Poster to promote awareness of
secondhand smoke
NSK REPORT 2018
53
The Underlying Strength of Corporate Value
CSR/ESG Management
Material Issue: Human Resource Management
Related Key Stakeholders
Employees
Future
Generations
Why Human Resource Management Matters
At NSK, we see our workforce as a vital asset in the continued success of our
business. We know that employees who are fully engaged in their work have
the greatest potential for growth, which can ultimately lead to the sustainable
growth of the Company as a whole. This is why we are 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.
Making the most of
diverse human resources
Realization
of diversity
Facilitating
a work-life balance
Making Use of
Individuals in a Fair Manner
Dynamic Work Environment
NSK’s Approach
In our Management Principles, NSK clearly states that our aim is “to
provide challenges and opportunities to our employees, channeling
their skills and fostering their creativity and individuality.” In
acknowledgment of the fact that each and every employee is a priceless
asset, we have committed ourselves to “maximizing individual talent in a
fair and dynamic work environment.” This commitment features three
key areas of focus: leveraging a diverse workforce, creating a motivating
workplace, and creating workplaces and opportunities that foster
employee growth. We strive to create and maintain engaging work
environments that inspire our employees and enable us to develop the
human resources we need to lead NSK in the future.
Creating environments
where employees can
work with vitality
Respect of fundamental
rights at work
Creating secure, safe, and
comfortable workplace
Maintenance and
improvement of health
Providing opportunities
and workplaces that
foster the growth of
self-motivated employees
Realization of
talent management
Providing workplaces that
foster self-development
and offer educational
opportunities
Prohibiting Discrimination and Respecting Fundamental Rights at Work
NSK respects the Universal Declaration of Human Rights and promotes activities based on the declaration’s ideals. Having clearly stated that our
aim is “to provide challenges and opportunities to our employees, channeling their skills and fostering their creativity and individuality” in our
Management Principles (see P. 11), we have also defined the “prohibition of unfair discrimination” and “respect for basic fundamental rights at
work” in the NSK Code of Corporate Ethics. We prohibit discrimination̶on the basis of race, appearance, belief, gender, social status, lineage,
ethnicity, nationality, age or disability̶as well as harassment, forced labor and child labor, and aim to create workplaces that engage and inspire
our diverse workforce. We strive to provide equal opportunity in recruitment, job assignment, evaluations and other aspects of employment.
In addition to making NSK’s stance on human rights better known among our employees, we also work to identify acts that run contrary to
this stance through internal audits and our internal reporting system, and take immediate action to rectify any improper behavior.
Creating an Organization that Embraces Diversity
Promoting Diversity and Inclusion
Leveraging Global Talent
It is our conviction that employing people from diverse
backgrounds̶in gender, age, nationality, culture, lifestyle and
values̶will foster a work environment full of new perspectives
and ways of thinking. We believe that this will in turn strengthen
our competitiveness and ability to avoid risks. For this reason,
NSK promotes the creation of a diverse and inclusive corporate
In our Management Principles, NSK clearly states that our aim is “to
provide challenges and opportunities to our employees, channeling
their skills and fostering their creativity and individuality,” and “to
manage our business from an international perspective and to
develop a strong presence throughout the world.” This is why NSK
places a high priority on developing globally-focused employees in
culture that embraces a wide range of people and the values they
each region and country where we operate. We believe that
hold. Our initiatives in this area include diversity training and
developing corporate leaders with a global mindset together with
LGBT* seminars for both executives and employees, and directed
local employees that can support their vision will allow us to
talks from the president and other members of senior
management.
*LGBT is an acronym for lesbian, gay, bisexual, and transgender.
optimize and increase the efficiency of our business operations. 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, shared leadership competencies
for the organization, and guidelines for global mobility.
Promoting the Advancement of Women in the Workplace (Japan)
NSK believes that having more women empowered to actively
demonstrate their abilities in the workplace will encourage
diversity and inclusion and enhance the competitiveness of the
Company. To achieve this, we have begun taking efforts to
improve our female hiring rate and expand work options for
female employees. Our 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 leaders.
52
NSK REPORT 2018
▶Female Employee Rate and
Female Manager Rate
Female
employees
Female
managers
FY2016
FY2017
10.7%
10.5%
1.2%
1.6%
Includes employees of NSK Ltd. and major
NSK Group companies in Japan
Support for Working Parents and Caregivers (Japan)
To create a workplace that meets the needs of a diverse workforce
and allows each and every one of our employees to thrive, NSK is
taking active efforts to provide support for working parents and
caregivers. Our programs to support these employees go above
and beyond the legal requirements. We not only provide
comprehensive support for working parents and caregivers, but
are taking efforts to create a work environment where they can
realize their full potential.
Many employees are eager to excel in the workplace despite
the time constraints of parenthood. This is why we provide flextime
for working parents and offer onsite childcare service on working
public holidays when regular daycare facilities close down. We
also provide support for employees with family members requiring
long-term care. We offer seminars that cover the basics of family
care as well as the company programs available to them with the
aim of reducing the stress associated with long-term care,
creating opportunities for employees to discuss their concerns,
and ultimately allowing them to continue working as they start
providing care for a family member in need.
▶Support Programs to Provide Flexibility
for Working Parents and Caregivers*
Parental leave
NSK
Through end of April following
child’s third birthday
(first five days are paid)
Reduced hours for
working parents
Through end of March of
child’s 6th grade year
Japanese law
Up to 2 years
(unpaid)
Up to 3 years
Caregiver leave
Up to 1 year
Up to 93 days
Reduced hours for
working caregivers
Exemption from
half-day limit
Up to 3 years
Up to 3 years
Usually limited to 12 half-days per year, employees
are exempted when caring for sick family members,
providing childcare, or undergoing infertility treatments
Re-employment
registration system
Employees who resign to follow a transferring spouse
can register for re-employment at NSK upon their return
*Includes employees of NSK Ltd. and major NSK Group companies in Japan
Work Style Reforms (Japan)
It is our conviction at NSK that having employees who enjoy and are actively engaged in both their work and personal lives will have a
beneficial impact on our business. We believe that giving employees more space away from work to cultivate their personal lives will allow
them to be more productive and produce higher quality work on the job. For this reason, in addition to making flextime available to
employees, NSK is striving to better manage working hours and to encourage employees to take their annual paid leave. We know that in
order to create a place for our diverse workforce to thrive, we need to offer more flexibility in terms of both hours and location. We are
currently working to expand our IT infrastructure and have begun a trial telecommuting program, allowing select employees to work from
home or a satellite office location. In order to boost job satisfaction, NSK also runs seminars and other programs to raise awareness̶of
both managers and employees̶on the need for work style reform.
Human Resource Development Programs
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. We are also working to promote career advancement and motivation by orchestrating strategic job rotations
that serve to stretch the skills and abilities of our employees. Through a variety of educational offerings and training programs that further
refine our people’s abilities, knowledge and character, NSK provides numerous opportunities and forums for further development.
In addition to targeted training geared for managers and other levels of the organization, each year NSK runs two internal business
school courses̶the Japan Management College and the Global Management College̶which provide accelerated training for future
leaders of the organization. Meanwhile, we are also considering ways to offer education at external institutions and courses in liberal arts
programs, with an aim to further broaden the mindsets of our employees. We also offer professional education by function, such as the NSK
Manufacturing Education and Training Center, established to facilitate the transfer of technical skills required in manufacturing, and the
NSK Institute of Technology (NIT), which conducts comprehensive technical training for engineers. In addition, we have been focusing on
cultural and language training in order to equip employees with the skills they need to communicate effectively with people from around the
world.
In fiscal 2017, we invested approximately ¥76,000 per person in employee development, allowing us to improve the quality of our
education and training programs and make them available to more employees.
Health and Wellness Initiatives
The physical and mental health of NSK employees and their families is an invaluable asset to the
Company. We see an investment in health as an investment in corporate value, and as such, NSK is
committed to a full range of initiatives to promote employee health and wellness.
In Japan, we are working to spread awareness of the role of corporate health management and
are actively encouraging our employees to be more conscious of their health. In fiscal 2017, we put up
posters in sites throughout Japan to promote awareness of secondhand
smoke and encourage smokers to kick the habit. We also distributed
the NSK Health and Wellness Initiative 2018 handbook to employees
and executives in Japan. In addition, we shared employee efforts to
improve their wellbeing in the company newsletter and on our internal
website.
NSK has been recognized externally for its health and wellness
initiatives, receiving certification from Japan’s Ministry of Economy,
Trade and Industry as an Outstanding Health and Productivity
Management Organization in the large enterprise category.
Poster to promote awareness of
secondhand smoke
NSK REPORT 2018
53
The Underlying Strength of Corporate Value
CSR/ESG Management
Related Key Stakeholders
Material Issue: Supply Chain Management
Customers Employees Suppliers
Local
Communities
Material Issue: Corporate Governance
Other related information
http://www.nsk.com/company/governance/index.html
Why Supply Chain Management Matters
NSK is supported by an extensive, global network of suppliers. We strive to build quality, trusting relationships that foster the
continued growth and development of all parties. We are highly conscious of the many risks involved in navigating global
procurement, from human rights issues to protecting the environment. Every step of the way, from the mining of resources to final
assembly, we work to create a sustainable, safe, and clean processes that have a positive impact on society. We strive to mitigate
business continuity risks, and quickly resolve any concerns that may arise as we monitor all levels of the supply chain.
Sustainable and Responsible Procurement
NSK has established a basic policy governing procurement in order to
ensure fair procurement practices that also consider the potential impact
on society and the environment. We share this policy with all suppliers,
and effectively apply it to facilitate and advance socially-responsible,
environmentally-friendly procurement.
Procurement Policy Briefings
NSK holds procurement policy briefings every year to explain its
procurement and other policies to major suppliers, and we ask them
to reinforce their corporate-social responsibility efforts.
In fiscal 2017, we focused on sustainability, explaining the
Sustainable Development Goals (SDGs), ISO 20400, and other
related initiatives. We solicit a strong commitment to sustainable
procurement, and the timely and accurate disclosure of
procurement related information. We also emphasize the
importance of human rights, and work closely with suppliers to
mitigate human-rights-related risks across the entire supply chain.
NSK Group Basic Policy for Procurement
1) Economic Rationality
Conduct transactions that are economically rational.
2) Fairness and Impartiality
Conduct transactions in a fair and impartial manner regardless of
region, company size, or whether the counterparty is a new or
existing business partner.
3) Compliance with Applicable Laws
I. Strictly follow the procurement laws and regulations of each
country, and maintain awareness of their important societal role.
II. Conduct training and education programs to ensure strict
observance of procurement laws and regulations.
4) Respect for Moral Standards
I. Adhere to strict moral standards.
-Transactions with counterparties and/or potential counterparties
shall not be entered into if there are personal interests involved.
-Transactions with counterparties and/or potential counterparties
shall not be entered into for the purpose of personal gain.
-Companies shall not compel counterparties and/or
potential counterparties to make donations, etc.
II. When entering into transactions with subcontracting
firms, strive to build a strong, cooperative partnership
and maintain a stable supply.
5) Environmental Preservation, Resource Conservation
(Green Procurement)
Promote environmental protection by procuring
environmentally-conscious products from counterparties that
make positive efforts toward the preservation of the environment.
6) Employee Training and Education
Provide procurement training and education to employees.
Promoting and Enhancing CSR Activities
Strong Awareness of Human Rights in Procurement Activities
NSK distributes NSK Supplier CSR Guidelines and NSK Group Green
Procurement Standards asks suppliers to supply safe products,
comply with laws and regulations, protect human rights, safety, and
health, and give consideration to preserving the environment. Our
basic business contracts contain clauses that pertain to
environmental, social, and governance (ESG) conduct and
performance.
Furthermore, NSK regularly monitors suppliers through a CSR
self-assessment survey every two years on the state of their CSR
activities and feeds back a summary of results to all suppliers.
Initiatives to Enhance Supplier Quality
NSK regularly holds seminars for suppliers on technical and quality
assurance topics. We share current issues and engage in initiatives
with suppliers to continuously improve quality. NSK also strives to
increase the level of quality by having personnel from NSK
headquarters, regional headquarters, and plants around the world
visit suppliers, audit their processes, and exchange information.
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. NSK has conducted a conflict mineral survey
every year with the cooperation of suppliers of parts and materials
used in NSK products. Surveys through 2017 have not identified
any case of conflict minerals produced in restricted regions. NSK
takes steps to avoid using parts or materials that are suspected to
be related to armed conflict.
Additionally, in response to the UK Modern Slavery Act, which
was enacted in 2015, NSK revised the NSK Supplier CSR
Guidelines and the checklists of the CSR self-assessment to
better monitor human rights risks throughout the supply chain.
Building a Disaster Resistant Supply Chain
NSK has implemented a Supplier Safety Confirmation System. The
system can be used to quickly confirm the situation at suppliers in
the event of a disaster. This enables NSK to proactively work with
suppliers to resolve supply chain issues in challenging situations.
Drills are conducted regularly to ensure suppliers properly utilize
the system. NSK has also asked major suppliers to create their
own business continuity plans and verified their progress.
54
NSK REPORT 2018
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.
between the former and the latter.
3) To strengthen supervisory organizations’ oversight of the executive organizations through cooperation
4) To improve the fairness of management by strengthening compliance systems.
Corporate Governance Structure
Current Structure and Operating Status
(1) Structure
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
taking the perspective of outside stakeholders. In principle, the
ratio of outside to internal directors is at least one to three.
As of August 2018, NSK’s Board of Directors consisted of 12
directors, of which five were outside directors (four men, one
woman) and seven internal directors (including one non-executive
director). This composition enables the Board to make appropriate
decisions and implement effective oversight by striking a balance
between internal directors' business expertise and outside
directors' broad insight.
(3) A Company with Three Committees (Nomination,
Audit and Compensation) system
that aim to contribute to the sustained mid- and long-term
The majority of Nomination, Audit and Compensation committee
improvement of corporate value, while properly supervising the
members, including all three chairs, are outside directors, with
state of operational executive functions as a supervisory
the remainder being internal directors. In the fiscal year ended
organization.
(2) Composition of the Board of Directors
The Board of Directors comprises internal directors with insight
into business and industry and outside directors who provide
supervisory functions and advice from an objective standpoint,
▶NSK’s Corporate Governance Structure
March 31, 2018, the Nomination, Audit and Compensation
committees convened meetings six times, 14 times and four
times, respectively, fulilling their critical roles to ensure
transparent and sound management decision making.
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
Nomination
Committee
Audit
Committee
NSK REPORT 2018
55
Material Issue: Supply Chain Management
Customers Employees Suppliers
Local
Communities
Material Issue: 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
(1) Structure
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.
(2) Composition of the Board of Directors
The Board of Directors comprises internal directors with insight
into business and industry and outside directors who provide
supervisory functions and advice from an objective standpoint,
▶NSK’s Corporate Governance Structure
taking the perspective of outside stakeholders. In principle, the
ratio of outside to internal directors is at least one to three.
As of August 2018, NSK’s Board of Directors consisted of 12
directors, of which five were outside directors (four men, one
woman) and seven internal directors (including one non-executive
director). This composition enables the Board to make appropriate
decisions and implement effective oversight by striking a balance
between internal directors' business expertise and outside
directors' broad insight.
(3) A Company with Three Committees (Nomination,
Audit and Compensation) system
The majority of Nomination, Audit and Compensation committee
members, including all three chairs, are outside directors, with
the remainder being internal directors. In the fiscal year ended
March 31, 2018, the Nomination, Audit and Compensation
committees convened meetings six times, 14 times and four
times, respectively, fulilling their critical roles to ensure
transparent and sound management decision making.
General Shareholders’ Meeting
The Underlying Strength of Corporate Value
CSR/ESG Management
Related Key Stakeholders
Why Supply Chain Management Matters
NSK is supported by an extensive, global network of suppliers. We strive to build quality, trusting relationships that foster the
continued growth and development of all parties. We are highly conscious of the many risks involved in navigating global
procurement, from human rights issues to protecting the environment. Every step of the way, from the mining of resources to final
assembly, we work to create a sustainable, safe, and clean processes that have a positive impact on society. We strive to mitigate
business continuity risks, and quickly resolve any concerns that may arise as we monitor all levels of the supply chain.
Sustainable and Responsible Procurement
NSK has established a basic policy governing procurement in order to
ensure fair procurement practices that also consider the potential impact
on society and the environment. We share this policy with all suppliers,
and effectively apply it to facilitate and advance socially-responsible,
environmentally-friendly procurement.
Procurement Policy Briefings
NSK holds procurement policy briefings every year to explain its
procurement and other policies to major suppliers, and we ask them
to reinforce their corporate-social responsibility efforts.
In fiscal 2017, we focused on sustainability, explaining the
Sustainable Development Goals (SDGs), ISO 20400, and other
related initiatives. We solicit a strong commitment to sustainable
procurement, and the timely and accurate disclosure of
procurement related information. We also emphasize the
importance of human rights, and work closely with suppliers to
mitigate human-rights-related risks across the entire supply chain.
NSK Group Basic Policy for Procurement
1) Economic Rationality
Conduct transactions that are economically rational.
2) Fairness and Impartiality
Conduct transactions in a fair and impartial manner regardless of
region, company size, or whether the counterparty is a new or
existing business partner.
3) Compliance with Applicable Laws
I. Strictly follow the procurement laws and regulations of each
country, and maintain awareness of their important societal role.
II. Conduct training and education programs to ensure strict
observance of procurement laws and regulations.
4) Respect for Moral Standards
I. Adhere to strict moral standards.
-Transactions with counterparties and/or potential counterparties
shall not be entered into if there are personal interests involved.
-Transactions with counterparties and/or potential counterparties
shall not be entered into for the purpose of personal gain.
-Companies shall not compel counterparties and/or
potential counterparties to make donations, etc.
II. When entering into transactions with subcontracting
firms, strive to build a strong, cooperative partnership
and maintain a stable supply.
5) Environmental Preservation, Resource Conservation
(Green Procurement)
Promote environmental protection by procuring
environmentally-conscious products from counterparties that
make positive efforts toward the preservation of the environment.
6) Employee Training and Education
Provide procurement training and education to employees.
Promoting and Enhancing CSR Activities
Strong Awareness of Human Rights in Procurement Activities
NSK distributes NSK Supplier CSR Guidelines and NSK Group Green
Procurement Standards asks suppliers to supply safe products,
NSK has a policy of not using conflict minerals and takes care in
its procurement activities to avoid benefitting armed groups that
comply with laws and regulations, protect human rights, safety, and
violate human rights. NSK has conducted a conflict mineral survey
health, and give consideration to preserving the environment. Our
every year with the cooperation of suppliers of parts and materials
basic business contracts contain clauses that pertain to
environmental, social, and governance (ESG) conduct and
performance.
used in NSK products. Surveys through 2017 have not identified
any case of conflict minerals produced in restricted regions. NSK
takes steps to avoid using parts or materials that are suspected to
Furthermore, NSK regularly monitors suppliers through a CSR
be related to armed conflict.
self-assessment survey every two years on the state of their CSR
Additionally, in response to the UK Modern Slavery Act, which
activities and feeds back a summary of results to all suppliers.
was enacted in 2015, NSK revised the NSK Supplier CSR
Guidelines and the checklists of the CSR self-assessment to
better monitor human rights risks throughout the supply chain.
Initiatives to Enhance Supplier Quality
NSK regularly holds seminars for suppliers on technical and quality
assurance topics. We share current issues and engage in initiatives
with suppliers to continuously improve quality. NSK also strives to
increase the level of quality by having personnel from NSK
headquarters, regional headquarters, and plants around the world
visit suppliers, audit their processes, and exchange information.
54
NSK REPORT 2018
Building a Disaster Resistant Supply Chain
NSK has implemented a Supplier Safety Confirmation System. The
system can be used to quickly confirm the situation at suppliers in
the event of a disaster. This enables NSK to proactively work with
suppliers to resolve supply chain issues in challenging situations.
Drills are conducted regularly to ensure suppliers properly utilize
the system. NSK has also asked major suppliers to create their
own business continuity plans and verified their progress.
Corporate Strategy Division
Headquarters
Compliance Committee
CSR Division Headquarters
Compliance Enhancement Office
Disclosure Committee
Crisis Management Committee
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
Direction
Monitoring function
Internal Audit Department
Direction
Cooperation
Executive Organizations
President & Representative Executive Officer/CEO
Decision-making support function
Operating
Committee
Information sharing
Executive
Officers Meeting
Report
Direction
Report
Report
Report
Cooperation
Direction
Inquiry
Compensation
Committee
Nomination
Committee
Audit
Committee
NSK REPORT 2018
55
The Underlying Strength of Corporate Value
CSR/ESG Management
Corporate Governance
Outside Directors
(1) The Effective Use of Outside Directors
NSK has appointed five outside 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 outside to internal directors is at least one to
three.
Based on efforts to further enhance the effectiveness and
oversight functions of the Board of Directors, outside directors have
a wide range of duties that include tight-knit information sharing
with executive departments. Accordingly, NSK maintains a sufficient
number of outside directors to fulfill these duties.
Meetings consisting of only outside directors are held
periodically to facilitate the open exchange of opinions and sharing of
knowledge.
(2) Independence of Outside Directors
NSK has set specific standards for independence, which are applied
when appointing outside 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 outside directors of
NSK have fulfilled these standards for independence, the Company
has reported all five outside directors as independent directors to the
Tokyo Stock Exchange.
The Company’s outside directors, who possess a wide range of
experience and deep insight in business, management and specialty
fields, offer their advice while supervising management from an
independent standpoint, thereby enhancing the validity of decision
making by the Board of Directors.
Initiatives Geared toward Further Enhancements
(1) Training of Directors and Officers
The Company provides training as necessary to directors and
officers when they are appointed on business/financial
positions, corporate governance and relevant laws and
regulations including Japan’s Companies Act. In particular,
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.
(2) Evaluations of the Board of Directors’ Effectiveness
The Company verifies whether the functions of the Board of
Directors are being properly fulfilled and, to further
strengthen its effectiveness, evaluations of the Board of
Directors have been carried out every year since fiscal 2015
through questionnaires and interviews by outside experts in
order to maintain objectivity.
As a result, it has been confirmed that these evaluations
have invigorated the Board of Directors by improving its
operational processes/status mainly involving revising agenda
items discussed by the Board, lengthening discussion time
and providing prior explanations to the Board. The Company
will take steps to improve the effectiveness of the Board of
Directors to help further improve corporate value, including
enhancing the Board’s long-term-oriented and strategic
discussions.
56
NSK REPORT 2018
Enhancing and Invigorating Board of Director Discussions
Engaging in lively discussions, NSK’s Board of Directors is
required to hold meetings that are around three hours long
(meetings normally held 10 times a year).
NSK believes that having access to information in advance
is essential for invigorating Board of Director discussions.
Board meetings are held based on the Board of Directors
secretariat and the executive in charge of the Corporate
Planning Division providing appropriate information that
includes explaining agenda items and distributing documents in
advance to both outside and internal directors.
Internal Control System
NSK works to improve its Groupwide internal control system by clearly
stipulating fundamental principles aimed at effectively enabling global
Group management and internal control functions.
The Internal Audit Department monitors Groupwide internal control
system development and operational status by coordinating with the Audit
Committee from a position that is independent from operating divisions.
In fiscal 2016, NSK commissioned an external international auditing
agency, The Institute of International Auditors (IIA), to evaluate the quality of
NSK’s internal audits, which the IIA deemed as “generally conforms” to
standards set by the IIA. In fiscal 2017, the Internal Audit Department
undertook the development of an internal audit quality assessment
structure and published an internal audit quality report for that year. In
addition, the Internal Audit Department is conducting audits using data
analysis in an effort to improve audit effectiveness. NSK also has worked to
strengthen the personnel base at regional headquarters’ internal audit
offices, which oversee regional entities, in order to establish a global
internal auditing foundation and strengthen auditing structures.
In addition, the Internal Audit Department continues to undertake
initiatives to address the four key mid-term objectives: 1) enhance
compliance, 2) strengthen risk monitoring, 3) increase audit effectiveness
and 4) promote the improvement of operational efficiency.
▶Strengthening NSK’s Corporate Governance Structure
2000
(Year to March 31)
● Adopted an executive officer system and subsequently appointed
independent directors to the Company’s Board of Directors
● Established the Voluntary Compensation Committee
2003
● Established the Crisis Management Committee
2004 ● Established the Voluntary Audit Committee
2005
2006
2007
2011
2013
2016
2018
2019
● 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 Information Disclosure Team
(current Disclosure Committee)
● Became a company with committees pursuant to Japan’s
Companies Act
● Established the Internal Control Project Team (later merged into
the current Internal Audit Department)
● Submitted a notification to the Tokyo Stock Exchange to confirm
the independence of all four outside directors
● Established independence criteria for the Company’s outside
directors
● Established the Compliance Committee
● NSK became a Company with Three Committees (Nomination, Audit
and Compensation) system based on the revised Companies Act
● The three committee chairs were all outside directors
● NSK appoints five outside directors (four men, one woman)
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]
title of the executive officer. Moreover, an additional amount will be
The directors’ compensation package consists of basic
paid to executive officers with representation rights.
compensation and stock compensation.
(1) Basic compensation
Basic compensation is determined based on whether the director is
an outside director or an internal 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 outside or internal 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 Officers’ 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 the
3．Directors/Officers’ Compensation, etc.
(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 between April 1, 2017, and March 31, 2018, was as follows.
■ Compensation Total by Classification of Directors/Officers and Compensation Type and No. of Directors/Officers
Compensation,
Basic Compensation
Performance-Based Salary
Stock Compensation
Stock Options
Classification
etc., Total
(￥ 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)
Directors (internal)
Directors (outside)
Executive Officers
104
63
2,486
9
4
32
83
45
848
ー
ー
30
ー
ー
806
2
4
35
16
14
796
5
4
26
4
3
34
Notes:
1. Compensation (excluding stock compensation and retirement benefits) for directors (internal) includes compensation for directors who also serve as executive officers.
2. The amount of performance-based salary is the planned payment amount as of July 2, 2018, based on the results for the year ended March 31, 2018. The amount of
performance-based salary as of July 3, 2017, based on the results for the year ended March 31, 2017, was ¥594 million.
3. 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.
4. At the Compensation Committee meeting held on May 16, 2016, the decision was made to end the stock option programs. 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 21, 2015.
5. 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.
Basic Compensation
Performance-Based
Stock Compensation
Stock Options
Retirement Benefit
(￥ Millions)
Salary (￥ Millions)
(￥ Millions)
(￥ Millions)
(￥ Millions)
Toshihiro Uchiyama
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Hirotoshi Aramaki
Adrian Browne
Jürgen Ackermann
Steven Beckman
203
105
104
104
102
155
185
146
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Executive Officer
NSK Ltd.
CEO
CEO
NSK Europe Ltd.
NSK Americas, Inc.
7
43
5
28
4
28
4
28
4
27
89
60
60
―
64
―
34
―
34
―
34
―
33
59
54
78
―
84
―
34
―
34
―
34
―
34
5
6
5
0
4
0
1
0
1
―
1
―
1
1
―
―
―
―
―
―
―
―
―
―
―
―
―
63
2
NSK REPORT 2018
57
The Underlying Strength of Corporate Value
CSR/ESG Management
Corporate Governance
Outside Directors
(1) The Effective Use of Outside Directors
NSK has appointed five outside 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 outside to internal directors is at least one to
three.
Based on efforts to further enhance the effectiveness and
oversight functions of the Board of Directors, outside directors have
a wide range of duties that include tight-knit information sharing
with executive departments. Accordingly, NSK maintains a sufficient
number of outside directors to fulfill these duties.
Meetings consisting of only outside directors are held
periodically to facilitate the open exchange of opinions and sharing of
knowledge.
(2) Independence of Outside Directors
NSK has set specific standards for independence, which are applied
when appointing outside 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 outside directors of
NSK have fulfilled these standards for independence, the Company
has reported all five outside directors as independent directors to the
Tokyo Stock Exchange.
The Company’s outside directors, who possess a wide range of
experience and deep insight in business, management and specialty
fields, offer their advice while supervising management from an
independent standpoint, thereby enhancing the validity of decision
making by the Board of Directors.
Initiatives Geared toward Further Enhancements
(1) Training of Directors and Officers
The Company provides training as necessary to directors and
officers when they are appointed on business/financial
positions, corporate governance and relevant laws and
regulations including Japan’s Companies Act. In particular,
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.
(2) Evaluations of the Board of Directors’ Effectiveness
The Company verifies whether the functions of the Board of
Directors are being properly fulfilled and, to further
strengthen its effectiveness, evaluations of the Board of
Directors have been carried out every year since fiscal 2015
through questionnaires and interviews by outside experts in
order to maintain objectivity.
As a result, it has been confirmed that these evaluations
have invigorated the Board of Directors by improving its
operational processes/status mainly involving revising agenda
items discussed by the Board, lengthening discussion time
and providing prior explanations to the Board. The Company
will take steps to improve the effectiveness of the Board of
Directors to help further improve corporate value, including
enhancing the Board’s long-term-oriented and strategic
discussions.
56
NSK REPORT 2018
Enhancing and Invigorating Board of Director Discussions
Engaging in lively discussions, NSK’s Board of Directors is
required to hold meetings that are around three hours long
(meetings normally held 10 times a year).
NSK believes that having access to information in advance
is essential for invigorating Board of Director discussions.
Board meetings are held based on the Board of Directors
secretariat and the executive in charge of the Corporate
Planning Division providing appropriate information that
includes explaining agenda items and distributing documents in
advance to both outside and internal directors.
Internal Control System
NSK works to improve its Groupwide internal control system by clearly
stipulating fundamental principles aimed at effectively enabling global
Group management and internal control functions.
The Internal Audit Department monitors Groupwide internal control
system development and operational status by coordinating with the Audit
Committee from a position that is independent from operating divisions.
In fiscal 2016, NSK commissioned an external international auditing
agency, The Institute of International Auditors (IIA), to evaluate the quality of
NSK’s internal audits, which the IIA deemed as “generally conforms” to
standards set by the IIA. In fiscal 2017, the Internal Audit Department
undertook the development of an internal audit quality assessment
structure and published an internal audit quality report for that year. In
addition, the Internal Audit Department is conducting audits using data
analysis in an effort to improve audit effectiveness. NSK also has worked to
strengthen the personnel base at regional headquarters’ internal audit
offices, which oversee regional entities, in order to establish a global
internal auditing foundation and strengthen auditing structures.
In addition, the Internal Audit Department continues to undertake
initiatives to address the four key mid-term objectives: 1) enhance
compliance, 2) strengthen risk monitoring, 3) increase audit effectiveness
and 4) promote the improvement of operational efficiency.
▶Strengthening NSK’s Corporate Governance Structure
(Year to March 31)
2000
● Adopted an executive officer system and subsequently appointed
independent directors to the Company’s Board of Directors
● Established the Voluntary Compensation Committee
2003
● Established the Crisis Management Committee
2004 ● Established the Voluntary Audit Committee
2005
● 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 Information Disclosure Team
(current Disclosure Committee)
● Became a company with committees pursuant to Japan’s
Companies Act
● Established the Internal Control Project Team (later merged into
the current Internal Audit Department)
2011
● Submitted a notification to the Tokyo Stock Exchange to confirm
the independence of all four outside directors
● Established independence criteria for the Company’s outside
directors
● Established the Compliance Committee
● NSK became a Company with Three Committees (Nomination, Audit
and Compensation) system based on the revised Companies Act
● The three committee chairs were all outside directors
● NSK appoints five outside directors (four men, one woman)
2006
2007
2013
2016
2018
2019
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 outside director or an internal 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 outside or internal 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 Officers’ 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 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.
3．Directors/Officers’ Compensation, etc.
The amount of compensation for directors and executive officers between April 1, 2017, and March 31, 2018, was as follows.
■ Compensation Total by Classification of Directors/Officers and Compensation Type and No. of Directors/Officers
Classification
Directors (internal)
Directors (outside)
Executive Officers
Compensation,
etc., Total
(￥ Millions)
104
63
2,486
No. of Directors/
Officers
Basic Compensation
Amount
(￥ Millions)
83
9
4
32
45
848
Performance-Based Salary
No. of Directors/
Officers
Amount
(￥ Millions)
ー
ー
30
ー
ー
806
No. of Directors/
Officers
Stock Compensation
Amount
(￥ Millions)
16
2
4
35
14
796
Stock Options
No. of Directors/
Officers
5
4
26
Amount
(￥ Millions)
4
3
34
Notes:
1. Compensation (excluding stock compensation and retirement benefits) for directors (internal) includes compensation for directors who also serve as executive officers.
2. The amount of performance-based salary is the planned payment amount as of July 2, 2018, based on the results for the year ended March 31, 2018. The amount of
performance-based salary as of July 3, 2017, based on the results for the year ended March 31, 2017, was ¥594 million.
3. 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.
4. At the Compensation Committee meeting held on May 16, 2016, the decision was made to end the stock option programs. 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 21, 2015.
5. Figures listed above are rounded down to one million yen.
■ Directors/Officers Receiving a Total of ¥100 Million or More in Consolidated Compensation
Name
Consolidated
Compensation,
etc., Total
(￥ Millions)
Title
Company
Amount for Each Item of Consolidated Compensation, etc.
Basic Compensation
(￥ Millions)
Performance-Based
Salary (￥ Millions)
Stock Compensation
(￥ Millions)
Stock Options
(￥ Millions)
Retirement Benefit
(￥ Millions)
Toshihiro Uchiyama
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Hirotoshi Aramaki
Adrian Browne
Jürgen Ackermann
Steven Beckman
203
105
104
104
102
155
185
146
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Director
NSK Ltd.
Executive Officer
NSK Ltd.
Executive Officer
NSK Ltd.
CEO
CEO
NSK Europe Ltd.
NSK Americas, Inc.
7
43
5
28
4
28
4
28
4
27
89
60
60
―
64
―
34
―
34
―
34
―
33
59
54
78
―
84
―
34
―
34
―
34
―
34
5
6
5
0
4
0
1
0
1
―
1
―
1
1
―
―
―
―
―
―
―
―
―
―
―
―
―
63
2
NSK REPORT 2018
57
The Underlying Strength of Corporate Value
CSR/ESG Management
Corporate Governance
Actions for Japan’s Corporate Governance Code
NSK shall adhere to each principle of the Corporate Governance Code.
Based on Japan's revised Corporate Governance Code announced on June 1, 2018, NSK will update and
publish the “NSK Corporate Governance Report” through the end of December 2018.
For details on the NSK Corporate Governance Report (in Japanese only), please refer to the following
NSK website.
http://www.nsk.com/jp/company/governance/index.html
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.
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
Material Issue: Compliance
Basic Philosophy
NSK has formulated the NSK Code of Corporate Ethics and clarified its
“NSK Corporate Ethics Policies” and “Code of Conduct Concerning
Compliance” with the aim of outlining universal principles for conducting
all of the Company's activities in accordance with the NSK Corporate
Philosophy. NSK aims to continue developing as 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
Key initiatives to enhance compliance undertaken to date are as follows.
(1) Strengthening NSK’s Compliance Systems
①Compliance Committee
NSK established this committee in March 2012 and continues to hold it
four times a year.
②Global Legal and Compliance Meetings
NSK has held these meetings with the members responsible for compliance from
regional headquarters since August 2012. In Fiscal 2017, meetings were held in the
United States in June and in Japan in October.
③ Compliance Conferences
NSK has held these conferences with the compliance representatives
from each division and Group Company in Japan twice a year since
December 2012.
(2) Establishing Relevant Regulations & Systems
・Operates a system for examining whether to participate in meetings
attended by competitors
・Distributes the “NSK Compliance Guidebook” (revised in 2018)
・Formulates and revises the “Rules for Compliance with the
Competition Law,” “Operational Rules of Hotline,” “Anti-Bribery
Standards,” “Personal Information Protection Regulations,” and
“Internal Regulation for Preventing Insider Trading”
(3) Strengthening Education and Awareness Raising Activities
・Regularly distributes the president's message calling for stringent
compliance with laws and regulations
・Implements e-learning for officers and employees (twice a year)
・Conducts compliance training at sales divisions, plants, engineering
sections and Group companies
・Designated July 26 as “NSK Corporate Philosophy Day”
・Conducts a compliance slogan contest during compliance month
(July 26 -August 31)
・Internally shares compliance violation information
(4) Strengthening Monitoring
・Conducts internal audits of sales divisions relating to Antimonopoly
Act compliance
・Evaluates internal control related to compliance for the NSK Group
・Conducts a compliance awareness survey for the NSK Group
・Operates a whisleblowing system (hotline) in each region
Examples of Key Initiatives in Fiscal 2017
(1) Preventing Violations of the Competition Law
To raise awareness of adherence to the Competition Law,
training on the Competition Law and compliance was provided
to 1,463 people through 106 sessions mainly at sales divisions
both in and outside Japan. The required training time was
around 90 minutes per person (including compliance training).
(2) Second Year of the “NSK Corporate Philosophy Day”
In order to revisit the lessons learned from the past incident,
reconfirm the resolve of all employees that no anti-competitive
incident will ever occur again, and to ensure that all employees
review the Corporate Philosophy and make it their own code of
conduct, the date of July 26 has been designated “NSK
Corporate Philosophy Day.” On the NSK Corporate Philosophy
Day in 2017, the president gave a speech and an outside
instructor lectured on reaffirming the corporate philosophy and
incorporating it into one's actions. On a subsequent day, the
attendees discussed workplace issues related to compliance at
each workplace.
(3) Compliance Awareness Surveys
NSK has commissioned an outside survey agency to
conduct a compliance awareness survey since 2014 to verify
the compliance awareness of its officers and employees.
14,879 respondents including employees from the
Company's head office and Group companies in Japan, and
14,014 respondents outside Japan participated in the fourth
survey in fiscal 2017. The results of the survey have been
reported back to each workplace and effectively used to
raise and spread compliance awareness.
▶NSK Group Compliance System (As of August 2018)
Audit Committee
Direction Coordination
Audit
Internal
Audit Department
President and Chief Executive Officer
Compliance Committee
Committee Chair: President and CEO
Committee Members: 13 executive officers
CSR Division Headquarters
Legal Department
Compliance Enhancement Office
Cooperation
International Trade
Management
Department
General Affairs
Public Relations
Department
Department
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
Outside Japan
Global Legal and Compliance Meeting
Regional Headquarters
The
Americas
Europe China
ASEAN India
South
Korea
All NSK Group Employees
58
NSK REPORT 2018
NSK REPORT 2018
59
The Underlying Strength of Corporate Value
CSR/ESG Management
Corporate Governance
Actions for Japan’s Corporate Governance Code
NSK shall adhere to each principle of the Corporate Governance Code.
Based on Japan's revised Corporate Governance Code announced on June 1, 2018, NSK will update and
publish the “NSK Corporate Governance Report” through the end of December 2018.
For details on the NSK Corporate Governance Report (in Japanese only), please refer to the following
NSK website.
http://www.nsk.com/jp/company/governance/index.html
Takeover Defense
and June 2017.
shareholders.
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,
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
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
Material Issue: Compliance
Basic Philosophy
NSK has formulated the NSK Code of Corporate Ethics and clarified its
“NSK Corporate Ethics Policies” and “Code of Conduct Concerning
Compliance” with the aim of outlining universal principles for conducting
all of the Company's activities in accordance with the NSK Corporate
Philosophy. NSK aims to continue developing as 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
Key initiatives to enhance compliance undertaken to date are as follows.
(1) Strengthening NSK’s Compliance Systems
①Compliance Committee
NSK established this committee in March 2012 and continues to hold it
four times a year.
②Global Legal and Compliance Meetings
NSK has held these meetings with the members responsible for compliance from
regional headquarters since August 2012. In Fiscal 2017, meetings were held in the
United States in June and in Japan in October.
③ Compliance Conferences
NSK has held these conferences with the compliance representatives
from each division and Group Company in Japan twice a year since
December 2012.
(2) Establishing Relevant Regulations & Systems
・Operates a system for examining whether to participate in meetings
attended by competitors
・Distributes the “NSK Compliance Guidebook” (revised in 2018)
・Formulates and revises the “Rules for Compliance with the
Competition Law,” “Operational Rules of Hotline,” “Anti-Bribery
Standards,” “Personal Information Protection Regulations,” and
“Internal Regulation for Preventing Insider Trading”
(3) Strengthening Education and Awareness Raising Activities
・Regularly distributes the president's message calling for stringent
compliance with laws and regulations
・Implements e-learning for officers and employees (twice a year)
・Conducts compliance training at sales divisions, plants, engineering
sections and Group companies
・Designated July 26 as “NSK Corporate Philosophy Day”
・Conducts a compliance slogan contest during compliance month
(July 26 -August 31)
・Internally shares compliance violation information
(4) Strengthening Monitoring
・Conducts internal audits of sales divisions relating to Antimonopoly
Act compliance
・Evaluates internal control related to compliance for the NSK Group
・Conducts a compliance awareness survey for the NSK Group
・Operates a whisleblowing system (hotline) in each region
Examples of Key Initiatives in Fiscal 2017
(1) Preventing Violations of the Competition Law
To raise awareness of adherence to the Competition Law,
training on the Competition Law and compliance was provided
to 1,463 people through 106 sessions mainly at sales divisions
both in and outside Japan. The required training time was
around 90 minutes per person (including compliance training).
(2) Second Year of the “NSK Corporate Philosophy Day”
In order to revisit the lessons learned from the past incident,
reconfirm the resolve of all employees that no anti-competitive
incident will ever occur again, and to ensure that all employees
review the Corporate Philosophy and make it their own code of
conduct, the date of July 26 has been designated “NSK
Corporate Philosophy Day.” On the NSK Corporate Philosophy
Day in 2017, the president gave a speech and an outside
instructor lectured on reaffirming the corporate philosophy and
incorporating it into one's actions. On a subsequent day, the
attendees discussed workplace issues related to compliance at
each workplace.
(3) Compliance Awareness Surveys
NSK has commissioned an outside survey agency to
conduct a compliance awareness survey since 2014 to verify
the compliance awareness of its officers and employees.
14,879 respondents including employees from the
Company's head office and Group companies in Japan, and
14,014 respondents outside Japan participated in the fourth
survey in fiscal 2017. The results of the survey have been
reported back to each workplace and effectively used to
raise and spread compliance awareness.
▶NSK Group Compliance System (As of August 2018)
Audit Committee
Direction Coordination
Audit
Internal
Audit Department
President and Chief Executive Officer
Compliance Committee
Committee Chair: President and CEO
Committee Members: 13 executive officers
CSR Division Headquarters
Legal Department
Compliance Enhancement Office
Cooperation
International Trade
Management
Department
General Affairs
Department
Public Relations
Department
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
Outside Japan
Global Legal and Compliance Meeting
Regional Headquarters
The
Americas
Europe China
ASEAN India
South
Korea
All NSK Group Employees
58
NSK REPORT 2018
NSK REPORT 2018
59
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 (in 2018, we held the meeting four business days
prior to the day that was crowded with other companies’ meetings). We
also work to provide an accommodating environment, including by
promptly disclosing and sending convocation notices and reports (we
post convocation notices to our website 28 days prior to the date of the
Ordinary General Meeting of Shareholders).
The shareholding ratio of foreign investors is approximately 25%.
In light of this, in addition to the posting of the convocation notice in
English on our website, we have since 2008 participated on a platform
that enables the electronic exercise of voting rights.
3
Dialogue with Investors
▶The 157th Ordinary General Meeting of Shareholders (June 22, 2018)
Number of shareholders
present:
Ratio of shareholder
voting rights exercised:
161
84.1％
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.
NSK is promoting the proactive disclosure of information. In addition
to holding briefings for individual investors several times a year, we
have set up a website specifically for individual investors in order to
give them a better understanding of the Company. Through the
briefings and website, NSK is also available to answer questions.
Total number of individual investors participating
in fiscal 2017
513 in 9 briefings
Total number of dialogue
opportunities in fiscal 2017: 555 companies
Website for individual investors (Japanese only)
http://www.nsk.com/jp/investors/individual.html
At NSK, having determined our “Disclosure Policy,” we strive to conduct the disclosure of information in a fair manner that does
not give rise to discrepancies in information among market participants.
For further information on our Disclosure Policy, please access the link below to our website.
http://www.nsk.com/investors/management/disclosurepolicy.html
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.
The main information reported at the Board of Directors meetings is the 1) Summary of the Ordinary General Meeting of Shareholders
(analysis of voting rights executed, effectiveness of dialogue with institutional investors), and 2) reports on visits to overseas investors (investors’
assessments of medium- and long-term policies, as well as their opinions and interests, and other items).
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.
The Company’s view on overseas plant conditions
2
and development
NSK currently has 64 production plants around the world: 20 in Japan, 10 in
the Americas, nine in Europe, 12 in China and 13 in Other Asia, giving a total
of 44 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
Medium term growth strategies in the
Automotive Business
Amid rising demand for automatic transmissions (step ATs) in emerging
markets and trends toward multistep AT, we have positioned the AT-related
business as one of the drivers for growth in the Automotive Business. We will
seek to secure global supply capabilities and address our customers’
expansion of production.
With electric vehicles (EVs), there is some variation according to either
drive unit type or deceleration mechanism type, and although it is difficult to
calculate the actual number of bearings to be used, demand for bearings is in
general expected to decline. Meanwhile, we believe that demand will arise as a
result of the electrification of component units that have conventionally derived
their power from the engine as well as the emphasis on efficiency-oriented
bearings to enhance the conservation of energy. This is in turn expected to fuel
new business opportunities where advanced technological capabilities are
required. 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 exhibiting a rapid rise in the rate of
installation; components for wheel hub motors that drive the motor part of the
wheel; and EV drive units, which show promise as a deceleration mechanism
necessary in the use of compact high-speed motors as a power source.
(Please see PP. 16-19 for Feature 1.)
we are moving into an adjustment phase. We will work to realize a return to
growth by expanding new projects for column-type EPS and capturing new
business for rack-type EPS that leverages our ball screw technology. In
addition, over the medium to long term, we will be striving to develop
next-generation technologies including steering systems based on
steer-by-wire (force feedback actuator, road wheel actuator) and Parallel
Link type Active Suspension. (Please see PP. 18-19 for Feature 1.)
Strategies and Priorities for the Industrial
6
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 improving
profitability by enhancing production capacity at the Shenyang plant in China
and improving productivity by introducing new manufacturing methods and
newly constructed building at the Kirihara, Fujisawa plant in Japan.
In addition, the Company is focused on ensuring sustainable growth by
expanding its presence in focus sectors. Specifically, this refers to
infrastructure-related fields such as wind power generation and railway,
where demand appears likely to expand over the medium to long term;
expansion in such capital goods areas as machine tools in which NSK shows
particular strength; the robotics and medical fields, which are expected to
demonstrate further growth in the future; and aftermarket sales, where we
are taking measures to strengthen our efforts overseas. Moreover, there is
the possibility that advances in IoT, AI and other technologies will transform
the structures, systems and ways of using industrial machinery. We will take
a proactive stance and seize on developments and needs in the market, while
searching for business opportunities in new fields.
7
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.
8
9
The status of capital expenditure and R&D expenses
We have revised upward expectations for both the amount of capital
expenditures and R&D expenses, compared to our outlook at the start of our
Fifth Mid-Term Management Plan. Investments to improve productivity
(equipment upgrades, labor-saving measures) so as to raise competitiveness
and R&D investments into new products and new technologies have increased.
(Please see P. 28 for Progress of the Mid-Term Management Plan.)
Stance on shareholder returns
In our Fifth Mid-Term Management Plan, we stipulated our policy with regard
to the return of profits to shareholders. While placing an emphasis on stable
dividends, the Company is targeting a payout ratio of 30%. In addition, as a
flexible way to return profits to shareholders, we are acquiring treasury
shares. (Please see PP. 38–39 for Financial Strategy / Policy on Shareholder
5
NSK’s focus on expanding the steering business
Electric power steering (EPS) has been widely installed due to the ease of
assembly and fuel-saving attributes. Today, computerized steering control is
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's steering business has continued
to grow in line with its strength in column-type EPS. However, given the
Returns.)
10
impact of a shift to lower-assist EPS timed to the change in delivered models,
Value Creation.)
Stance on CSR/ESG, initiatives with regard to SDGs
We are advancing CSR/ESG management based on our corporate philosophy.
We have set initiative goals specifically for the CSR/ESG field, and by
advancing these goals we strive to realize a sustainable society and raise
corporate value. (Please see PP. 46–47 for NSK's View of CSR in Corporate
60
NSK REPORT 2018
NSK REPORT 2018
61
The Underlying Strength of Corporate Value
CSR/ESG Management
1
2
Basic Philosophy and Structure
In addition to disclosing management information in a fair and rapid
NSK positions IR activities as an important subject for
manner, NSK is actively engaged in dialogue with shareholders and
management and organizes its IR office as a dedicated division under
investors. In line with our aim to achieve sustainable mid- to long-term
the direct control of the CEO and supervised by an executive officer
growth and the stable return of profits, we will continue to be a company
responsible for IR. In cooperation with relevant divisions, the IR office
that meets the expectations of our stakeholders, including investors and
discloses information on business, financial and non-financial (including
shareholders.
ESG) matters in an easily understood, fair and appropriate manner.
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 (in 2018, we held the meeting four business days
prior to the day that was crowded with other companies’ meetings). We
also work to provide an accommodating environment, including by
promptly disclosing and sending convocation notices and reports (we
post convocation notices to our website 28 days prior to the date of the
Ordinary General Meeting of Shareholders).
The shareholding ratio of foreign investors is approximately 25%.
In light of this, in addition to the posting of the convocation notice in
English on our website, we have since 2008 participated on a platform
that enables the electronic exercise of voting rights.
3
Dialogue with 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.
▶The 157th Ordinary General Meeting of Shareholders (June 22, 2018)
Number of shareholders
present:
Ratio of shareholder
voting rights exercised:
161
84.1％
NSK is promoting the proactive disclosure of information. In addition
to holding briefings for individual investors several times a year, we
have set up a website specifically for individual investors in order to
give them a better understanding of the Company. Through the
briefings and website, NSK is also available to answer questions.
Total number of individual investors participating
in fiscal 2017
513 in 9 briefings
Dialogue with institutional investors
Dialogue with individual investors
Total number of dialogue
opportunities in fiscal 2017: 555 companies
Website for individual investors (Japanese only)
http://www.nsk.com/jp/investors/individual.html
At NSK, having determined our “Disclosure Policy,” we strive to conduct the disclosure of information in a fair manner that does
not give rise to discrepancies in information among market participants.
For further information on our Disclosure Policy, please access the link below to our website.
http://www.nsk.com/investors/management/disclosurepolicy.html
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.
The main information reported at the Board of Directors meetings is the 1) Summary of the Ordinary General Meeting of Shareholders
(analysis of voting rights executed, effectiveness of dialogue with institutional investors), and 2) reports on visits to overseas investors (investors’
assessments of medium- and long-term policies, as well as their opinions and interests, and other items).
Dialogue with Shareholders and Investors
Key Questions and Answers at Recent Meetings
The state of competition and the Company’s
position in the industry
1
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.
The Company’s view on overseas plant conditions
and development
2
NSK currently has 64 production plants around the world: 20 in Japan, 10 in
the Americas, nine in Europe, 12 in China and 13 in Other Asia, giving a total
of 44 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.
The Company’s view on M&A
3
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.
Medium term growth strategies in the
Automotive Business
4
Amid rising demand for automatic transmissions (step ATs) in emerging
markets and trends toward multistep AT, we have positioned the AT-related
business as one of the drivers for growth in the Automotive Business. We will
seek to secure global supply capabilities and address our customers’
expansion of production.
With electric vehicles (EVs), there is some variation according to either
drive unit type or deceleration mechanism type, and although it is difficult to
calculate the actual number of bearings to be used, demand for bearings is in
general expected to decline. Meanwhile, we believe that demand will arise as a
result of the electrification of component units that have conventionally derived
their power from the engine as well as the emphasis on efficiency-oriented
bearings to enhance the conservation of energy. This is in turn expected to fuel
new business opportunities where advanced technological capabilities are
required. 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 exhibiting a rapid rise in the rate of
installation; components for wheel hub motors that drive the motor part of the
wheel; and EV drive units, which show promise as a deceleration mechanism
necessary in the use of compact high-speed motors as a power source.
(Please see PP. 16-19 for Feature 1.)
NSK’s focus on expanding the steering business
5
Electric power steering (EPS) has been widely installed due to the ease of
assembly and fuel-saving attributes. Today, computerized steering control is
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's steering business has continued
to grow in line with its strength in column-type EPS. However, given the
impact of a shift to lower-assist EPS timed to the change in delivered models,
we are moving into an adjustment phase. We will work to realize a return to
growth by expanding new projects for column-type EPS and capturing new
business for rack-type EPS that leverages our ball screw technology. In
addition, over the medium to long term, we will be striving to develop
next-generation technologies including steering systems based on
steer-by-wire (force feedback actuator, road wheel actuator) and Parallel
Link type Active Suspension. (Please see PP. 18-19 for Feature 1.)
Strategies and Priorities for the Industrial
Machinery Business
6
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 improving
profitability by enhancing production capacity at the Shenyang plant in China
and improving productivity by introducing new manufacturing methods and
newly constructed building at the Kirihara, Fujisawa plant in Japan.
In addition, the Company is focused on ensuring sustainable growth by
expanding its presence in focus sectors. Specifically, this refers to
infrastructure-related fields such as wind power generation and railway,
where demand appears likely to expand over the medium to long term;
expansion in such capital goods areas as machine tools in which NSK shows
particular strength; the robotics and medical fields, which are expected to
demonstrate further growth in the future; and aftermarket sales, where we
are taking measures to strengthen our efforts overseas. Moreover, there is
the possibility that advances in IoT, AI and other technologies will transform
the structures, systems and ways of using industrial machinery. We will take
a proactive stance and seize on developments and needs in the market, while
searching for business opportunities in new fields.
7
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.
The status of capital expenditure and R&D expenses
8
We have revised upward expectations for both the amount of capital
expenditures and R&D expenses, compared to our outlook at the start of our
Fifth Mid-Term Management Plan. Investments to improve productivity
(equipment upgrades, labor-saving measures) so as to raise competitiveness
and R&D investments into new products and new technologies have increased.
(Please see P. 28 for Progress of the Mid-Term Management Plan.)
Stance on shareholder returns
9
In our Fifth Mid-Term Management Plan, we stipulated our policy with regard
to the return of profits to shareholders. While placing an emphasis on stable
dividends, the Company is targeting a payout ratio of 30%. In addition, as a
flexible way to return profits to shareholders, we are acquiring treasury
shares. (Please see PP. 38–39 for Financial Strategy / Policy on Shareholder
Returns.)
Stance on CSR/ESG, initiatives with regard to SDGs
10
We are advancing CSR/ESG management based on our corporate philosophy.
We have set initiative goals specifically for the CSR/ESG field, and by
advancing these goals we strive to realize a sustainable society and raise
corporate value. (Please see PP. 46–47 for NSK's View of CSR in Corporate
Value Creation.)
60
NSK REPORT 2018
NSK REPORT 2018
61
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: 83,600]
Director, Representative Executive Vice President,
Chief Financial Officer,
Responsible for Administrative Divisions,
Head of Corporate Strategy Division Headquarters
[Number of Shares Owned: 44,800]
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: 53,300]
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: 76,100]
5 Nobuo Goto
6
Akitoshi Ichii
7
Toshihiko Enomoto
A
8 Kazuaki Kama
N
Director, Executive Vice President,
Responsible for Technology Divisions,
Responsible for Quality Assurance Division
Head of Technology Development Division Headquarters
[Number of Shares Owned: 19,400]
Director, Senior Vice President,
Head of Corporate Planning Division Headquarters,
Responsible for Asia
[Number of Shares Owned: 55,161]
Director
[Number of Shares Owned: 15,316]
Outside Director,
Independent Director,
Executive Corporate Advisor of IHI Corporation,
Outside Director of Kyokuto Boeki Kaisha, Ltd.,
Outside Director of Sumitomo Life Insurance Company
[Number of Shares Owned: 2,800]
9 Yasunobu Furukawa
A
C
10 Teruhiko Ikeda
C
A
11 Hajime Bada
N
12 Akemi Mochizuki
A
Outside Director,
Independent Director,
Certified Public Accountant,
Outside Director of Keisei Electric Railway Co., Ltd.
[Number of Shares Owned: 2,700]
Outside Director,
Independent Director,
Advisor of Mizuho Trust & Banking Co., Ltd.
[Number of Shares Owned: －]
Outside Director,
Independent Director,
Honorary Adviser of JFE Holdings, Inc.,
Outside Director of Mitsui Chemicals, Inc.,
External Auditor of Asagami Corporation
[Number of Shares Owned: －]
Outside Director,
Independent Director,
Certified Public Accountant
[Number of Shares Owned: －]
62
NSK REPORT 2018
Executive Officers and Group Officers
President and
Chief Executive Officer
Toshihiro Uchiyama
Representative
Executive Vice
Presidents
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Executive Vice
Presidents
Masatada Fumoto
Nobuo Goto
Senior Vice
Presidents
Katsumi Kobayashi
Masami Shinomoto
Yasutsugu Hada
Koji Inoue
Hiroshi Suzuki
Hiroya Miyazaki
Adrian Browne
Hiromasa Orito
Kazunori Iritani
Akitoshi Ichii
Kenichi Yamana
Tomoyuki Yoshikiyo
Vice Presidents
Masaru Takayama
Seiji Ijuin
Nobuaki Mitamura
Takashi Yamanouchi
Kazuya Fukuda
Steven Beckman
Susumu Ishikawa
Tatsuya Atarashi
Guoping Yu
Hideki Ochiai
Kunihiko Akashi
Hiroya Achiha
Keita Suzuki
Hayato Omi
Tamami Murata
Hiroyuki Tsugimoto
Group Officers
Yoshinori Sugimoto
Seong-Il Jo
Minoru Arai
NSK REPORT 2018
63
： 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 157th 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/64710/140120180525447459.pdf
[Independent Directors/Auditors Notifications] (Japanese
http://www2.tse.or.jp/disc/64710/140120180528448960.pdf
2. Number of the Company’s shares owned as of March 31,
only)
2018
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,
Director, Representative Executive Vice President,
President and Chief Executive Officer
Chief Financial Officer,
Head of Automotive Business Division Headquarters,
Head of Industrial Machinery Business Division Headquarters,
[Number of Shares Owned: 83,600]
Responsible for Administrative Divisions,
Head of Automotive Powertrain Division
Head of Japan Sales and Marketing Division
Head of Corporate Strategy Division Headquarters
Headquarters - Automotive Business Division
Headquarters - Industrial Machinery Business
[Number of Shares Owned: 44,800]
Headquarters
Division Headquarters
[Number of Shares Owned: 53,300]
[Number of Shares Owned: 76,100]
5 Nobuo Goto
6
Akitoshi Ichii
7
Toshihiko Enomoto
A
8 Kazuaki Kama
N
Director, Executive Vice President,
Responsible for Technology Divisions,
Director, Senior Vice President,
Director
Head of Corporate Planning Division Headquarters,
[Number of Shares Owned: 15,316]
Outside Director,
Independent Director,
Responsible for Quality Assurance Division
Responsible for Asia
Head of Technology Development Division Headquarters
[Number of Shares Owned: 55,161]
[Number of Shares Owned: 19,400]
Executive Corporate Advisor of IHI Corporation,
Outside Director of Kyokuto Boeki Kaisha, Ltd.,
Outside Director of Sumitomo Life Insurance Company
[Number of Shares Owned: 2,800]
9 Yasunobu Furukawa
A
C
10 Teruhiko Ikeda
C
A
11 Hajime Bada
N
12 Akemi Mochizuki
A
Outside Director of Keisei Electric Railway Co., Ltd.
[Number of Shares Owned: －]
Outside Director of Mitsui Chemicals, Inc.,
[Number of Shares Owned: －]
Outside Director,
Independent Director,
Outside Director,
Independent Director,
Outside Director,
Independent Director,
Advisor of Mizuho Trust & Banking Co., Ltd.
Honorary Adviser of JFE Holdings, Inc.,
Certified Public Accountant
External Auditor of Asagami Corporation
[Number of Shares Owned: －]
Outside Director,
Independent Director,
Certified Public Accountant,
[Number of Shares Owned: 2,700]
62
NSK REPORT 2018
Executive Officers and Group Officers
President and
Chief Executive Officer
Toshihiro Uchiyama
Representative
Executive Vice
Presidents
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Executive Vice
Presidents
Masatada Fumoto
Nobuo Goto
： 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 157th 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/64710/140120180525447459.pdf
[Independent Directors/Auditors Notifications] (Japanese
only)
http://www2.tse.or.jp/disc/64710/140120180528448960.pdf
2. Number of the Company’s shares owned as of March 31,
2018
Senior Vice
Presidents
Yasutsugu Hada
Koji Inoue
Hiroshi Suzuki
Hiroya Miyazaki
Adrian Browne
Katsumi Kobayashi
Masami Shinomoto
Hiromasa Orito
Kazunori Iritani
Akitoshi Ichii
Kenichi Yamana
Tomoyuki Yoshikiyo
Vice Presidents
Group Officers
Masaru Takayama
Seiji Ijuin
Nobuaki Mitamura
Takashi Yamanouchi
Kazuya Fukuda
Steven Beckman
Susumu Ishikawa
Tatsuya Atarashi
Guoping Yu
Hideki Ochiai
Kunihiko Akashi
Hiroya Achiha
Keita Suzuki
Hayato Omi
Tamami Murata
Hiroyuki Tsugimoto
Seong-Il Jo
Yoshinori Sugimoto
Minoru Arai
NSK REPORT 2018
63
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)
2017
2018
139,573
200,954
131,810
12,284
3,024
18,637
131,283
217,200
143,052
1,953
1,006
16,848
Total current assets
506,284
511,346
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
64
NSK REPORT 2018
329,183
17,174
23,186
88,904
21,052
54,969
3,198
351,875
18,191
27,168
96,543
18,931
64,171
4,082
537,670
580,964
1,043,955
1,092,310
150,212
111,240
60
4,540
52,548
141,797
109,168
66
6,123
50,804
318,603
307,960
157,240
15,327
37,089
24,771
5,911
143,009
12,116
42,913
18,954
6,341
240,340
223,335
558,943
531,296
67,176
79,676
308,395
(17,937)
24,039
461,350
23,661
67,176
80,264
362,859
(17,815)
44,689
537,175
23,839
485,011
561,014
1,043,955
1,092,310
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 before income taxes
Income tax expense
Net income
Net income attributable to:
Owners of the parent
Non-controlling interests
2017
949,170
738,434
(Millions of Yen)
2018
1,020,338
788,052
210,736
232,286
132,021
5,086
18,458
138,459
6,448
2,398
65,341
97,875
2,576
4,301
63,617
14,619
48,997
45,560
3,437
86.08
86.03
2,476
3,103
97,248
24,087
73,160
69,312
3,848
131.16
130.96
(Earnings per share attributable to owners of the parent)
Basic earnings per share (yen)
Diluted earnings per share (yen)
Consolidated Statements of Comprehensive Income (IFRS)
2017
2018
Before tax effect
Tax effect
Amount (net)
Before tax effect
Tax effect
Amount (net)
(Millions of Yen)
48,997
73,160
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)
(2,445)
(1,162)
(3,608)
13,877
(2,815)
11,061
9,923
(1,216)
8,707
10,852
(2,572)
8,279
213
(81)
131
212
(57)
155
Total items that will not be reclassified to profit or loss
7,691
(2,460)
5,231
24,941
(5,445)
19,496
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
(8,419)
(138)
(8,558)
－
－
－
(8,419)
3,917
(138)
93
(8,558)
4,010
－
－
－
3,917
93
4,010
Total other comprehensive income
(866)
(2,460)
(3,327)
28,952
(5,445)
23,506
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Owners of the parent
Non-controlling interests
45,670
42,430
3,240
96,667
92,551
4,116
NSK REPORT 2018
65
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
64
NSK REPORT 2018
(Millions of Yen)
2017
2018
139,573
200,954
131,810
12,284
3,024
18,637
131,283
217,200
143,052
1,953
1,006
16,848
506,284
511,346
329,183
351,875
17,174
23,186
88,904
21,052
54,969
3,198
18,191
27,168
96,543
18,931
64,171
4,082
537,670
580,964
1,043,955
1,092,310
150,212
111,240
60
4,540
52,548
141,797
109,168
66
6,123
50,804
318,603
307,960
157,240
143,009
15,327
37,089
24,771
5,911
12,116
42,913
18,954
6,341
240,340
223,335
558,943
531,296
67,176
79,676
308,395
(17,937)
24,039
461,350
23,661
67,176
80,264
362,859
(17,815)
44,689
537,175
23,839
485,011
561,014
1,043,955
1,092,310
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)
2017
949,170
738,434
(Millions of Yen)
2018
1,020,338
788,052
210,736
232,286
132,021
5,086
18,458
138,459
6,448
2,398
65,341
97,875
2,576
4,301
63,617
14,619
48,997
45,560
3,437
86.08
86.03
2,476
3,103
97,248
24,087
73,160
69,312
3,848
131.16
130.96
Consolidated Statements of Comprehensive Income (IFRS)
Year ended March 31,
Net income
Other comprehensive income
2017
Tax effect
Before tax effect
Amount (net)
Before tax effect
48,997
(Millions of Yen)
2018
Tax effect
Amount (net)
73,160
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
(2,445)
(1,162)
(3,608)
13,877
(2,815)
11,061
9,923
(1,216)
8,707
10,852
(2,572)
8,279
213
(81)
131
212
(57)
155
Total items that will not be reclassified to profit or loss
7,691
(2,460)
5,231
24,941
(5,445)
19,496
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
(8,419)
(138)
(8,558)
－
－
－
(8,419)
3,917
(138)
93
(8,558)
4,010
－
－
－
3,917
93
4,010
Total other comprehensive income
(866)
(2,460)
(3,327)
28,952
(5,445)
23,506
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Owners of the parent
Non-controlling interests
45,670
42,430
3,240
96,667
92,551
4,116
NSK REPORT 2018
65
Data Section
Consolidated Statements of Changes in Equity (IFRS)
Consolidated Statements of Cash Flows (IFRS)
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)
35,292
－
8,705
8,705
－
－
－
－
－
(6,136)
(6,136)
37,862
1,204
－
(3,495)
(3,495)
－
－
－
－
－
－
－
(2,290)
33,306
－
(3,130)
454,661
45,560
(3,130)
(3,130)
42,430
－
－
－
－
－
(6,136)
(6,136)
24,039
(15,008)
1,048
383
(21,905)
(339)
80
(35,741)
461,350
24,210
3,437
(196)
3,240
－
－
－
(2,482)
(1,305)
－
(3,788)
23,661
478,871
48,997
(3,327)
45,670
(15,008)
1,048
383
(24,388)
(1,645)
80
(39,530)
485,011
(Millions of Yen)
Purchases of other financial assets
Year ended March 31, 2018
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
79,676
308,395
(17,937)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
119
591
－
(122)
－
588
69,312
－
69,312
－
－
－
(17,452)
－
2,604
(14,848)
－
－
－
(11)
134
－
－
－
－
122
67,176
80,264
362,859
(17,815)
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.
(11,531)
－
3,757
3,757
－
－
－
－
－
－
－
Closing balance
(7,774)
66
NSK REPORT 2018
37,862
－
8,311
8,311
－
－
－
－
－
(2,589)
(2,589)
43,584
(2,290)
－
11,170
24,039
－
23,239
461,350
69,312
23,239
23,661
3,848
267
485,011
73,160
23,506
11,170
23,239
92,551
4,116
96,667
－
－
－
－
－
－
－
8,880
－
－
－
－
－
(2,589)
(2,589)
44,689
(11)
253
591
(17,452)
(122)
15
(16,726)
537,175
－
－
－
(3,231)
(706)
－
(3,938)
23,839
(11)
253
591
(20,684)
(828)
15
(20,664)
561,014
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 expenses 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
Proceeds from sale and redemption 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
Acquisition of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
(Millions of Yen)
2017
2018
63,617
43,354
(20,133)
(2,414)
3,701
(5,086)
(22,007)
(3,756)
14,439
13,446
97,248
46,785
(985)
(2,329)
2,978
(6,448)
(12,464)
(10,382)
(11,116)
(2,957)
85,161
100,328
6,440
(3,746)
(19,919)
5,174
(2,921)
(18,835)
67,936
83,746
(53,297)
2,932
(11,166)
10,785
(3,498)
(61,397)
386
(162)
16,941
(8,769)
(54,243)
(53,001)
6,914
(17,963)
20,000
(20,000)
(15,001)
(21,882)
(2,482)
2,003
12,000
(48,687)
20,000
－
(4)
(17,438)
(3,233)
(2,440)
Net cash used in financial activities
(48,413)
(39,804)
Effect of exchange rate changes on cash and cash equivalents
(1,221)
770
Net increase (decrease) in cash and cash equivalents
(35,942)
(8,289)
Cash and cash equivalents at beginning of the period
175,515
139,573
Cash and cash equivalents at end of the period
139,573
131,283
NSK REPORT 2018
67
Data Section
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
(3,949)
(Millions of Yen)
－
－
－
－
27
383
－
(339)
－
72
454,661
45,560
(3,130)
(15,008)
1,048
383
(21,905)
(339)
80
(35,741)
461,350
－
－
－
－
－
－
119
591
(122)
588
80,264
33,306
－
(3,130)
(6,136)
(6,136)
24,039
67,176
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
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
308,395
69,312
69,312
－
－
－
－
－
(17,452)
2,604
(14,848)
362,859
23,661
3,848
267
－
－
－
－
(3,231)
(706)
(3,938)
23,839
－
－
－
－
－
－
－
(15,008)
1,021
(13,987)
(17,937)
478,871
48,997
(3,327)
45,670
(15,008)
1,048
383
(24,388)
(1,645)
80
(39,530)
485,011
(11)
134
－
－
－
－
－
－
－
122
(17,815)
485,011
73,160
23,506
(20,684)
(11)
253
591
(828)
15
(20,664)
561,014
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
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)
－
－
－
－
－
－
－
35,292
－
8,705
8,705
－
－
－
－
－
(6,136)
(6,136)
37,862
1,204
－
(3,495)
(3,495)
－
－
－
－
－
－
－
Closing balance
(11,531)
(2,290)
(3,130)
42,430
3,240
Equity attributable to owners of the parent
Issued capital
Capital surplus
Retained earnings
Treasury shares
67,176
79,676
(17,937)
(Millions of Yen)
Year ended March 31, 2018
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
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.
(11,531)
－
3,757
3,757
－
－
－
－
－
－
－
37,862
－
8,311
8,311
－
－
－
－
－
(2,589)
(2,589)
43,584
(2,290)
－
11,170
24,039
－
23,239
461,350
69,312
23,239
－
－
－
－
－
－
－
(17,452)
(11)
253
591
(122)
15
(16,726)
537,175
(2,589)
(2,589)
44,689
Closing balance
(7,774)
8,880
66
NSK REPORT 2018
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 expenses 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 and redemption 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
Acquisition of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
(Millions of Yen)
2017
2018
63,617
43,354
(20,133)
(2,414)
3,701
(5,086)
(22,007)
(3,756)
14,439
13,446
97,248
46,785
(985)
(2,329)
2,978
(6,448)
(12,464)
(10,382)
(11,116)
(2,957)
85,161
100,328
6,440
(3,746)
(19,919)
5,174
(2,921)
(18,835)
67,936
83,746
(53,297)
2,932
(11,166)
10,785
(3,498)
(61,397)
386
(162)
16,941
(8,769)
(54,243)
(53,001)
6,914
(17,963)
20,000
(20,000)
(15,001)
(21,882)
(2,482)
2,003
12,000
(48,687)
20,000
－
(4)
(17,438)
(3,233)
(2,440)
11,170
23,239
92,551
4,116
96,667
Effect of exchange rate changes on cash and cash equivalents
(1,221)
770
Net cash used in financial activities
(48,413)
(39,804)
Net increase (decrease) in cash and cash equivalents
(35,942)
(8,289)
Cash and cash equivalents at beginning of the period
175,515
139,573
Cash and cash equivalents at end of the period
139,573
131,283
NSK REPORT 2018
67
Data Section
Management’s Discussion and Analysis of Financial Position,
Results of Operations and Cash Flows
1
Overview of the Year Ended March 31, 2018
3
Analysis of Financial Position
Business performance in each business segment
remained strong amid the gradual recovering trend of
the world economy, enabling the NSK Group to set new
record-highs for both sales and operating income.
capital expenditures. Meanwhile, the Chinese economy
enjoyed steady growth, boosted by a range of
government policies, while other Asian economies
exhibited a gradual recovery.
Looking at global economic conditions during the
In this economic environment, consolidated net
year ended March 31, 2018, the Japanese economy
underwent a gradual recovery, mainly driven by a
pick-up in consumption and steady improvement in
employment. The U.S. economy continued to see solid
growth due to stronger employment and capital
expenditures. The European economy trended toward
recovery, primarily in the Eurozone, on the back of
growth in consumption and a moderate increase in
sales for the year ended March 31, 2018 totaled
¥1,020,338 million, a year-on-year increase of 7.5%, and
operating income totaled ¥97,875 million, a year-on-year
increase of 49.8%. Income before income taxes was
¥97,248 million, a year-on-year increase of 52.9%. Net
income attributable to owners of the parent was ¥69,312
million, a year-on-year increase of 52.1%.
2
Business Segment Information
Details regarding the market environment and results by business segment are as follows.
Industrial Machinery Business segment
Automotive Business segment
The Industrial Machinery Business has continued to
recover. Looking at the NSK Group’s results by
geographic breakdown, sales in Japan increased,
primarily in the machine tool and electrical sectors. In
the Americas, sales in the semiconductor and general
machinery sectors rose. In Europe, sales increased,
primarily in the machine tool and aftermarket sectors.
Sales in China also grew steadily due to strength in the
electrical, and aftermarket sectors. In other Asian
countries, sales increased due to a continuing recovery in
demand, primarily in the semiconductor sector.
As a result, net sales in the industrial machinery
business totaled ¥266,249 million, a year-on-year
increase of 17.3%. Operating income was ¥28,333
million, a year-on-year increase of 93.3%.
In the Industrial Machinery Business, sales to such
sectors as machine tools, semiconductors, and electrical
equipment were strong, and both sales and operating
income could be significantly increased against a
backdrop of expansion in production volume associated
with robust demand. In addition to strengthening our
productivity by investing in capacity increase, we are
improving our portfolio by concentrating on high-
value-added products and high-profit sectors while
improving profitability. Going forward, to expand the
Industrial Machinery Business’s presence in the market
over the medium to long term, we will continue to focus
on growth areas and work to expand profit-generating
business.
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 declined due to slowdown in the U.S.
automotive market. In Europe, sales increased due to
solid vehicle sales. In China, the increase in sales was
slight, partially due to a change in product mix.
Meanwhile, sales in other Asian countries rose,
primarily in India.
As a result, net sales in the automotive business
totaled ¥723,564 million, a year-on-year increase of
3.9%. Operating income totaled ¥65,963 million, a
year-on-year increase of 2.1%.
In the Automotive Business, the gradual expansion
of global automobile production volumes continued, and
we achieved record-high sales as the Japanese
powertrain business in particular performed well.
Although there were cost hike factors, such as increases
in the prices of raw materials, we were able to maintain
operating income in the 9% range due to improvements
in productivity and other cost reductions. Going forward,
we will aim for continued growth from the powertrain
business and to contribute to new automotive
technologies, such as EVs and autonomous driving, by
means of the elemental technologies accumulated up to
now and new technological initiatives.
Total assets were ¥1,092,310 million, an increase of ¥48,355
million in net income attributable to owners of the parent,
million compared to total assets on March 31, 2017. The
and ¥20,649 million in other components of equity.
main reasons for this were increases of ¥16,245 million in
Total current assets increased ¥5,061 million compared
trade receivables and other receivables, ¥11,242 million in
with the previous fiscal year-end, to ¥511,346 million. Total
inventories, ¥22,691 million in property, plant and equipment,
current liabilities decreased ¥10,642 million compared with
and ¥9,202 million in net defined benefit assets, which offset
the previous fiscal year-end to ¥307,960 million. As a result,
a decrease of ¥10,330 million in other financial assets
the current ratio increased from 1.59 times as of the previous
(current).
fiscal year-end to 1.66 times. Gross interest-bearing debt
Total liabilities were ¥531,296 million, a decrease of
decreased ¥16,491 million compared with the end of the
¥27,647 million compared to total liabilities as of March 31,
previous fiscal year-end to ¥250,908 million. Net
2017. The main reasons for this were decreases of ¥8,415
interest-bearing debt (interest-bearing debt net of cash and
million in trade payables and other payables, ¥2,072 million
cash equivalents) was down ¥8,202 million compared with
in other financial liabilities (current), ¥14,230 million in
the previous fiscal year-end to ¥119,624 million. The net D/E
financial liabilities (non-current), ¥5,817 million in net
ratio decreased from 0.28 in the previous fiscal year to 0.22.
defined benefit liabilities, and ¥3,210 million in provisions
Equity per share attributable to owners of the parent
(non-current), which offset an increase of ¥5,823 million in
increased from ¥873.11 to ¥1,016.30. The equity ratio
deferred tax liabilities.
attributable to owners of the parent increased from 44.2% as
Total equity totaled ¥561,014 million, an increase of
of the previous fiscal year-end to 49.2%.
¥76,003 million compared to total equity as of March 31,
2017. The main reasons for this were increases of ¥69,312
4
Cash Flows
Total cash and cash equivalents at the end of the period were ¥131,283 million, a year-on-year decrease of ¥8,289
million. Cash flows for the fiscal year under review are presented as follows.
Net cash flow provided
by operating activities
Net cash flow used
in investing activities
Net cash flow used
in financing activities
Net cash flow provided by operating
activities totaled ¥83,746 million, an
Net cash flow used in investing activities
Net cash flow used in financing
totaled ¥53,001 million, a decrease of
activities totaled ¥39,804 million, a
increase of ¥15,810 million, compared to
¥1,241 million compared to the same
decrease of ¥8,609 million compared to
the same period of the previous year. The
period of the previous year. The main
the same period of the previous year.
main cash inflows were ¥97,248 million
cash outflow was ¥61,397 million in
The main outflows were ¥48,687 million
in income before income taxes, and
¥46,785 million in depreciation and
purchases of property, plant and
in repayments of long-term loans and
equipment. Meanwhile, the main cash
¥17,438 million in dividends paid.
amortisation. Meanwhile, the main cash
inflow was ¥16,941 million in proceeds
Meanwhile, the main cash inflows were
outflows were a ¥12,464 million increase
from sale and redemption of other
¥12,000 million in proceeds from
in trade receivables, a ¥10,382 million
financial assets.
increase in inventories, a ¥11,116 million
decrease in trade payables, and ¥18,835
million in income tax paid.
long-term loans and ¥20,000 million in
proceeds from issuance of corporate
bonds.
5
Fiscal Policy
The NSK Group’s financing is currently derived from its own
breakdown of which was loans from financial institutions of
funds and borrowings, etc. With regard to working capital, in
¥108,868 million and unsecured corporate bonds of ¥80,000
the case of financing through borrowing, it is common to
million.
obtain short-term loans with a term of less than one year in
Going forward, we aim to reduce our interest-bearing
the local currency used by each consolidated company. As of
debt by strengthening our financial and earnings structure.
March 31, 2018, the outstanding balance of short-term loans
The NSK Group believes that it is possible to finance the
was ¥62,039 million. Long-term funds, such as those for
working capital and capital expenditures necessary to
machinery and equipment for production, are financed
maintain growth through its sound financial situation, ability
primarily through long-term loans and corporate bonds. As
to generate cash flow from operating activities, commitment
of March 31, 2018, the outstanding balance of long-term
line contracts totaling ¥15,000 million and the issuance of
loans and corporate bonds was ¥188,868 million, the
commercial paper amounting to ¥50,000 million.
68
NSK REPORT 2018
NSK REPORT 2018
69
Data Section
Management’s Discussion and Analysis of Financial Position,
Results of Operations and Cash Flows
1
Overview of the Year Ended March 31, 2018
Business performance in each business segment
capital expenditures. Meanwhile, the Chinese economy
remained strong amid the gradual recovering trend of
enjoyed steady growth, boosted by a range of
the world economy, enabling the NSK Group to set new
government policies, while other Asian economies
record-highs for both sales and operating income.
exhibited a gradual recovery.
Looking at global economic conditions during the
In this economic environment, consolidated net
year ended March 31, 2018, the Japanese economy
sales for the year ended March 31, 2018 totaled
underwent a gradual recovery, mainly driven by a
¥1,020,338 million, a year-on-year increase of 7.5%, and
pick-up in consumption and steady improvement in
operating income totaled ¥97,875 million, a year-on-year
employment. The U.S. economy continued to see solid
increase of 49.8%. Income before income taxes was
growth due to stronger employment and capital
¥97,248 million, a year-on-year increase of 52.9%. Net
expenditures. The European economy trended toward
income attributable to owners of the parent was ¥69,312
recovery, primarily in the Eurozone, on the back of
million, a year-on-year increase of 52.1%.
growth in consumption and a moderate increase in
2
Business Segment Information
Details regarding the market environment and results by business segment are as follows.
Industrial Machinery Business segment
Automotive Business segment
The Industrial Machinery Business has continued to
The global automotive business continued its gradual
recover. Looking at the NSK Group’s results by
expansion. Looking at the Company’s results by
geographic breakdown, sales in Japan increased,
geographic breakdown, sales in Japan increased,
primarily in the machine tool and electrical sectors. In
primarily in products for transmission systems. In the
the Americas, sales in the semiconductor and general
Americas, sales declined due to slowdown in the U.S.
machinery sectors rose. In Europe, sales increased,
automotive market. In Europe, sales increased due to
primarily in the machine tool and aftermarket sectors.
solid vehicle sales. In China, the increase in sales was
Sales in China also grew steadily due to strength in the
slight, partially due to a change in product mix.
electrical, and aftermarket sectors. In other Asian
Meanwhile, sales in other Asian countries rose,
countries, sales increased due to a continuing recovery in
primarily in India.
demand, primarily in the semiconductor sector.
As a result, net sales in the automotive business
As a result, net sales in the industrial machinery
totaled ¥723,564 million, a year-on-year increase of
business totaled ¥266,249 million, a year-on-year
3.9%. Operating income totaled ¥65,963 million, a
increase of 17.3%. Operating income was ¥28,333
year-on-year increase of 2.1%.
million, a year-on-year increase of 93.3%.
In the Automotive Business, the gradual expansion
In the Industrial Machinery Business, sales to such
of global automobile production volumes continued, and
sectors as machine tools, semiconductors, and electrical
we achieved record-high sales as the Japanese
equipment were strong, and both sales and operating
powertrain business in particular performed well.
income could be significantly increased against a
Although there were cost hike factors, such as increases
backdrop of expansion in production volume associated
in the prices of raw materials, we were able to maintain
with robust demand. In addition to strengthening our
operating income in the 9% range due to improvements
productivity by investing in capacity increase, we are
in productivity and other cost reductions. Going forward,
improving our portfolio by concentrating on high-
we will aim for continued growth from the powertrain
value-added products and high-profit sectors while
business and to contribute to new automotive
improving profitability. Going forward, to expand the
technologies, such as EVs and autonomous driving, by
Industrial Machinery Business’s presence in the market
means of the elemental technologies accumulated up to
over the medium to long term, we will continue to focus
now and new technological initiatives.
on growth areas and work to expand profit-generating
business.
3
Analysis of Financial Position
Total assets were ¥1,092,310 million, an increase of ¥48,355
million compared to total assets on March 31, 2017. The
main reasons for this were increases of ¥16,245 million in
trade receivables and other receivables, ¥11,242 million in
inventories, ¥22,691 million in property, plant and equipment,
and ¥9,202 million in net defined benefit assets, which offset
a decrease of ¥10,330 million in other financial assets
(current).
Total liabilities were ¥531,296 million, a decrease of
¥27,647 million compared to total liabilities as of March 31,
2017. The main reasons for this were decreases of ¥8,415
million in trade payables and other payables, ¥2,072 million
in other financial liabilities (current), ¥14,230 million in
financial liabilities (non-current), ¥5,817 million in net
defined benefit liabilities, and ¥3,210 million in provisions
(non-current), which offset an increase of ¥5,823 million in
deferred tax liabilities.
Total equity totaled ¥561,014 million, an increase of
¥76,003 million compared to total equity as of March 31,
2017. The main reasons for this were increases of ¥69,312
4
Cash Flows
million in net income attributable to owners of the parent,
and ¥20,649 million in other components of equity.
Total current assets increased ¥5,061 million compared
with the previous fiscal year-end, to ¥511,346 million. Total
current liabilities decreased ¥10,642 million compared with
the previous fiscal year-end to ¥307,960 million. As a result,
the current ratio increased from 1.59 times as of the previous
fiscal year-end to 1.66 times. Gross interest-bearing debt
decreased ¥16,491 million compared with the end of the
previous fiscal year-end to ¥250,908 million. Net
interest-bearing debt (interest-bearing debt net of cash and
cash equivalents) was down ¥8,202 million compared with
the previous fiscal year-end to ¥119,624 million. The net D/E
ratio decreased from 0.28 in the previous fiscal year to 0.22.
Equity per share attributable to owners of the parent
increased from ¥873.11 to ¥1,016.30. The equity ratio
attributable to owners of the parent increased from 44.2% as
of the previous fiscal year-end to 49.2%.
Total cash and cash equivalents at the end of the period were ¥131,283 million, a year-on-year decrease of ¥8,289
million. Cash flows for the fiscal year under review are presented as follows.
Net cash flow provided
by operating activities
Net cash flow used
in investing activities
Net cash flow used
in financing activities
Net cash flow used in investing activities
totaled ¥53,001 million, a decrease of
¥1,241 million compared to the same
period of the previous year. The main
cash outflow was ¥61,397 million in
purchases of property, plant and
equipment. Meanwhile, the main cash
inflow was ¥16,941 million in proceeds
from sale and redemption of other
financial assets.
Net cash flow used in financing
activities totaled ¥39,804 million, a
decrease of ¥8,609 million compared to
the same period of the previous year.
The main outflows were ¥48,687 million
in repayments of long-term loans and
¥17,438 million in dividends paid.
Meanwhile, the main cash inflows were
¥12,000 million in proceeds from
long-term loans and ¥20,000 million in
proceeds from issuance of corporate
bonds.
Net cash flow provided by operating
activities totaled ¥83,746 million, an
increase of ¥15,810 million, compared to
the same period of the previous year. The
main cash inflows were ¥97,248 million
in income before income taxes, and
¥46,785 million in depreciation and
amortisation. Meanwhile, the main cash
outflows were a ¥12,464 million increase
in trade receivables, a ¥10,382 million
increase in inventories, a ¥11,116 million
decrease in trade payables, and ¥18,835
million in income tax paid.
5
Fiscal Policy
The NSK Group’s financing 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, 2018, the outstanding balance of short-term loans
was ¥62,039 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, 2018, the outstanding balance of long-term
loans and corporate bonds was ¥188,868 million, the
breakdown of which was loans from financial institutions of
¥108,868 million and unsecured corporate bonds of ¥80,000
million.
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 expenditures necessary to
maintain growth through its sound financial situation, ability
to generate cash flow from operating activities, commitment
line contracts totaling ¥15,000 million and the issuance of
commercial paper amounting to ¥50,000 million.
68
NSK REPORT 2018
NSK REPORT 2018
69
Data Section
Basic Knowledge of Bearings
Here, we provide basic information on bearings.
Structure and Function
Bearings̶the staple of industry. A surprisingly large number of them can be found all around us. Bearings are used in all kinds
of machinery, such as automobiles, airplanes, washing machines, refrigerators, air conditioners, vacuum cleaners, photocopy
machines, computers and even in satellites far away in outer space. Bearings enhance the functionality of machinery and help
to save energy. Around 100 bearings are used in the average household and 100 to 150 or more are in an automobile. They play
an active role in making our lives smoother everywhere in the world, from everyday life to offices, factories and cutting-edge
science laboratories. Bearings are utilized in tough environments and in hidden places, such as inside machinery, so we do not
usually get the opportunity to 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
category of bearings, known as
rolling bearings. Rolling bearings are
made up of four elements̶an outer
ring, an inner ring, a cage as well as
rolling elements̶and have an
extremely simple basic structure.
Function
Outer ring
Cage
Inner ring
Rolling
elements
(balls)
Outer ring
Rolling
elements
(rollers)
Cage
Inner ring
Ball Bearing
Roller Bearing
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.
Did you know? ̶the Amazing World of Bearings
Playing a role in severe ultra-high and ultra-low temperature environments
High temperature
Low temperature
Ranging in size from an outer diameter of 6 m down to 2 mm
Largest
Smallest
Medical CT scanners have become
an essential part of keeping us
healthy. High-performance
bearings are used inside the CT
scanner vacuum tubes that
generate X-rays and are working
in high-temperature environments
reaching 300 to 500°C.
The Eurotunnel, which links
England and France under the
Strait of Dover, was dug using a
tunnel boring machine that
employed an extra large size
bearing weighing 15 tons and
having an outer diameter of 6 m.
Dental handpieces used by
dentists rotate at an
astounding speed of 400,000
times per minute (6,600
times per second). The
high-accuracy, low-vibration
bearings used in these
devices help reduce pain
during medical treatment.
NSK bearings work in ultra-low
temperature environments of
-162°C in LNG (liquefied natural
gas) pumps. Moreover, some
bearings are used in
environments of -250°C within
the liquid fuel pumps of space
rockets.
Miniature bearings are used in
cooling fans and extra small
motors, for example. The
smallest bearings made by NSK
have a bore diameter of 0.6 mm,
an outer diameter of 2.0 mm
and a thickness of 0.8 mm.
With a sphericity of less than 0.05
micrometers, the balls that are
closest to being perfect spheres
on Earth are the balls used in
bearings. If a 10-mm diameter ball
were enlarged to the size of the
Earth, any bumps would only be
about the size of the Great Buddha
of Kamakura, Japan (11 m).
Astounding rotation speed of 400,000 times per minute
The balls that are the closest to being perfect spheres on Earth
High-speed rotation
Sphericity
Bearings used in different environments
Artificial satellites
Wind turbines
Food processing machinery
With its vacuum, microgravity, severe
temperature differences and cosmic
Wind turbine generators are increasingly used as a
Food processing machinery’s greatest priority is the
source of renewable energy. The locations in which
consideration of health and safety. Naturally,
radiation, the special environment of space
these are installed have expanded from coastlands
bearings must not contain any toxic substances for
differs from the environment of Earth. Even
and mountains to the
so, bearings must perform flawlessly here.
ocean and are required to
NSK bearings also are used in the flywheels
be maintenance-free
for artificial satellite attitude control.
under severe
humans but must be resistant to water and dust, be
able to withstand antiseptic chemicals and be
unlikely to rust. Therefore bearings for special
environments which meet these needs are also used.
environmental conditions.
Extra large size bearings,
which can reach 2 m in
size, are now required to
provide greater reliability
and durability than before.
(C) JAXA
SPACEATM Series bearings for special environments
70
NSK REPORT 2018
NSK REPORT 2018
71
Data Section
Basic Knowledge of Bearings
Here, we provide basic information on bearings.
Structure and Function
Bearings̶the staple of industry. A surprisingly large number of them can be found all around us. Bearings are used in all kinds
of machinery, such as automobiles, airplanes, washing machines, refrigerators, air conditioners, vacuum cleaners, photocopy
machines, computers and even in satellites far away in outer space. Bearings enhance the functionality of machinery and help
to save energy. Around 100 bearings are used in the average household and 100 to 150 or more are in an automobile. They play
an active role in making our lives smoother everywhere in the world, from everyday life to offices, factories and cutting-edge
science laboratories. Bearings are utilized in tough environments and in hidden places, such as inside machinery, so we do not
usually get the opportunity to 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
category of bearings, known as
rolling bearings. Rolling bearings are
made up of four elements̶an outer
ring, an inner ring, a cage as well as
rolling elements̶and have an
extremely simple basic structure.
Function
Outer ring
Cage
Inner ring
Rolling
elements
(balls)
Outer ring
Rolling
elements
(rollers)
Cage
Inner ring
Ball Bearing
Roller Bearing
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.
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.
Did you know? ̶the Amazing World of Bearings
Playing a role in severe ultra-high and ultra-low temperature environments
High temperature
Low temperature
Medical CT scanners have become
an essential part of keeping us
healthy. High-performance
bearings are used inside the CT
scanner vacuum tubes that
generate X-rays and are working
in high-temperature environments
reaching 300 to 500°C.
NSK bearings work in ultra-low
temperature environments of
-162°C in LNG (liquefied natural
gas) pumps. Moreover, some
bearings are used in
environments of -250°C within
the liquid fuel pumps of space
rockets.
Ranging in size from an outer diameter of 6 m down to 2 mm
Largest
Smallest
The Eurotunnel, which links
England and France under the
Strait of Dover, was dug using a
tunnel boring machine that
employed an extra large size
bearing weighing 15 tons and
having an outer diameter of 6 m.
Miniature bearings are used in
cooling fans and extra small
motors, for example. The
smallest bearings made by NSK
have a bore diameter of 0.6 mm,
an outer diameter of 2.0 mm
and a thickness of 0.8 mm.
Astounding rotation speed of 400,000 times per minute
The balls that are the closest to being perfect spheres on Earth
High-speed rotation
Sphericity
Dental handpieces used by
dentists rotate at an
astounding speed of 400,000
times per minute (6,600
times per second). The
high-accuracy, low-vibration
bearings used in these
devices help reduce pain
during medical treatment.
With a sphericity of less than 0.05
micrometers, the balls that are
closest to being perfect spheres
on Earth are the balls used in
bearings. If a 10-mm diameter ball
were enlarged to the size of the
Earth, any bumps would only be
about the size of the Great Buddha
of Kamakura, Japan (11 m).
Bearings used in different environments
1
Deep groove ball bearing
2
Angular contact thrust ball bearing
3
Thrust ball bearing
4
Cylindrical roller bearing
Artificial satellites
Wind turbines
Food processing machinery
With its vacuum, microgravity, severe
temperature differences and cosmic
radiation, the special environment of space
differs from the environment of Earth. Even
so, bearings must perform flawlessly here.
NSK bearings also are used in the flywheels
for artificial satellite attitude control.
Wind turbine generators are increasingly used as a
source of renewable energy. The locations in which
these are installed have expanded from coastlands
and mountains to the
ocean and are required to
be maintenance-free
under severe
environmental conditions.
Extra large size bearings,
which can reach 2 m in
size, are now required to
provide greater reliability
and durability than before.
Food processing machinery’s greatest priority is the
consideration of health and safety. Naturally,
bearings must not contain any toxic substances for
humans but must be resistant to water and dust, be
able to withstand antiseptic chemicals and be
unlikely to rust. Therefore bearings for special
environments which meet these needs are also used.
(C) JAXA
SPACEATM Series bearings for special environments
70
NSK REPORT 2018
NSK REPORT 2018
71
Data Section
Glossary
Term
Actuator
Aftermarket
Alternator
Ball Screw
BCP
BOD
Brake Boosters
Brake Rotor
Meaning
Meaning
Actuators refer to mechanical components that, for example, play a role in the actuation of brakes and gear shifting of
automobiles.
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.
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.
BOD stands for Biochemical Oxygen Demand and serves as an index to indicate the degree of water pollution caused by
organic compounds. Specifically, BOD refers to the amount of oxygen required for microbes to oxidize and decompose the
organic compounds. The value shown in the Material Balance (P. 50) indicates the BOD load as determined by multiplying
the amount of water discharged into rivers from NSK’s business sites by the BOD measurement value.
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.
Brake rotors are the disc-shaped components that make up part of the disc braking systems found in automobiles and
motorcycles. By pressing the other part of the brake (brake pad) against the rotor as it turns along with the wheel, the
resulting friction decelerates or stops the wheel.
Clutch Assembly
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
Column-Type EPS
(Column Assist EPS)
Conflict Minerals
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
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.
CVT
ECU
CVT stands for Continuously Variable Transmission, also known as gearless transmission. This term refers to
transmissions that continuously shift the gear ratio using a mechanism other than gears.
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.”
Electric Tilt and Telescopic
Mechanisms
Electric tilt and telescopic mechanisms enable the steering wheel to be adjusted to an angle and position that is
comfortable for the driver to operate. The tilt mechanism adjusts the steering wheel angle (height), and the telescopic
mechanism adjusts the forward and backward position of the steering wheel. Electric tilt and telescopic mechanisms
enable the angle and position to be adjusted electrically.
EPS
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.
Four Core Technologies
Four core technologies refer to NSK’s core technologies. For details, please refer to P. 40.
Friction
GAM
Green Procurement
Hub Unit Bearings
Friction refers to friction resistance. Friction becomes an important factor when applying different types of movement in
machinery and devices. In terms of bearings, friction affects the smoothness of movement when the inner ring and outer
ring turn, so reducing and controlling friction is essential.
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).
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.
Term
IoT
KAM
Mother Plant
MRO
Multistep AT
NIT
OHSAS18001
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.
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.
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.
Among the different types of automobile and motorcycle AT (automatic transmission) equipped with the capability to
automatically shift between gear ratios depending on vehicle speed and the rotational velocity of the engine, NSK refers to
such AT with seven or more gear stages as multistep AT.
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.
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
performance.
the NSK Group’s business.”
Operational Excellence
In this report, operational excellence refers to “efforts to enhance front-line capability to increase the competitiveness of
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
Planetary gear refers to a epicylic gearing mechanism consisting of three elements̶sun gear, planetary gear and ring gear.
Powertrain
PRTR Act
Powertrain describes the main components that generate power and deliver to the drive wheel in automobiles.
The PRTR Act stands for the Pollutant Release and Transfer Register Act and refers to the Act on Confirmation, etc., of
Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management
Thereof. This is a Japanese law intended to encourage the improvement of chemical substance management by requiring
that the amount of chemical substances released to the environment is reported to the authorities.
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 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.
Shift to By-Wire Technology
Shift to By-Wire Technology refers to the replacement of standard automobile handling systems, which are operated using
mechanical or physical mechanisms, with transmission systems that rely on electrical signals. In automobiles, some of the
potential targets for conversion to by-wire operations in the future include the accelerator, brakes, the gear shift and steering.
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.
VOC
XY Table
VOCs stands for Volatile Organic Compounds. VOCs are considered to be one cause of photochemical smog.
The XY table refers to the positioning devices that move in the X-axis (left and right) and the Y-axis (forward and backward).
By stacking mechanisms (tables) that can move in each direction, these devices can be positioned to the desired location.
These devices are used for precision positioning of industrial robots and semiconductor production equipment.
Rack-Type EPS
(Rack Assist EPS)
Sales Channel
Smart Factory
72
NSK REPORT 2018
NSK REPORT 2018
73
Data Section
Glossary
Term
Actuator
Aftermarket
Alternator
Ball Screw
BCP
BOD
Meaning
automobiles.
repair and replacement.
alternating current.
Actuators refer to mechanical components that, for example, play a role in the actuation of brakes and gear shifting of
Aftermarket refers to maintenance and repair demand. In NSK, aftermarket mainly means the demand and business for
An alternator is an electric generator to use and change engine rotation to electricity. The term alternator derives from
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.
BOD stands for Biochemical Oxygen Demand and serves as an index to indicate the degree of water pollution caused by
organic compounds. Specifically, BOD refers to the amount of oxygen required for microbes to oxidize and decompose the
organic compounds. The value shown in the Material Balance (P. 50) indicates the BOD load as determined by multiplying
the amount of water discharged into rivers from NSK’s business sites by the BOD measurement value.
Brake Boosters
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.
Brake Rotor
Brake rotors are the disc-shaped components that make up part of the disc braking systems found in automobiles and
motorcycles. By pressing the other part of the brake (brake pad) against the rotor as it turns along with the wheel, the
resulting friction decelerates or stops the wheel.
Clutch Assembly
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
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
(Column Assist EPS)
Conflict Minerals
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
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.
CVT stands for Continuously Variable Transmission, also known as gearless transmission. This term refers to
transmissions that continuously shift the gear ratio using a mechanism other than gears.
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.”
Electric Tilt and Telescopic
Mechanisms
Electric tilt and telescopic mechanisms enable the steering wheel to be adjusted to an angle and position that is
comfortable for the driver to operate. The tilt mechanism adjusts the steering wheel angle (height), and the telescopic
mechanism adjusts the forward and backward position of the steering wheel. Electric tilt and telescopic mechanisms
enable the angle and position to be adjusted electrically.
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.
Four Core Technologies
Four core technologies refer to NSK’s core technologies. For details, please refer to P. 40.
Friction refers to friction resistance. Friction becomes an important factor when applying different types of movement in
machinery and devices. In terms of bearings, friction affects the smoothness of movement when the inner ring and outer
ring turn, so reducing and controlling friction is essential.
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).
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
various types of hub unit bearings.
CVT
ECU
EPS
Friction
GAM
Term
IoT
KAM
Meaning
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.
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
Multistep AT
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.
Among the different types of automobile and motorcycle AT (automatic transmission) equipped with the capability to
automatically shift between gear ratios depending on vehicle speed and the rotational velocity of the engine, NSK refers to
such AT with seven or more gear stages as multistep AT.
Needle Bearing
Bearing with needle-type rolling elements. Low cross-sectional height and high load capacity helps realize space-saving.
NIT
OHSAS18001
NIT stands for NSK Institute of Technology, which is an internal educational institute for our engineers to master more
advanced technology.
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
performance.
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.”
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
Planetary gear refers to a epicylic gearing mechanism consisting of three elements̶sun gear, planetary gear and ring gear.
Powertrain
PRTR Act
Powertrain describes the main components that generate power and deliver to the drive wheel in automobiles.
The PRTR Act stands for the Pollutant Release and Transfer Register Act and refers to the Act on Confirmation, etc., of
Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management
Thereof. This is a Japanese law intended to encourage the improvement of chemical substance management by requiring
that the amount of chemical substances released to the environment is reported to the authorities.
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
Rack-Type EPS
(Rack Assist EPS)
Sales Channel
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.
Shift to By-Wire Technology
Shift to By-Wire Technology refers to the replacement of standard automobile handling systems, which are operated using
mechanical or physical mechanisms, with transmission systems that rely on electrical signals. In automobiles, some of the
potential targets for conversion to by-wire operations in the future include the accelerator, brakes, the gear shift and steering.
Smart Factory
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.
VOC
XY Table
VOCs stands for Volatile Organic Compounds. VOCs are considered to be one cause of photochemical smog.
The XY table refers to the positioning devices that move in the X-axis (left and right) and the Y-axis (forward and backward).
By stacking mechanisms (tables) that can move in each direction, these devices can be positioned to the desired location.
These devices are used for precision positioning of industrial robots and semiconductor production equipment.
72
NSK REPORT 2018
NSK REPORT 2018
73
Data Section
NSK Group
As of August 31, 2018
Region
Company name
Consolidated
equity
Outline of business
Japan
NSK STEERING SYSTEMS CO., LTD.
NSK MICRO PRECISION CO., LTD.
NSK MICRO PRECISION CO., LTD. (NAGANO)
AMATSUJI STEEL BALL MFG. CO., LTD.
AKS EAST JAPAN CO., LTD.
NSK KYUSHU CO., LTD.
ASAHI SEIKI CO., LTD.
SHINWA SEIKO CO., LTD.
NSK TOYAMA CO., LTD.
NSK MACHINERY CO., LTD.
KURIBAYASHI SEISAKUSHO CO., LTD.
NSK REAL ESTATE CO., LTD.
NISSEI BLDG. MANAGEMENT LTD.
NSK HUMAN RESOURCE SERVICES LTD.
NSK LOGISTICS CO., LTD.
NSK NETWORK AND SYSTEMS CO., LTD.
NSK-CHUGAI, LTD.
ADTECH CORPORATION
NSK OVERSEAS HOLDINGS CO., LTD.
NSK-WARNER K.K.
CHITOSE SANGYO CO., LTD.
INOUE JIKUUKE KOGYO CO., LTD.
NSK AMERICAS, INC.
NSK CORPORATION
NSK PRECISION AMERICA, INC.
NSK LATIN AMERICA, INC.
NSK STEERING SYSTEMS AMERICA, INC.
NSK-AKS PRECISION BALL COMPANY
THE AMERICAS
U.S.A.
100.0%
55.0%
100.0%
100.0%
100.0%
100.0%
73.8%
82.4%
100.0%
100.0%
73.5%
100.0%
70.0%
100.0%
100.0%
100.0%
65.0%
100.0%
100.0%
50.0%
50.0%
40.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Manufacture of automotive components
Manufacture and sales of automotive bearings, etc.
Manufacture of automotive bearings, etc.
Manufacture and sales of steel balls
Manufacture of steel balls
Manufacture of precision machinery & parts
Manufacture of industrial machinery bearing parts, etc.
Manufacture of automotive bearing parts, etc.
Manufacture of industrial machinery bearing parts
Manufacture of machine tools, etc.
Manufacture and sales of automotive bearing parts
Real estate management and rental, etc.
Management of Nissei Building
Consignment services for salary and welfare, education and recruitment
Distribution service
Design and development for computer systems, etc.
Sales of electrical components and insurance agent, etc.
Research and development of automotive components
Holding company of subsidiaries
Manufacture and sales of automotive-related products
Manufacture of automotive-related products
Manufacture and sales of industrial machinery bearings
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 BEARINGS EUROPE LTD.
NSK PRECISION UK LTD.
NSK UK LTD.
NSK STEERING SYSTEMS EUROPE 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
Manufacture of automotive bearings, etc.
Manufacture of precision machinery & parts
Sales of industrial machinery bearings, etc.
Manufacture of automotive components
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.
Region
Company name
Consolidated
Outline of business
equity
Netherlands
NSK EUROPEAN DISTRIBUTION CENTRE B.V.
100.0% Distribution service
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.
Control of Chinese subsidiaries and affiliates, sales of bearings, etc.
KUNSHAN NSK CO., LTD.
Manufacture of automotive bearings, etc.
NSK STEERING SYSTEMS DONGGUAN CO., LTD.
Manufacture of automotive components
ZHANGJIAGANG NSK PRECISION MACHINERY CO., LTD.
Manufacture of automotive bearing parts, etc.
CHANGSHU NSK NEEDLE BEARING CO., LTD.
AKS PRECISION BALL (HANGZHOU) CO., LTD.
SUZHOU NSK BEARINGS CO., LTD.
Manufacture of automotive bearings
Manufacture and sales of steel balls
Manufacture of automotive bearings
NSK-YAGI PRECISION FORGING (ZHANGJIAGANG) CO., LTD.
Manufacture of automotive bearing parts, etc.
NSK (CHINA) RESEARCH AND DEVELOPMENT CO., LTD.
Research and development of automotive bearings, etc.
NSK HANGZHOU AUTOMOTIVE COMPONENTS CO., LTD.
Manufacture of automotive components
NSK HANGZHOU AUTOMOBILE ELECTRONIC
TECHNOLOGY CO., LTD.
SHENYANG NSK PRECISION CO., LTD.
SHENYANG NSK CO., LTD.
HEFEI NSK CO., LTD.
100.0%
Manufacture of automotive components
Manufacture of precision machinery & parts
Manufacture of industrial machinery bearings
Manufacture of automotive bearings, etc.
TOHSHIN-NSK ROLLERS (SUZHOU) CO., LTD.
Manufacturing automotive bearing parts
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 LIMITED
100.0% Sales of industrial machinery bearings, etc.
India
NSK BEARINGS 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%
82.0%
100.0%
100.0%
100.0%
100.0%
100.0%
40.0%
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%
51.0%
74
NSK REPORT 2018
NSK REPORT 2018
75
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.
NSK MICRO PRECISION CO., LTD.
Manufacture and sales of automotive bearings, etc.
NSK MICRO PRECISION CO., LTD. (NAGANO)
Manufacture of automotive bearings, etc.
AMATSUJI STEEL BALL MFG. CO., LTD.
Manufacture and sales of steel balls
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.
Manufacture of automotive components
Netherlands
NSK EUROPEAN DISTRIBUTION CENTRE B.V.
100.0% Distribution service
Data Section
NSK Group
As of August 31, 2018
100.0%
55.0%
100.0%
100.0%
100.0%
100.0%
73.8%
82.4%
100.0%
100.0%
73.5%
100.0%
70.0%
100.0%
100.0%
100.0%
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%
AKS EAST JAPAN CO., LTD.
NSK KYUSHU CO., LTD.
ASAHI SEIKI CO., LTD.
SHINWA SEIKO CO., LTD.
NSK TOYAMA CO., LTD.
NSK MACHINERY CO., LTD.
KURIBAYASHI SEISAKUSHO CO., LTD.
NSK REAL ESTATE CO., LTD.
NISSEI BLDG. MANAGEMENT LTD.
NSK-CHUGAI, LTD.
ADTECH CORPORATION
NSK-WARNER K.K.
CHITOSE SANGYO CO., LTD.
NSK HUMAN RESOURCE SERVICES LTD.
Consignment services for salary and welfare, education and recruitment
NSK LOGISTICS CO., LTD.
Distribution service
NSK NETWORK AND SYSTEMS CO., LTD.
Design and development for computer systems, etc.
NSK OVERSEAS HOLDINGS CO., LTD.
Holding company of subsidiaries
INOUE JIKUUKE KOGYO CO., LTD.
Manufacture and sales of industrial machinery bearings
Manufacture of steel balls
Manufacture of precision machinery & parts
Manufacture of industrial machinery bearing parts, etc.
Manufacture of automotive bearing parts, etc.
Manufacture of industrial machinery bearing parts
Manufacture of machine tools, etc.
Manufacture and sales of automotive bearing parts
Real estate management and rental, etc.
Management of Nissei Building
Sales of electrical components and insurance agent, etc.
Research and development of automotive components
Manufacture and sales of automotive-related products
Manufacture of automotive-related products
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.
THE AMERICAS
U.S.A.
NSK AMERICAS, INC.
NSK CORPORATION
NSK PRECISION AMERICA, INC.
NSK LATIN AMERICA, INC.
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 BEARINGS EUROPE LTD.
NSK PRECISION UK LTD.
NSK UK LTD.
NSK STEERING SYSTEMS EUROPE 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
Manufacture of automotive bearings, etc.
Manufacture of precision machinery & parts
Sales of industrial machinery bearings, etc.
Manufacture of automotive components
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.
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.
NSK STEERING SYSTEMS DONGGUAN CO., LTD.
ZHANGJIAGANG NSK PRECISION MACHINERY CO., LTD.
CHANGSHU NSK NEEDLE BEARING CO., LTD.
AKS PRECISION BALL (HANGZHOU) CO., LTD.
SUZHOU NSK BEARINGS CO., LTD.
NSK-YAGI PRECISION FORGING (ZHANGJIAGANG) CO., LTD.
NSK (CHINA) RESEARCH AND DEVELOPMENT CO., LTD.
NSK HANGZHOU AUTOMOTIVE COMPONENTS CO., LTD.
NSK HANGZHOU AUTOMOBILE ELECTRONIC
TECHNOLOGY CO., LTD.
SHENYANG NSK PRECISION CO., LTD.
SHENYANG NSK CO., LTD.
HEFEI NSK CO., LTD.
TOHSHIN-NSK ROLLERS (SUZHOU) CO., LTD.
100.0%
85.0%
100.0%
100.0%
100.0%
100.0%
100.0%
82.0%
100.0%
100.0%
Control of Chinese subsidiaries and affiliates, sales of bearings, etc.
Manufacture of automotive bearings, etc.
Manufacture of automotive components
Manufacture of automotive bearing parts, etc.
Manufacture of automotive bearings
Manufacture and sales of steel balls
Manufacture of automotive bearings
Manufacture of automotive bearing parts, etc.
Research and development of automotive bearings, etc.
Manufacture of automotive components
100.0%
Manufacture of automotive components
100.0%
100.0%
100.0%
40.0%
Manufacture of precision machinery & parts
Manufacture of industrial machinery bearings
Manufacture of automotive bearings, etc.
Manufacturing automotive bearing parts
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.
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 LIMITED
100.0% Sales of industrial machinery bearings, etc.
India
NSK BEARINGS INDIA PRIVATE LIMITED
RANE NSK STEERING SYSTEMS PRIVATE LTD.
100.0%
51.0%
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.
74
NSK REPORT 2018
NSK REPORT 2018
75
Data Section
Information for Investors / Company Data
As of March 31, 2018
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/
Common Stock
Authorized: 1,700,000,000 shares
Issued: 551,268,104 shares
(including 20,075,546 shares of treasury stock)
Number of Shareholders
34,878
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan
Third-Party Assurances
To ensure the reliability and
accuracy of NSK Report 2018 as
an integrated report, NSK
obtained assurances from an
external third party for the
following data information
described in this report.
● Lost-Worktime Injury Rate (P. 49)
● Energy Use (P. 50)
● Water Withdrawal (P. 50)
● Greenhouse Gases Emissions
(Scope 1, 2 and 3) (P. 50)
● Total Waste (P. 50)
● VOC Emissions (P. 50)
Listing
Tokyo
Security Code
6471
Breakdown of Shareholders (%)
(by shareholder type)
1.91.9
1.81.8
1.71.7
3.73.7
3.63.6
Items Subject to Assurance
9.5
8.7
10.2
9.7
10.9
26.9
28.5
24.2
25.3
24.1
9.3
9.2
2.32.3
2.22.2
9.2
3.33.3
8.9
8.7
2.42.4
1.71.7
50.0
49.6
51.6
50.1
50.9
2014
2015
2016
2017
2018
(As of March 31)
■ Financial Institutions ■ Securities Companies
■ Other Japanese Corporations ■ Foreign Investors
■ Individuals / Others ■ Treasury Stock
Other Information Concerning the Company
NSK Report 2017
IR-Related Information
Please refer to the Company's IR website for other IR
information including the latest news and detailed
financial data.
http://www.nsk.com/investors/
NSK issued its second integrated report, “NSK Report
2017” last year. Following the previous year’s “NSK
Report 2016,” this marked the second consecutive
year that NSK was recognized with the WICI Japan
Award for Excellence in Integrated Reporting.
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/
76
NSK REPORT 2018
CSR Report 2018
NSK Report 2017
Independent Verification Report
Independent Assurance Statement
At the Time of Publishing the NSK Report 2018
In 2016, the year NSK celebrated the
which are undergoing dramatic
content of the NSK Report and will
100th anniversary of its
technological once-in-a-century
use it as a tool for dialogue with
establishment, the Company
advances, as well as our initiatives
stakeholders. I would be delighted
published its first integrated report
toward CSR/ESG management,
to receive the frank views and
with the goal of supporting readers
which looks to realize a sustainable
requests of everyone who reads this
in gaining a deeper understanding
future. Also, through an interview
report.
of NSK’s mid- to long-term value
creation process. Two years have
with the head of technology, we will
introduce the “strength of our
passed since that first publication,
fundamental technologies,” which is
and we keenly feel that through this
one of our capabilities that supports
integrated report there has been an
NSK’s corporate value, as well as
increase in the number of
opportunities for constructive
the “Future in Motion” upon which
we are currently taking action.
dialogue not only with shareholders
For this report, not only the
and investors but also with our
members of the departments in
employees and all our stakeholders.
charge but also various involved
“NSK Report 2018” marks our
parties working together gave
third integrated report. For this
consideration to NSK’s value
edition, we have made “Setting the
creation framework and future, and
Future in Motion” as the theme that
jointly worked on the report. As the
represents the vision of how we see
executive officer responsible for the
ourselves a decade after our 100th
creation of this report, I expressly
anniversary. In this year’s
stated that the production process
publication, we hope to convey, to
be valid and the information
some extent, the story of NSK’s
value creation, specifically, the
contained herein be accurate.
Looking to the future as well,
creation of value for automobiles,
NSK will work to further enrich the
Director, Senior Vice President
Head of Corporate Planning
Division Headquarters
Akitoshi Ichii
NSK REPORT 2018
77
Information for Investors / Company Data
Data Section
As of March 31, 2018
Corporate Address
NSK Ltd.
Tokyo 141-8560, Japan
Tel: +81-3-3779-7111
Fax: +81-3-3779-7431
Contact Information
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
Listing
Tokyo
Security Code
6471
For questions or additional information, please contact:
IR Office, NSK Ltd.
Breakdown of Shareholders (%)
(by shareholder type)
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/
Common Stock
Authorized: 1,700,000,000 shares
Issued: 551,268,104 shares
Number of Shareholders
34,878
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
financial data.
http://www.nsk.com/investors/
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/
76
NSK REPORT 2018
(including 20,075,546 shares of treasury stock)
50.0
49.6
51.6
50.1
50.9
2014
2015
2016
2017
2018
(As of March 31)
■ Financial Institutions ■ Securities Companies
■ Other Japanese Corporations ■ Foreign Investors
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan
■ Individuals / Others ■ Treasury Stock
Other Information Concerning the Company
NSK Report 2017
IR-Related Information
Please refer to the Company's IR website for other IR
information including the latest news and detailed
NSK issued its second integrated report, “NSK Report
2017” last year. Following the previous year’s “NSK
Report 2016,” this marked the second consecutive
year that NSK was recognized with the WICI Japan
Award for Excellence in Integrated Reporting.
CSR Report 2018
NSK Report 2017
Third-Party Assurances
To ensure the reliability and
accuracy of NSK Report 2018 as
an integrated report, NSK
obtained assurances from an
external third party for the
following data information
described in this report.
1.91.9
1.81.8
1.71.7
3.73.7
3.63.6
Items Subject to Assurance
9.5
8.7
10.2
9.7
10.9
26.9
28.5
24.2
25.3
24.1
9.3
9.2
2.32.3
2.22.2
9.2
3.33.3
8.9
8.7
2.42.4
1.71.7
● Lost-Worktime Injury Rate (P. 49)
● Energy Use (P. 50)
● Water Withdrawal (P. 50)
● Greenhouse Gases Emissions
(Scope 1, 2 and 3) (P. 50)
● Total Waste (P. 50)
● VOC Emissions (P. 50)
Independent Verification Report
Independent Assurance Statement
At the Time of Publishing the NSK Report 2018
In 2016, the year NSK celebrated the
100th anniversary of its
establishment, the Company
published its first integrated report
with the goal of supporting readers
in gaining a deeper understanding
of NSK’s mid- to long-term value
creation process. Two years have
passed since that first publication,
and we keenly feel that through this
integrated report there has been an
increase in the number of
opportunities for constructive
dialogue not only with shareholders
and investors but also with our
employees and all our stakeholders.
“NSK Report 2018” marks our
third integrated report. For this
edition, we have made “Setting the
Future in Motion” as the theme that
represents the vision of how we see
ourselves a decade after our 100th
anniversary. In this year’s
publication, we hope to convey, to
some extent, the story of NSK’s
value creation, specifically, the
creation of value for automobiles,
which are undergoing dramatic
technological once-in-a-century
advances, as well as our initiatives
toward CSR/ESG management,
which looks to realize a sustainable
future. Also, through an interview
with the head of technology, we will
introduce the “strength of our
fundamental technologies,” which is
one of our capabilities that supports
NSK’s corporate value, as well as
the “Future in Motion” upon which
we are currently taking action.
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 production process
be valid and the information
contained herein be accurate.
Looking to the future as well,
NSK will work to further enrich the
content of the NSK Report and will
use it as a tool for dialogue with
stakeholders. I would be delighted
to receive the frank views and
requests of everyone who reads this
report.
Director, Senior Vice President
Head of Corporate Planning
Division Headquarters
Akitoshi Ichii
NSK REPORT 2018
77
N
S
K
R
E
P
O
R
T
2
0
1
8
NSK REPORT 2018
Year ended March 31, 2018
Integrated Report
NSK used environmentally friendly paper and printing methods for this publication.
CAT. No. E8411 2018 B-10 Printed in Japan @NSK Ltd. 2018