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NSK REPORT 2019
Year ended March 31, 2019
Integrated Report
NSK used environmentally friendly paper and printing methods for this publication.
CAT. No. E8412 2019 B-10 Printed in Japan @NSK Ltd. 2019
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.
Management Principles
1
To provide our customers with
innovative and responsive
solutions through our world
leading technologies.
2
3
4
5
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.
Mission
Statement
Action Guidelines
Beyond Limits, Beyond Today
Beyond Frontiers
Beyond Individuals
Beyond Imagination
Beyond Perceptions
Challenging the Future
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.
CONTENTS
NSK’s Value Creation Process
NSK’s Business …………………………………… 02
History of NSK’s Overseas Expansion ………… 04
To Our Stakeholders ……………………………… 06
NSK’s Value Creation Model …………………… 12
NSK’s Business Activities and Corporate Value
Creation (Deepening of Value Chain)…………… 14
Financial and Non-Financial Highlights ……… 16
Sustainable Growth Strategies
Looking Back on Past Mid-Term
Management Plans ……………………………… 20
Toward 2026
The 6th Mid-Term Management Plan
“New Initiatives Targeting Growth”…………… 30
Financial Strategy / Policy on Shareholder
Human Resource Management ……………… 50
Supply Chain Management …………………… 52
Compliance ……………………………………… 53
Returns ……………………………………………… 32
Creating Value with Stakeholders ……………… 34
Risk Management ………………………………… 36
Corporate Governance ………………………… 54
Interview with NSK’s Outside Directors ……… 58
Management ……………………………………… 62
Activity Report (Actual and Forecast)
Data Section
Business Activities Report
Industrial Machinery Business ……………… 38
Automotive Business …………………………… 40
Core Technologies and Taking Up the Challenge
of Creating New Value
Consolidated Financial Statements …………… 64
Management’s Discussion and Analysis of
Financial Position, Results of Operations and
Cash Flows ………………………………………… 68
Basic Knowledge of Bearings …………………… 70
(The 6th Mid-Term Management Plan)………… 22
CSR/ESG Management…………………………… 24
Four Core Technologies + 1 …………………… 42
Establishment of the Needle Development Center …… 43
Glossary …………………………………………… 72
NSK Group ………………………………………… 74
New Initiatives Targeting Growth
Industrial Machinery Business
Global Business Foundation …………………… 44
Information for Investors / Company Data …… 76
Initiatives to Strengthen CSR/ESG Management
Third-Party Assurances ………………………… 77
Message from Top Management……………… 26
Environmental Management ………………… 46
Automotive Business
Safety Management …………………………… 48
Message from Top Management……………… 28
Quality Management …………………………… 49
NSK’s Value Creation Story
Vision
We formulated NSK Vision 2026 to mark
the 100th anniversary of our foundation
in 2016, aiming to create new value over
the next decade.
NSK’s Value Created
Customers
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
Employees
Contribution to an advanced technological society
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Local
Communities
Future
Generations
Suppliers
Shareholders
and
Investors
NSK’s Seven Key SDGs
Promote ESG Management
Placing “safety,” “quality,”
“compliance,” and “environment”
as core values, NSK will help find
solutions to social issues by
realizing value co-creation as it
meets the expectations of
stakeholders.
The Company launched its 6th
Mid-Term Management Plan for
the three years beginning in April
2019 in order to achieve its vision for
2026: “Establish a corporate foundation
for sustainable growth.” NSK will build its
business base and strengthen resources to
reach the next growth phase.
Over the 100 years since its
foundation in 1916, NSK has taken
on the challenge of developing
innovative technologies as Japan’s
first bearing manufacturer and
has supported the development
of industries worldwide while
contributing to the reduction of
energy loss.
（Year ended March 31, 2019）
Sales: ¥991.4 billion
Industrial Machinery Business (27％)
Automotive Business (70％)
Bearing sales (including
industrial/automotive)
No. 1 market share in Japan, No. 3 worldwide
Four Core Technologies + 1
Global Business Foundation
NSK’s Four Core Technologies are “tribology,” which
controls friction and wear; “materials,” which affects
product performance; “numerical simulation,” which is
indispensable for optimal product design and development;
and “mechatronics,” which realizes complex and minute
movement. In combination with “manufacturing
engineering,”̶upon which our Four Core Technologies take
shape̶we take on the challenge of creating new value.
NSK has 208 production sites, sales sites
and R&D centers in 30 countries and regions
around the world, all of which are managed by
six headquarters worldwide. Leveraging this
network, we work in close collaboration globally
while engaging in agile local-oriented
management.
Highly Evaluated by Outside Agencies (SRI/ESG)
NSK Report 2019 Editorial Policy
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 August 2019.
The NSK Report 2019 is designed to provide all stakeholders with a deeper
understanding of how the Company collaborates in the creation of value that meets the
expectations of the world over the medium to long term, and of the processes that will
achieve both social contribution and corporate development.
In the fiscal year under review, NSK launched its 6th Mid-Term Management Plan.
In NSK Report 2019, we explain, from both financial and non-financial perspectives, the
management issues and specific measures that we will tackle over the three years of the
Plan to realize NSK’s goal in 2026, the 110th anniversary of its foundation.
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 Sustainability
Report (formerly 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 2019 dated September 20th,
2019, 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, 2019. 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 2019
01
https://www.robecosam.
https://www.ftserussel
https://www.ftserussell.
com/csa/indices/
djsi-index-family.html
l.com/products/
indices/ftse4good
com/products/indices/
blossom-japan
http://vigeo-eiris.com/
https://www.issgoverna
nce.com/esg/ratings/
corporate-rating/
com/
https://www.sjnk-am.
OriginStrategySustainabilityValue BaseBusinesses 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.
Management Principles
1
To provide our customers with
innovative and responsive
solutions through our world
leading technologies.
2
To provide challenges and
opportunities to our employees,
utilizing their skills and
encouraging their creativity and
individuality.
3
To identify the needs of the
present and future, and to meet
these needs by being flexible,
agile, and dynamic.
4
5
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.
Mission
Statement
Action Guidelines
Beyond Limits, Beyond Today
Beyond Frontiers
Beyond Individuals
Beyond Imagination
Beyond Perceptions
Challenging the Future
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.
CONTENTS
NSK’s Value Creation Process
The 6th Mid-Term Management Plan
Human Resource Management ……………… 50
NSK’s Business …………………………………… 02
“New Initiatives Targeting Growth”…………… 30
Supply Chain Management …………………… 52
History of NSK’s Overseas Expansion ………… 04
Financial Strategy / Policy on Shareholder
Compliance ……………………………………… 53
To Our Stakeholders ……………………………… 06
Returns ……………………………………………… 32
Corporate Governance ………………………… 54
NSK’s Value Creation Model …………………… 12
Creating Value with Stakeholders ……………… 34
Interview with NSK’s Outside Directors ……… 58
NSK’s Business Activities and Corporate Value
Risk Management ………………………………… 36
Management ……………………………………… 62
Creation (Deepening of Value Chain)…………… 14
Financial and Non-Financial Highlights ……… 16
Activity Report (Actual and Forecast)
Data Section
Business Activities Report
Consolidated Financial Statements …………… 64
Sustainable Growth Strategies
Looking Back on Past Mid-Term
Industrial Machinery Business ……………… 38
Management’s Discussion and Analysis of
Automotive Business …………………………… 40
Financial Position, Results of Operations and
Management Plans ……………………………… 20
Core Technologies and Taking Up the Challenge
Cash Flows ………………………………………… 68
Toward 2026
of Creating New Value
Basic Knowledge of Bearings …………………… 70
(The 6th Mid-Term Management Plan)………… 22
Four Core Technologies + 1 …………………… 42
Glossary …………………………………………… 72
CSR/ESG Management…………………………… 24
Establishment of the Needle Development Center …… 43
NSK Group ………………………………………… 74
New Initiatives Targeting Growth
Industrial Machinery Business
Global Business Foundation …………………… 44
Information for Investors / Company Data …… 76
Initiatives to Strengthen CSR/ESG Management
Third-Party Assurances ………………………… 77
Message from Top Management……………… 26
Environmental Management ………………… 46
Automotive Business
Safety Management …………………………… 48
Message from Top Management……………… 28
Quality Management …………………………… 49
NSK’s Value Creation Story
Vision
We formulated NSK Vision 2026 to mark
the 100th anniversary of our foundation
in 2016, aiming to create new value over
the next decade.
NSK’s Value Created
Customers
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
Employees
Contribution to an advanced technological society
Realization of a more prosperous society
Suppliers
Local
Communities
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
NSK’s Seven Key SDGs
Over the 100 years since its
foundation in 1916, NSK has taken
on the challenge of developing
innovative technologies as Japan’s
first bearing manufacturer and
has supported the development
of industries worldwide while
contributing to the reduction of
energy loss.
（Year ended March 31, 2019）
Sales: ¥991.4 billion
Industrial Machinery Business (27％)
Automotive Business (70％)
Shareholders
and
Investors
Bearing sales (including
industrial/automotive)
No. 1 market share in Japan, No. 3 worldwide
Promote ESG Management
Placing “safety,” “quality,”
“compliance,” and “environment”
as core values, NSK will help find
solutions to social issues by
realizing value co-creation as it
meets the expectations of
stakeholders.
Future
Generations
The Company launched its 6th
Mid-Term Management Plan for
the three years beginning in April
2019 in order to achieve its vision for
2026: “Establish a corporate foundation
for sustainable growth.” NSK will build its
business base and strengthen resources to
reach the next growth phase.
Four Core Technologies + 1
NSK’s Four Core Technologies are “tribology,” which
controls friction and wear; “materials,” which affects
product performance; “numerical simulation,” which is
indispensable for optimal product design and development;
and “mechatronics,” which realizes complex and minute
movement. In combination with “manufacturing
engineering,”̶upon which our Four Core Technologies take
shape̶we take on the challenge of creating new value.
Global Business Foundation
NSK has 208 production sites, sales sites
and R&D centers in 30 countries and regions
around the world, all of which are managed by
six headquarters worldwide. Leveraging this
network, we work in close collaboration globally
while engaging in agile local-oriented
management.
Highly Evaluated by Outside Agencies (SRI/ESG)
NSK Report 2019 Editorial Policy
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 August 2019.
https://www.robecosam.
com/csa/indices/
djsi-index-family.html
https://www.ftserussel
l.com/products/
indices/ftse4good
https://www.ftserussell.
com/products/indices/
blossom-japan
http://vigeo-eiris.com/
https://www.issgoverna
nce.com/esg/ratings/
corporate-rating/
https://www.sjnk-am.
com/
The NSK Report 2019 is designed to provide all stakeholders with a deeper
understanding of how the Company collaborates in the creation of value that meets the
expectations of the world over the medium to long term, and of the processes that will
achieve both social contribution and corporate development.
In the fiscal year under review, NSK launched its 6th Mid-Term Management Plan.
In NSK Report 2019, we explain, from both financial and non-financial perspectives, the
management issues and specific measures that we will tackle over the three years of the
Plan to realize NSK’s goal in 2026, the 110th anniversary of its foundation.
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 Sustainability
Report (formerly 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 2019 dated September 20th,
2019, 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, 2019. 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 2019
01
OriginStrategySustainabilityValue BaseBusinesses NSK’s Value Creation Process
NSK’s Business
Industrial Machinery Business
The Industrial Machinery Business is involved in operations related to two product
categories, namely industrial machinery bearings and precision machinery and parts.
Industrial machinery bearings meet a wide range of demands in all industries and
come in a variety of types, ranging from miniature to extra-large size. On the other hand,
represented by linear motion products, such as ball screws and linear guides as well as
mechatronics products such as XY Tables and MEGATORQUE MOTORTM, precision
machinery products play key roles in machine tools and semiconductor/LCD production
equipment, which require precise positioning. Possessing thorough knowledge of
industrial characteristics, operating environments, and national/regional differences,
both businesses respond appropriately to a variety of needs.
Other 3%
Precision Machinery
and Parts 6%
Industrial Machinery
Bearings 21%
Other Asia
14%
China 20%
Europe 13%
(Year ended March 31,
2019)
Japan 37%
Sales
¥991.4 billion
Automotive
Components 35%
The Americas 16%
Automotive
Bearings 35%
Automotive Business
The Automotive Business is developing a wide range of important functional parts
that support the three critical elements of automobiles̶namely running, turning
and stopping̶in two businesses: automotive bearings and automotive components.
The automotive bearings business provides various types of bearings used in
automobiles, including hub unit bearings and needle bearings. The parts provided by
the automotive components business include those for automatic transmission (AT)
products, electric power steering (EPS) and ball screws for electric brakes.
Amid the accelerating innovation in automobile technologies, such as power
source diversification and autonomous driving, we are advancing the development of
new technologies and products, creating new value and making proposals.
NSK Products: Playing a Key Role in an Array of Industries
NSK Products: Supporting Automobile Running, Turning and Stopping
Wind
Turbines
Railways
Large spherical roller
bearings for wind
turbine main shaft
Integrated cylindrical
roller bearings
Axle tapered roller bearings
Home Appliances
Machine Tools
Long life ball bearings
Mining and Construction
Ball screws for
high-speed machine
tools HMS series
Steel
NSKHPSTM spherical
roller bearings
Sealed four-row
tapered roller bearings
Industrial Motors
Pumps and Compressors
High-speed integrated motor
spindle for machining centers
NSK Linear GuidesTM
roller guide RA series
New ceramic coated insulating bearings
for industrial motors
NSKHPSTM high load capacity
angular contact ball bearings
High load capacity deep
groove ball bearings
Industrial Robots
Semiconductor Production Equipment
Highly rigidity thin-section
angular contact ball bearings
NSK Linear GuidesTM
NH series, NS series
02
NSK REPORT 2019
Automotive Bearings
Running
Hub Unit Bearings
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.
Automotive Bearings / Automotive Components
Running
Transmission Products
In efficiently conveying engine power to the tires, NSK products are critical to
the transmissions that need to operate smoothly and with flexibility. We engage
in Four Core Technologies plus One, namely tribology, materials, numerical
simulation, mechatronics and manufacturing engineering, and offer products
that enhance the efficiency of transmissions, making them increasingly
compact and lightweight.
Double-row angular contact
ball bearings with inner and
outer mounting flange
(HUB III for driven wheels)
Needle roller bearings for
planetary gears (cage and
roller assembly), pinion shaft
Clutch assembly optimized
high efficiency
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 top share of ball
screw technology, will continue to contribute to
raising the level of safety in the brake field.
Ball screws for
electric brakes
Automotive Components
Automotive Bearings
Turning
Electric Power Steering (EPS)
Running
Bearings for Power Source/Electric 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
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
excellence. This is contributing to a broad product lineup and driving that is safe
field where an ever-more sophisticated level of technology is required.
and comfortable.
Column-type electric power steering
Rack-type electric power steering
Bearings for electric A/C compressors
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 2019
03
NSK’s Value Creation Process
NSK’s Business
Industrial Machinery Business
The Industrial Machinery Business is involved in operations related to two product
categories, namely industrial machinery bearings and precision machinery and parts.
Industrial machinery bearings meet a wide range of demands in all industries and
come in a variety of types, ranging from miniature to extra-large size. On the other hand,
represented by linear motion products, such as ball screws and linear guides as well as
mechatronics products such as XY Tables and MEGATORQUE MOTORTM, precision
machinery products play key roles in machine tools and semiconductor/LCD production
equipment, which require precise positioning. Possessing thorough knowledge of
industrial characteristics, operating environments, and national/regional differences,
both businesses respond appropriately to a variety of needs.
Other 3%
Precision Machinery
and Parts 6%
Industrial Machinery
Bearings 21%
Other Asia
14%
China 20%
Europe 13%
Wind
Turbines
Railways
Large spherical roller
bearings for wind
turbine main shaft
Integrated cylindrical
roller bearings
Axle tapered roller bearings
Home Appliances
Machine Tools
Long life ball bearings
Mining and Construction
Ball screws for
high-speed machine
tools HMS series
Steel
NSKHPSTM spherical
roller bearings
Sealed four-row
tapered roller bearings
Industrial Motors
Pumps and Compressors
High-speed integrated motor
spindle for machining centers
NSK Linear GuidesTM
roller guide RA series
New ceramic coated insulating bearings
for industrial motors
NSKHPSTM high load capacity
angular contact ball bearings
High load capacity deep
groove ball bearings
Industrial Robots
Semiconductor Production Equipment
Highly rigidity thin-section
angular contact ball bearings
NSK Linear GuidesTM
NH series, NS series
02
NSK REPORT 2019
Sales
(Year ended March 31,
2019)
¥991.4 billion
Automotive
Components 35%
Japan 37%
The Americas 16%
Automotive
Bearings 35%
Automotive Business
The Automotive Business is developing a wide range of important functional parts
that support the three critical elements of automobiles̶namely running, turning
and stopping̶in two businesses: automotive bearings and automotive components.
The automotive bearings business provides various types of bearings used in
automobiles, including hub unit bearings and needle bearings. The parts provided by
the automotive components business include those for automatic transmission (AT)
products, electric power steering (EPS) and ball screws for electric brakes.
Amid the accelerating innovation in automobile technologies, such as power
source diversification and autonomous driving, we are advancing the development of
new technologies and products, creating new value and making proposals.
NSK Products: Playing a Key Role in an Array of Industries
NSK Products: Supporting Automobile Running, Turning and Stopping
Automotive Bearings
Running
Hub Unit Bearings
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.
Automotive Bearings / Automotive Components
Running
Transmission Products
In efficiently conveying engine power to the tires, NSK products are critical to
the transmissions that need to operate smoothly and with flexibility. We engage
in Four Core Technologies plus One, namely tribology, materials, numerical
simulation, mechatronics and manufacturing engineering, and offer products
that enhance the efficiency of transmissions, making them increasingly
compact and lightweight.
Double-row angular contact
ball bearings with inner and
outer mounting flange
(HUB III for driven wheels)
Needle roller bearings for
planetary gears (cage and
roller assembly), pinion shaft
Clutch assembly optimized
high efficiency
Automotive Components
Ball Screws for Electric Brakes
Stopping
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 top share of ball
screw technology, will continue to contribute to
raising the level of safety in the brake field.
Ball screws for
electric brakes
Automotive Components
Automotive Bearings
Turning
Electric Power Steering (EPS)
Running
Bearings for Power Source/Electric 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.
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.
Column-type electric power steering
Rack-type electric power steering
Bearings for electric A/C compressors
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 2019
03
NSK’s Value Creation Process
History of NSK’s Overseas Expansion
Since its foundation in 1916 as the first bearing manufacturer in Japan, NSK has been facing the challenges of
developing innovative technologies while creating new value in a host of different forms. In previous issues of NSK
Report, we have showcased our history from a variety of angles, but this time we would like to focus on the history of
our overseas expansion.
With its mission statement guiding all to “contribute to a safer, smoother society,” “help protect the global
environment” and “work across national boundaries,” NSK is spreading its business activities, which are aimed at
contributing to society, around the world. The NSK Group currently operates from 208 business sites in 30 countries and
regions, and more than 20,400 of its 33,843 employees work overseas. The history of our overseas expansion has not
always proceeded smoothly, but rather than purely pursuing profits we have placed the highest priority on contributing
to the development of the countries and regions in which we operate while striving to remain a good corporate citizen.
After World War II to 1950s
Period of postwar reconstruction,
start of product exports
Economic
environment
NSK’s overseas
business
Start of bearing exports
● Having received permission from GHQ to resume private trading, exports started
Centered on bearings for automobile maintenance and repairs in Asian
countries and regions, such as India, Hong Kong, Taiwan, Thailand, etc.
● Started exports to Europe and the United States in 1958, expanded into U.S.
market through export sales and technical alliance with The Hoover Company
● Increased total export value of bearings (Japanese companies)
¥230,000 (1947) ¥34.0 million (1948)
¥248.0 million (1949) ¥423.0 million (1950)
1960s
1970s
Economic
environment
Structural change, from domestic capital expenditures to
export-driven growth, growth under the transition to
floating exchange rate system/ rising crude oil prices
NSK’s overseas
business
Start of overseas production and
acceleration of overseas business expansion
● Opened bearing plants and commenced operations at Geelong, Australia (1970),
Suzano, Brazil (1972), Clarinda in the United
States (1974), Peterlee in the United Kingdom
(1976)
● Built a sales structure and established local
subsidiaries in France, the United Kingdom, the
Netherlands, Italy and Singapore
Representative offices established in Vienna in
Austria, Valencia in Spain and Mexico City
● Established a manufacturing joint venture
company, Korea Precision Co., Ltd.
The Peterlee plant in the
United Kingdom being visited
by HRH Prince Charles.
Economic
environment
Period of high economic growth in Japan,
rapid expansion of bearing production/exports
1980s
NSK’s overseas
business
Establishment of overseas sales networks
commenced
● JAMCO Corporation, first local sales office, established in the state of New
Jersey, USA, followed by sales offices established in Germany, France, Australia
and Brazil, accelerate overseas sales (1962)
● Established representative offices in Johannesburg, Bangkok and London
(1966–1968)
● Following 1962 Japan-China Long-Term Comprehensive Trade Memorandum
and 1969 Japan-China Trade Pact Memorandum, begins exports to China
● Under “contributing to growth and development of developing countries” policy,
decides to strengthen exports of plant machinery
Japanese Bearing Production/Exports
Economic
environment
Strong yen appreciation, Japanese bubble economy,
Prominent Japanese customers, including automobile
and electrical equipment manufacturers, expand
entries into overseas markets
NSK’s overseas
business
Expansion of business structure in Europe and
the United States, full-scale business expansion in Asia
● Expanded overseas production capabilities mainly in Europe and the United
States against backdrop of trade friction of increasing severity
Number of Production Sites 1981 1990
North America 3 6 Europe 1 10
(including acquisition of UK-based UPI Group [RHP brand])
(1970)
(1960)
Production
¥41.6 billion ¥190.2 billion
Exports
¥2.7 billion
¥48.2 billion
Technical assistance contract signed
with Shriram Industrial Bearings, India (1965)
● Production of steel balls for bearings commenced
● In response to overseas expansion of customer companies in automotive sector, widen product lineup,
including hub unit bearings, steering columns and seat belts in the United States and Europe.
● Technology centers established in the United States and
the United Kingdom to strengthen technical services
● In Asian region, overseas subsidiaries established in
South Korea, Taiwan, Thailand
Changwon plant in South Korea commences production
Representative offices in India, Indonesia established
Technical Center (ATC) in the United States (1988)
Export of Plant Machinery and Licensing of Technology
1965
1967
The export of plant machinery and technical assistance were
characteristics of NSK’s overseas expansion from the 1960s to the 1970s.
Based on NSK production technology and quality that has evolved and
improved, the intention was to contribute to the economic development of
developing countries. The export of plant machinery and technical
assistance enhanced NSK’s overall technical capabilities, which served
as the foundation, and gave rise to a positive effect as the
industrialization of the partner country further increased the demand for
bearings. The local contributions made at this time led to the early
expansion into China in the 1990s and to M&A in Poland.
Technical assistance contract with Shriram Industrial Bearings, India
Contract to supply plant machinery to what was then Czechoslovakia
1968
1970
1970
1972
1975
Contract to supply plant machinery and provide technical
assistance to Pakistan-based corporation, RCD
Contract to supply plant machinery to Metalexport in Poland
Technical assistance contract with KBC of South Korea
Contract to supply plant machinery to Bulgaria
Supply of plant plant machinery to People’s Republic of China
Overseas M&A
As a pioneer among Japanese companies for overseas M&A, NSK acquired UPI, the largest bearing manufacturer in the United Kingdom,
known for its RHP brand, in 1990. This acquisition represented a major step toward becoming a market insider in Europe which was
regarded as a conservative market, and the globalization of the Group’s management. This move also led to the start of the ongoing IMC*
meetings, the establishment of the regional headquarters structure and the localization of overseas management.
Amid the expansion of European Union and the major pan-European trend, we acquired the formerly state-owned Polish bearing
manufacturer FLT Iskra in 1998. The company, to which NSK had previously exported plant machinery and thereafter had maintained the
relationship to supply spare parts, was mainly manufacturing small (normal diameter) ball bearings. This acquisition became an important
foundation for NSK to cement its position as the world No. 1 for ball bearings.
*IMC: International Management Committee meeting
04
NSK REPORT 2019
Expansion of Overseas Sites
1965: Number of Sales Sites ●: 4
Total NSK sites in 4 countries
1976: Number of Production Sites ●: 6
Total NSK sites in 14 countries
Number of Sites as of March 31, 2019
Number of sites
Number of countries and regions
(except Japan)
Japan 59 Overseas 149
29
For more details please turn to Global Business
Foundation on pp. 44–45
1990s
Economic
environment
Bursting of Japan’s bubble economy, entry into
low-growth period, end of Cold War, EU integration,
dawning of Asia period
NSK’s overseas
Optimized production by manufacturing in the best
location either at a demand site or export base,
business
overseas M&A, strengthening of global
management system
● Establishment/enhancement of production, sales and technical service
networks around the world
● Full-scale establishment of production bases in Asia region
Kunshan, Jiangsu province, China (1997), Jakarta, Indonesia (1995), Thailand
Steering columns (1996), Thailand Seat belts (1996), India Steering columns
(1997)
● Overseas M&A Acquisition of UPI and FLT Iskra
● Commencement of IMC*
● Appointed American as headquarters executive
officer (1996)
● Number of Overseas Sites (1999)
Europe
Production 13 Sales 10
The Americas Production 9 Sales 14
Asia
Production 9 Sales 22
Signing of UPI Group (UK)
acquisition (1990)
For more information on NSK’s history, please refer to or visit the following:
NSK Report 2018 pp. 2–3 NSK’s History of Creating Value
URL▶ https://www.nsk.com/investors/library/pdf/nsk_report/ir201803e.pdf
NSK Report 2017 pp. 2–3 The Pioneering Spirit that Has
Endured Throughout the 100 Years of NSK
URL▶ https://www.nsk.com/investors/library/pdf/nsk_report/ir201703e.pdf
NSK Report 2016 pp. 2–3 NSK’s Business Development History,
Depth of Overseas Production and Widespread Product Use
URL▶ https://www.nsk.com/investors/library/pdf/nsk_report/ir201603e.pdf
2000s
Economic
environment
Rapid growth in emerging countries and financial crisis
NSK’s overseas
business
Streamlining of Europe/Americas businesses and
strengthening of regional headquarters functions,
growth in Asia region, further rapid expansion of
China business
● Establishment of business, function and regional matrix
system and strengthening of regional headquarters functions,
key global position localization in Europe and the United States
● Streamlining of Europe/Americas businesses, production site
reorganization, optimization of numbers of employees
● Strengthening of growth fields and growth regions (electric
power steering plants newly established, establishment of
sales offices in Central and South America)
● China business: Expansion of production items, pursuit of
autonomous management system, enhancement of functions
of Chinese headquarters, establishment of R&D center
New headquarters offices and
technology center opening
ceremony in China (2009)
2003 Net sales ¥9.7 billion, number of employees 1,835, production sites 5
2010 Net sales ¥82.6 billion, number of employees 4,811, production sites 10
2010s
Economic
environment
Great East Japan Earthquake, increase
of environmental awareness, ESG management
NSK’s overseas
Pursuit of advances in overseas business
business
development
● Localization of regional headquarters’ top management
(The Americas, Europe, China, India)
● Establishment of overseas plants in accordance with new concept
・ China Hefei plant, where Kunshan plant plays role of mother plant (2012)
・ Mexico bearing plant following global team (United States, Brazil,
China, South Korea, Japan) and China/South Korea facilities (2014)
・ Cheonan plant in South Korea, where consideration given to
the environment, and employee working environments (2017)
● Promotion of human resource diversity
Global Human Resources (as of March 31, 2019)
The Americas: 3,164; Europe: 4,259; China: 7,660; Other Asia: 5,329
(Group employees, excluding Japan)
Mexico bearing plant (2014)
of which Asia region
of which Asia region
¥336.1
billion
¥168.3
billion
Overseas Sales
¥355.9 billion
2010
Overseas Sales
¥623.8 billion
2018
Overseas Sales
¥227.2 billion
2000
1,000
800
600
400
200
0
2018 (FY)
NSK REPORT 2019
05
Trends in NSK’s Domestic/Overseas Net Sales
Currently accounting for 63% of sales, overseas business has been the driving force behind
NSK’s growth since the 1990s.
■ Domestic ■ Overseas
of which Asia region
¥69.8
billion
Overseas Sales
¥117.4 billion
1990
Overseas Sales
¥27.1 billion
Overseas Sales
Overseas Sales
1980
¥0.3 billion
1960
¥9.4 billion
1970
1960
1970
1980
1990
2000
2010
NSK’s Value Creation Process
History of NSK’s Overseas Expansion
Since its foundation in 1916 as the first bearing manufacturer in Japan, NSK has been facing the challenges of
developing innovative technologies while creating new value in a host of different forms. In previous issues of NSK
Report, we have showcased our history from a variety of angles, but this time we would like to focus on the history of
our overseas expansion.
With its mission statement guiding all to “contribute to a safer, smoother society,” “help protect the global
environment” and “work across national boundaries,” NSK is spreading its business activities, which are aimed at
contributing to society, around the world. The NSK Group currently operates from 208 business sites in 30 countries and
regions, and more than 20,400 of its 33,843 employees work overseas. The history of our overseas expansion has not
always proceeded smoothly, but rather than purely pursuing profits we have placed the highest priority on contributing
to the development of the countries and regions in which we operate while striving to remain a good corporate citizen.
After World War II to 1950s
Economic
environment
Period of postwar reconstruction,
start of product exports
NSK’s overseas
business
Start of bearing exports
● Having received permission from GHQ to resume private trading, exports started
Centered on bearings for automobile maintenance and repairs in Asian
countries and regions, such as India, Hong Kong, Taiwan, Thailand, etc.
● Started exports to Europe and the United States in 1958, expanded into U.S.
market through export sales and technical alliance with The Hoover Company
● Increased total export value of bearings (Japanese companies)
¥230,000 (1947) ¥34.0 million (1948)
¥248.0 million (1949) ¥423.0 million (1950)
1960s
1970s
Economic
environment
Structural change, from domestic capital expenditures to
export-driven growth, growth under the transition to
floating exchange rate system/ rising crude oil prices
NSK’s overseas
Start of overseas production and
business
acceleration of overseas business expansion
● Opened bearing plants and commenced operations at Geelong, Australia (1970),
Suzano, Brazil (1972), Clarinda in the United
States (1974), Peterlee in the United Kingdom
(1976)
● Built a sales structure and established local
subsidiaries in France, the United Kingdom, the
Netherlands, Italy and Singapore
Representative offices established in Vienna in
Austria, Valencia in Spain and Mexico City
● Established a manufacturing joint venture
company, Korea Precision Co., Ltd.
The Peterlee plant in the
United Kingdom being visited
by HRH Prince Charles.
Economic
environment
Period of high economic growth in Japan,
rapid expansion of bearing production/exports
1980s
NSK’s overseas
Establishment of overseas sales networks
business
commenced
● JAMCO Corporation, first local sales office, established in the state of New
Jersey, USA, followed by sales offices established in Germany, France, Australia
and Brazil, accelerate overseas sales (1962)
● Established representative offices in Johannesburg, Bangkok and London
(1966–1968)
● Following 1962 Japan-China Long-Term Comprehensive Trade Memorandum
and 1969 Japan-China Trade Pact Memorandum, begins exports to China
● Under “contributing to growth and development of developing countries” policy,
decides to strengthen exports of plant machinery
Japanese Bearing Production/Exports
Economic
environment
Strong yen appreciation, Japanese bubble economy,
Prominent Japanese customers, including automobile
and electrical equipment manufacturers, expand
entries into overseas markets
NSK’s overseas
Expansion of business structure in Europe and
business
the United States, full-scale business expansion in Asia
● Expanded overseas production capabilities mainly in Europe and the United
States against backdrop of trade friction of increasing severity
Number of Production Sites 1981 1990
North America 3 6 Europe 1 10
(including acquisition of UK-based UPI Group [RHP brand])
Export of Plant Machinery and Licensing of Technology
The export of plant machinery and technical assistance were
characteristics of NSK’s overseas expansion from the 1960s to the 1970s.
Based on NSK production technology and quality that has evolved and
improved, the intention was to contribute to the economic development of
developing countries. The export of plant machinery and technical
assistance enhanced NSK’s overall technical capabilities, which served
as the foundation, and gave rise to a positive effect as the
industrialization of the partner country further increased the demand for
bearings. The local contributions made at this time led to the early
expansion into China in the 1990s and to M&A in Poland.
1965
1967
1968
1970
1970
1972
1975
Technical assistance contract with Shriram Industrial Bearings, India
Contract to supply plant machinery to what was then Czechoslovakia
Contract to supply plant machinery and provide technical
assistance to Pakistan-based corporation, RCD
Contract to supply plant machinery to Metalexport in Poland
Technical assistance contract with KBC of South Korea
Contract to supply plant machinery to Bulgaria
Supply of plant plant machinery to People’s Republic of China
Overseas M&A
As a pioneer among Japanese companies for overseas M&A, NSK acquired UPI, the largest bearing manufacturer in the United Kingdom,
known for its RHP brand, in 1990. This acquisition represented a major step toward becoming a market insider in Europe which was
regarded as a conservative market, and the globalization of the Group’s management. This move also led to the start of the ongoing IMC*
meetings, the establishment of the regional headquarters structure and the localization of overseas management.
Amid the expansion of European Union and the major pan-European trend, we acquired the formerly state-owned Polish bearing
manufacturer FLT Iskra in 1998. The company, to which NSK had previously exported plant machinery and thereafter had maintained the
relationship to supply spare parts, was mainly manufacturing small (normal diameter) ball bearings. This acquisition became an important
foundation for NSK to cement its position as the world No. 1 for ball bearings.
*IMC: International Management Committee meeting
04
NSK REPORT 2019
Expansion of Overseas Sites
1965: Number of Sales Sites ●: 4
Total NSK sites in 4 countries
1976: Number of Production Sites ●: 6
Total NSK sites in 14 countries
Number of Sites as of March 31, 2019
Number of sites
Number of countries and regions
(except Japan)
29
Japan 59 Overseas 149
For more details please turn to Global Business
Foundation on pp. 44–45
1990s
Economic
environment
Bursting of Japan’s bubble economy, entry into
low-growth period, end of Cold War, EU integration,
dawning of Asia period
NSK’s overseas
business
Optimized production by manufacturing in the best
location either at a demand site or export base,
overseas M&A, strengthening of global
management system
● Establishment/enhancement of production, sales and technical service
networks around the world
● Full-scale establishment of production bases in Asia region
Kunshan, Jiangsu province, China (1997), Jakarta, Indonesia (1995), Thailand
Steering columns (1996), Thailand Seat belts (1996), India Steering columns
(1997)
For more information on NSK’s history, please refer to or visit the following:
NSK Report 2018 pp. 2–3 NSK’s History of Creating Value
URL▶ https://www.nsk.com/investors/library/pdf/nsk_report/ir201803e.pdf
NSK Report 2017 pp. 2–3 The Pioneering Spirit that Has
Endured Throughout the 100 Years of NSK
URL▶ https://www.nsk.com/investors/library/pdf/nsk_report/ir201703e.pdf
NSK Report 2016 pp. 2–3 NSK’s Business Development History,
Depth of Overseas Production and Widespread Product Use
URL▶ https://www.nsk.com/investors/library/pdf/nsk_report/ir201603e.pdf
2000s
Economic
environment
Rapid growth in emerging countries and financial crisis
NSK’s overseas
business
Streamlining of Europe/Americas businesses and
strengthening of regional headquarters functions,
growth in Asia region, further rapid expansion of
China business
● Establishment of business, function and regional matrix
system and strengthening of regional headquarters functions,
key global position localization in Europe and the United States
● Streamlining of Europe/Americas businesses, production site
reorganization, optimization of numbers of employees
● Strengthening of growth fields and growth regions (electric
power steering plants newly established, establishment of
sales offices in Central and South America)
● China business: Expansion of production items, pursuit of
autonomous management system, enhancement of functions
of Chinese headquarters, establishment of R&D center
New headquarters offices and
technology center opening
ceremony in China (2009)
2003 Net sales ¥9.7 billion, number of employees 1,835, production sites 5
2010 Net sales ¥82.6 billion, number of employees 4,811, production sites 10
2010s
Economic
environment
Great East Japan Earthquake, increase
of environmental awareness, ESG management
NSK’s overseas
business
Pursuit of advances in overseas business
development
● Localization of regional headquarters’ top management
(The Americas, Europe, China, India)
● Establishment of overseas plants in accordance with new concept
・ China Hefei plant, where Kunshan plant plays role of mother plant (2012)
・ Mexico bearing plant following global team (United States, Brazil,
China, South Korea, Japan) and China/South Korea facilities (2014)
・ Cheonan plant in South Korea, where consideration given to
the environment, and employee working environments (2017)
● Promotion of human resource diversity
Mexico bearing plant (2014)
Signing of UPI Group (UK)
acquisition (1990)
Global Human Resources (as of March 31, 2019)
The Americas: 3,164; Europe: 4,259; China: 7,660; Other Asia: 5,329
(Group employees, excluding Japan)
of which Asia region
Trends in NSK’s Domestic/Overseas Net Sales
Currently accounting for 63% of sales, overseas business has been the driving force behind
NSK’s growth since the 1990s.
■ Domestic ■ Overseas
of which Asia region
¥69.8
billion
Overseas Sales
¥27.1 billion
1980
Overseas Sales
¥117.4 billion
1990
Overseas Sales
¥0.3 billion
1960
Overseas Sales
¥9.4 billion
1970
of which Asia region
¥336.1
billion
¥168.3
billion
Overseas Sales
¥227.2 billion
2000
Overseas Sales
¥355.9 billion
2010
Overseas Sales
¥623.8 billion
2018
1,000
800
600
400
200
1960
1970
1980
1990
2000
2010
0
2018 (FY)
NSK REPORT 2019
05
(1970)
(1960)
Production
Exports
¥41.6 billion ¥190.2 billion
¥2.7 billion
¥48.2 billion
Technical assistance contract signed
with Shriram Industrial Bearings, India (1965)
● Production of steel balls for bearings commenced
● In response to overseas expansion of customer companies in automotive sector, widen product lineup,
including hub unit bearings, steering columns and seat belts in the United States and Europe.
● Technology centers established in the United States and
the United Kingdom to strengthen technical services
● In Asian region, overseas subsidiaries established in
South Korea, Taiwan, Thailand
Changwon plant in South Korea commences production
Representative offices in India, Indonesia established
Technical Center (ATC) in the United States (1988)
● Overseas M&A Acquisition of UPI and FLT Iskra
● Commencement of IMC*
● Appointed American as headquarters executive
officer (1996)
● Number of Overseas Sites (1999)
Europe
Production 13 Sales 10
The Americas Production 9 Sales 14
Production 9 Sales 22
Asia
NSK’s Value Creation Process
To Our Stakeholders
06
NSK REPORT 2019
At NSK we will continue to
provide “value” through
collaborative creation with
all of our stakeholders,
by positioning social
development and NSK’s
growth on the same vector.
President and Chief Executive Officer
Looking Back on the 5th Mid-Term
Management Plan and Ahead to Our
Next Plan
Looking back over the three years of the 5th Mid-Term
Management Plan (MTP), the first year, 2016, saw many
defining events such as Brexit and the arrival of the
Trump administration. These two events led to changes
all over the world and continue to do so even now. China,
which had seen immense growth, made its presence
even clearer by announcing its “Belt and Road Initiative”
and “Made in China 2025.” The trade friction that arose
between the US and China drastically worsened the
business environment. At the same time, technological
innovation also accelerated. In the Automotive Business,
the Big Four Tech Companies (i.e. Google, Amazon,
Facebook, and Apple or “GAFA”), have arrived on the
scene, and a new business model, which adds
environmental awareness to the trends of CASE will
greatly alter technology in the future as well as the role
of automobiles in our society. In the Industrial
Machinery Business, to counter the declining labor force
in developed countries we have seen an evolution in
factory automation (FA) and labor-saving, supported by
technological advances such as Internet of Things (IoT)
technology, Artificial Intelligence (AI), robots, and 5G
communications. We have also seen an increase of
investment aiming for the urbanization of developing
countries, as well as advancement of environmental
countermeasures spurring on electrification.
Looking at NSK’s business results, amid strong
demand in 2017, the second year of the MTP, we
managed to achieve our goal of one trillion yen in sales
one year early by focusing on maximizing our output. We
also set a new record high for operating income and net
income. However, in the final year, the effect of the
US-China trade friction became apparent, and we saw a
worsening environment for the Industrial Machinery
Business and Automotive Business. There were
decreases in sales and profits, and the final year of the
plan ended in a year-on-year decrease in our
consolidated business results.
A future issue based on reviewing the 5th MTP is the
regeneration of the steering business. In next-generation
product development, we have now achieved the
technical performance levels we targeted, and we will
secure official orders as soon as possible to ensure our
re-growth scenario. Although we made significant
investment in automotive bearings, the fixed cost burden
is somewhat large amid the current situation where
global automobile production is at a standstill. Although
the market is expected to grow in the mid- to long-term,
we aim to establish a lean cost structure while paying
close attention to the current trends in the vehicle
production numbers. There was a very strong demand in
the Industrial Machinery Business from early 2017. We
put all our efforts into securing output to maximize our
sales opportunities. Although these efforts resulted in a
significant increase in sales and profits, our production
capacity could not keep up with the increase in demand,
which led to a reliance on extra staff to meet production
output. After identifying mid- to long-term trends in
demand during the 6th MTP, we will aim to optimize the
business structure, including our sector and customer
portfolio with an emphasis on growth fields, and
organization of production capacity. In addition, while
NSK as a whole has been continuously working to
improve operational efficiency and systematization, it is
necessary to further prepare for the new era of AI.
Based on these reflections and issues, the 6th MTP,
which was established in line with vision for 2026,
marking the 110th anniversary of NSK’s founding, is
now being continuously pursued by the two pillars set
forth in the 5th MTP. We will further evolve NSK by
strengthening our competitiveness through “Operational
Excellence” and continuing our policy of investing for the
future through “Challenging Innovation.” Positioning
these three years as a period of strengthening our
business base and resources for the next growth phase,
our focus is on measures in the short-term to achieve
“new initiatives targeting growth,” to “enhance
managerial resources,” and to “contribute to the
environment and society.”
The business and management environments are
very uncertain and unpredictable at the moment. Not
only is the conventional autonomous cycle of the
economy changing, but political trends which have a
major impact on the economy are also altering the
current situation. In such an environment, expressing
goals in absolute terms of sales and profits can serve to
mislead markets, and it would be irresponsible of us to
do so. A key focus NSK set for 2026 is to establish a
corporate foundation for sustainable growth. This does
not mean simply seeking sustainable growth itself, but
rather achieving growth while reducing the burden on
society as a whole, as well as on employees and
suppliers. This is what I mean when we use the word
“sustainable.” Sustainability is formed by the strength of
managerial resources such as people, technical
capabilities, organizational structure, and the
information that flows within this structure. Without this,
businesses cannot grow or produce profitability. We will
work to strengthen our managerial resources with a
heightened awareness of “sustainable” perspective. It is
important that in the 6th MTP we show the extent that
NSK will increase its market position and profitability,
and how much we will return to shareholders in the
context of overall economic growth and compared with
our competitors. We must then make efforts to produce
results in line with this.
CASE
6th MTP
P. 31
PP. 22-23
NSK REPORT 2019
07
Mid- to Long-Term Risks to NSK
and Countermeasures
Amid the current rapidly changing global situation,
looking at NSK’s current business scale and regional
portfolio, the weight of China stands out. This is the
result of our success in leveraging the high growth of
the Chinese economy, but at the same time it is also
becoming important that we manage country risk
soundly. In response to this, NSK has been focusing on
internalization in China for the past 10 years. Internally,
we have localized the top management of business
divisions and those responsible for functional divisions,
and from an external perspective, we invited Chinese
corporate management experts and university
professors to serve on an advisory board. With this, we
have incorporated views and opinions on society, politics
and the economy that are not bound by the boundaries
of companies and industries. Ultimately, we will aim for
a system in which our Chinese operations are fully run
by Chinese personnel.
We will also work to further improve our presence
in regions other than China. ASEAN is a region with
many Japanese companies as well as strong political
and economic connections. Another strategically critical
region is Europe. Europe is an important region because
it has very unique production facilities and industrial
machinery, as it focuses on the machine field and
machine parts. I would like to take steps to improve our
presence in Europe.
The second relates to automobiles, where EV and
autonomous driving stand at the forefront of
technological innovation, as well as the expanding area
of carsharing. The number of electric-powered vehicles
such as EVs and HEVs is sure to increase over the mid-
to long-term. For pure EVs, which do not contain an
internal combustion engine, the number of bearings
used per unit will likely decrease. On the other hand,
demand for in-vehicle motors will expand dramatically
in the continuing pursuit of safety, comfort, and
convenience. As the use of bearings will become more
sophisticated and performance requirements will
increase, 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 for
improving EV functionality that incorporate NSK’s core
technology. With products that make use of NSK’s
strengths, we will connect new needs generated by
technological innovation to business opportunities.
In addition, if society changes in such a way that car
sharing becomes the norm, then the scale of the
automobile industry will be greatly affected. We will see
a completely new way of mobility in cities, and everyone
will share cars with simple mechanisms such as EVs.
On the other hand, when it comes to long-distance
travel, drivers will want a car that they enjoy driving, and
one that is functional as well as appealing. In other
words, we may see the market diverge. NSK must take
advantage of having contact points with customers in all
directions and proceed with technological development
and technical proposals while fully understanding how
the automotive industry is changing. The risk is with our
relationship with players in the automotive industry,
such as GAFA, Uber, Didi Chuxing, which are
strengthening their position in automotive circles. We
must think about how we can consciously form points of
contact with these companies. Looking at the current
world of cyber technologies, which are becoming ever
more sophisticated with the evolution of IoT, AI, and 5G
communication, if these technologies become the
defining factors, then I believe this could be a weakness
in NSK’s business. However, in order to realize the
merits of cyber technology, the importance of physical
parts and their motion will no doubt come under the
spotlight. NSK’s core technology is used to give things
efficient and effective motion. Regardless of how good
the information and data are, if the mechanism of the
object that moves in response to the signal is remiss,
the level of satisfaction obtained from it will be low.
Rather than simply seeing this as a risk, from the
perspective of how to utilize various information and
data for movement, and how to make the movement
more satisfying, I think there is value in developing and
refining NSK’s core technology once again.
Looking at the competitive environment, Chinese
manufacturers have gone from strength to strength,
and Japanese companies as well as Western companies
in China have begun making use of such manufacturers.
The challenge for NSK, a company that is highly
regarded for its outstanding functionality and high
quality, will be a tough one. However, even if Chinese
manufacturers’ product quality improves, there is still a
large difference in terms of the accumulated analytical
power and expertise to derive causes and solutions
when problems occur in the market. NSK has the ability
to solve problems and provide technical proposals based
on the experience accumulated over our 103 years of
history. It will be difficult for competitors to emulate this.
On the other hand, NSK also has a chance to work and
partner with these companies.
Finally, the risk of a shrinking workforce due to the
declining birthrate and aging population will be
particularly noticeable in Japan and China. Even if there
are workers, there will be fewer people willing to work in
the machine component manufacturing industry. The
key within the next five to ten years will be our ability to
create production facilities, production processes and
plants that do not rely on people. In the 5th MTP, we
technology such as AI and IoT, we can raise expectations
worked on introducing NSK’s Smart Factories, and set
for NSK as the industry undergoes rapid technological
up model lines for both small-lot large variety
changes.
large-sized bearings, and mass-produced small-sized
bearings. In the future, we intend to work on developing
Under Vision 2026, which we established on the
these lines into 2nd and 3rd generations, expand the
occasion of our 100th anniversary, we declared our
number of lines this technology is used in, and expand
intent to set the future in motion. Looking back on the
this technology overseas.
100-year history of NSK, I believe we have undertaken
many ambitious initiatives and challenges in the past. In
becoming the first company to manufacture bearings in
Japan, we overcame one challenge after another.
Additionally, in the post-war economic development of
Japan, for example, we gave rise to a new era in motion
by developing bearings for the Shinkansen, which need
to withstand operating at speeds of over 300 km per
hour and bearings for VTRs requiring smooth rotation to
the utmost limit.
However, over the past 30 years or so, we have
become passive in our approach, and have not tried to
actively drive change. We need to have a strong
awareness of our new role in providing comprehensive
solutions that utilize Motion & ControlTM, the concept of
our business, to society.
As the speed of technological evolution accelerates,
we need to challenge ourselves in new fields with
innovative ideas, ask ourselves whether we can form
these ideas into a product, and speed up this process.
To that end, we are creating and working on a
development organization for new business areas that is
not bound by existing frameworks. In this context, we
value the attitude of challenging everything. In “NSK: 100
Years of Progress” published earlier this year, there is a
story from 1961, when NSK’s Fujisawa Technology
Center was established. The Company used the motto “It
doesn’t matter if you strike out. Challenge the unknown
without fear of failure.” to encourage the development of
new products. We need to reestablish this spirit and
tackle a range of new challenges. In terms of NSK’s
management stance, I believe we need to encourage
employees to step into the batter box, and not get angry
or be critical even if they “strike out.”
NSK’s Strengths
and Their Further Evolution
One of NSK’s strengths lies in its intangible assets–in
particular its people. The quality of our people will be
essential in order to respond to requests from
customers and the market. Not only in Japan, but also
in Europe, the United States, and China, people working
under the NSK brand are serious and are particular
about monozukuri. I know our employees take pride in
working for a world-leading manufacturer. Another
strength is our strong relationships with business
partners, such as customers, suppliers and distributors.
It is this relationship of trust that allows us to embark
on new challenges together in addition to profit-driven
initiatives such as cost or pricing. I think that this has
been cultivated across our history of more than 100
years.
NSK’s intellectual property: “Four Core
Technologies plus One.” We have added manufacturing
engineering to tribology, materials, numerical
simulation, and mechatronics, and position these as
NSK’s technical foundation. Our strengths lie in our
accumulated expertise in precision grinding and
assembly, heat treatment and other technologies. In
mechatronics technology, over the last 20 years we have
accumulated electronics technology and ECU software
design technology via our electric power steering
business.
Tribology is a technology that controls friction and
wear, but friction itself is a complex topic. Chinese
automakers are very skilled at manufacturing EVs, and
have put great efforts into this area. The management of
such automakers told me that looking ahead, they must
now look at how to deal with friction, which is something
they had not regarded up until now. It is necessary to
reduce or control friction as much as possible for EVs
too. If we can refine our core technologies and integrate
systems that take advantage of needed digital
NSK’s Stance on ESG
NSK has put “protection of the global environment
through Motion & ControlTM” as part of its mission
statement, and has released many environmentally
friendly products that make full use of Four Core
Technologies plus One. On the other hand, natural
disasters caused by climate change are a frequent
occurrence across the world, and air, soil, and water
pollution problems are becoming more serious.
Environmental issues such as CO2 emissions and plastic
waste are also being put in the spotlight more and more.
Various regulations to ensure global environmental
conservation have been strengthened, and societal
demands that encourage companies to expand their
environmental efforts are increasing. Starting this year,
NSK has set the environment as a core value in addition
to safety, quality and compliance. In addition to
contributions through our products, we are also
implementing concrete measures to reduce the amount
of CO2 emissions caused by our manufacturing. Up until
now, we have focused on reducing the emissions per
production unit, but we have also declared that we will
work to reduce the absolute amount, and our goal is to
reduce current emissions by 60% by 2050. If we focus on
contributing to social value in the future, there will be
many areas that will incur costs. It is necessary to
prioritize such decisions from the top down, and to
proceed with a sense of urgency. Therefore, the
organizations responsible for environmental measures
are now under the direct control of the president.
Since 2014, we have been conducting an awareness
survey of our people–our most important assets–in
particular surveying the level of employee satisfaction.
Originally, it started as a compliance awareness survey,
but now the focus has shifted to employee engagement.
We aim to listen to the frank opinions of employees,
understand their awareness of our Mission Statement
and how much they empathize with Vision 2026. The
results of the survey are not only compared with
previous years, but also between organizations and job
types, as well as other group companies. For groups
that are found to have a large gap from where they want
to be or from the average, we will firstly work to improve
the quality and amount of communication, in
conjunction with the head of the organization. In
addition, we believe that understanding the actual
conditions and direction of the Company is what
underpins employee satisfaction, so we have increased
the number of opportunities to explain the MTP and
business results to employees. We obviously take safety
very seriously too. A place where employees can work
safely and with peace of mind is an important foundation.
We are also promoting diversity and inclusion.
Empowering women is one topic at the forefront of
current management issues. One of our KPIs is to
increase the ratio of female managers and candidates.
We are continuing to implement measures such as
training to achieve this, and we do not make adjustments
simply to meet our targets. It is critical that we provide
support for balancing work with childcare and nursing
care. Particularly when looking at the distribution of
our employees’ ages, we see that family care is an
issue that cannot be overlooked. We will provide
necessary support and measures so that employees
can continue working while being in a position to
provide nursing care. Furthermore, we live in an age
where acceptance of members of the LGBT (SOGI)
community at workplaces overseas is commonplace.
As a global company, NSK must work to catch up and
work on developing our awareness, culture, and
environment to be more accepting of diverse members
of society in Japan too. We will tackle the issues one by
one, such as those disadvantaged in the past by not
being aware of welfare systems and workplace
facilities. Moving on to persons with disabilities, further
innovation is necessary to provide more compatible
workplaces.
I believe that our level of governance has reached a
certain level of functionality under the Company with
Three Committees framework. We conduct evaluations
to check whether our Board of Directors is functioning
properly. To enhance the effectiveness of the Board of
Directors, a panel of external experts has conducted a
Board of Directors evaluation since 2015. In the 2018
results, we received an evaluation stating that the Board
of Directors had maintained a high level of effectiveness.
We have also made proactive efforts to respond to
Japan’s Corporate Governance Code. In the future I
employees have to recognize the company president as
think it is necessary to consider forming a Board of
a person. For example, a mere slogan such as that of
Directors with a majority of outside directors and
NSK’s core values, “Safety, Quality, Compliance,
changing the chairperson of the Board of Directors to a
Environment,” or Setting the Future in Motion as part of
non-executive director or an outside director. What is
Vision 2026, is not enough to keep a large organization
more important than the format is how we go about
like NSK going–the president needs to convey the
building a healthy and cooperative relationship between
thoughts and feelings behind it. It is important to listen
outside directors and internal directors. Lately outside
intently to the opinions of those who cannot honestly
directors have actively participated in site visits and
agree with your idea or direction, and to address these
executive meetings, and employees are more aware of
sincerely. However in reality, when you try doing this you
the presence of outside directors at NSK. This has led to
might find you cannot arrive at an answer immediately
the establishment of business plans and management
and are at a loss on how to react. Despite these
that take into account the presence of outside directors.
concerns, I believe it is important to step forward and
For example, we are building a framework for
engage in dialog. Even if I have to admit that I was wrong
accountability to aid directors with regard to matters
or that something I said was a mistake, I still think this
such as budget fidelity and operational risk
would be a good opportunity to show that it is okay to
management. I think it is very important to manage from
make mistakes. Also, as the president, I have the
the perspective of stakeholders, especially shareholders
opportunity to communicate with a range of people
and investors, rather than inward-looking discussion
outside of NSK. I think that it is the president’s
based on ways of thinking ingrained in our own company
responsibility to bring back the information and hints
or industry.
that I have obtained and share these within the
company–in other words, to strengthen the connection
between the outside and inside.
Toward Sustainable Development
We have begun our 6th MTP. As a stepping stone to our
2026 Vision, we decided to create the plan based on the
changes likely to occur in society from a mid- to
long-term perspective and aim to establish a corporate
foundation that will enable sustainable growth. We will
set the next three years as a period of strengthening our
business base, under the two key policies of Operational
Excellence (constant pursuit of competitiveness) and
Challenging Innovation (creation of new value), focusing
on the three measures I outlined previously.
Right now there are numerous various social issues
around the world that need to be resolved. Furthermore
we are seeing major technological innovations with
digitization, AI, and CASE at the forefront. At NSK we
contribute to “sustainable” development of society by
providing “value” through collaborative creation with all
of our stakeholders, and positioning social development
and NSK’s growth on the same vector.
We thank you for your continuing support.
Role of a Company President
It is the president’s role to set the direction of the
company, to determine strategies and plans as well as
their execution, and to take responsibility for the results
of these actions. There are no limits to the scope of
duties. The president needs to be the ultimate decision
maker for everything in the company and take full
responsibility for the results. There is no clear boundary
showing where a president’s responsibilities fall. I have
been the president of NSK for four years. As time goes
on, I feel the weight of my responsibility more and more.
One matter I find myself thinking a lot lately is the
importance of making my presence known both inside
and outside NSK. In a sense, I think that a company
president is a symbolic figure. Being the president is no
longer about sitting in the president’s office and giving
orders. I believe it is necessary to be on the shop floor
with everyone engaged in business, production, sales,
and design and development. It is important to show
everyone what the head of NSK looks like and what he
believes. In other words, to give the name a meaning,
NSK’s Value Creation Process
To Our Stakeholders
06
NSK REPORT 2019
At NSK we will continue to
provide “value” through
collaborative creation with
all of our stakeholders,
by positioning social
development and NSK’s
growth on the same vector.
President and Chief Executive Officer
Looking Back on the 5th Mid-Term
Management Plan and Ahead to Our
Next Plan
Looking back over the three years of the 5th Mid-Term
Management Plan (MTP), the first year, 2016, saw many
defining events such as Brexit and the arrival of the
Trump administration. These two events led to changes
all over the world and continue to do so even now. China,
which had seen immense growth, made its presence
even clearer by announcing its “Belt and Road Initiative”
and “Made in China 2025.” The trade friction that arose
between the US and China drastically worsened the
business environment. At the same time, technological
innovation also accelerated. In the Automotive Business,
the Big Four Tech Companies (i.e. Google, Amazon,
Facebook, and Apple or “GAFA”), have arrived on the
scene, and a new business model, which adds
environmental awareness to the trends of CASE will
greatly alter technology in the future as well as the role
of automobiles in our society. In the Industrial
Machinery Business, to counter the declining labor force
in developed countries we have seen an evolution in
factory automation (FA) and labor-saving, supported by
technological advances such as Internet of Things (IoT)
technology, Artificial Intelligence (AI), robots, and 5G
communications. We have also seen an increase of
investment aiming for the urbanization of developing
countries, as well as advancement of environmental
countermeasures spurring on electrification.
Looking at NSK’s business results, amid strong
demand in 2017, the second year of the MTP, we
managed to achieve our goal of one trillion yen in sales
one year early by focusing on maximizing our output. We
also set a new record high for operating income and net
income. However, in the final year, the effect of the
US-China trade friction became apparent, and we saw a
worsening environment for the Industrial Machinery
Business and Automotive Business. There were
decreases in sales and profits, and the final year of the
plan ended in a year-on-year decrease in our
consolidated business results.
A future issue based on reviewing the 5th MTP is the
regeneration of the steering business. In next-generation
product development, we have now achieved the
technical performance levels we targeted, and we will
secure official orders as soon as possible to ensure our
re-growth scenario. Although we made significant
investment in automotive bearings, the fixed cost burden
is somewhat large amid the current situation where
global automobile production is at a standstill. Although
the market is expected to grow in the mid- to long-term,
we aim to establish a lean cost structure while paying
close attention to the current trends in the vehicle
production numbers. There was a very strong demand in
the Industrial Machinery Business from early 2017. We
put all our efforts into securing output to maximize our
sales opportunities. Although these efforts resulted in a
significant increase in sales and profits, our production
capacity could not keep up with the increase in demand,
which led to a reliance on extra staff to meet production
output. After identifying mid- to long-term trends in
demand during the 6th MTP, we will aim to optimize the
business structure, including our sector and customer
portfolio with an emphasis on growth fields, and
organization of production capacity. In addition, while
NSK as a whole has been continuously working to
improve operational efficiency and systematization, it is
necessary to further prepare for the new era of AI.
Based on these reflections and issues, the 6th MTP,
which was established in line with vision for 2026,
marking the 110th anniversary of NSK’s founding, is
now being continuously pursued by the two pillars set
forth in the 5th MTP. We will further evolve NSK by
strengthening our competitiveness through “Operational
Excellence” and continuing our policy of investing for the
future through “Challenging Innovation.” Positioning
these three years as a period of strengthening our
business base and resources for the next growth phase,
our focus is on measures in the short-term to achieve
“new initiatives targeting growth,” to “enhance
managerial resources,” and to “contribute to the
environment and society.”
The business and management environments are
very uncertain and unpredictable at the moment. Not
only is the conventional autonomous cycle of the
economy changing, but political trends which have a
major impact on the economy are also altering the
current situation. In such an environment, expressing
goals in absolute terms of sales and profits can serve to
mislead markets, and it would be irresponsible of us to
do so. A key focus NSK set for 2026 is to establish a
corporate foundation for sustainable growth. This does
not mean simply seeking sustainable growth itself, but
rather achieving growth while reducing the burden on
society as a whole, as well as on employees and
suppliers. This is what I mean when we use the word
“sustainable.” Sustainability is formed by the strength of
managerial resources such as people, technical
capabilities, organizational structure, and the
information that flows within this structure. Without this,
businesses cannot grow or produce profitability. We will
work to strengthen our managerial resources with a
heightened awareness of “sustainable” perspective. It is
important that in the 6th MTP we show the extent that
NSK will increase its market position and profitability,
and how much we will return to shareholders in the
context of overall economic growth and compared with
our competitors. We must then make efforts to produce
results in line with this.
CASE
6th MTP
P. 31
PP. 22-23
NSK REPORT 2019
07
Mid- to Long-Term Risks to NSK
and Countermeasures
Amid the current rapidly changing global situation,
looking at NSK’s current business scale and regional
portfolio, the weight of China stands out. This is the
result of our success in leveraging the high growth of
the Chinese economy, but at the same time it is also
becoming important that we manage country risk
soundly. In response to this, NSK has been focusing on
internalization in China for the past 10 years. Internally,
we have localized the top management of business
divisions and those responsible for functional divisions,
and from an external perspective, we invited Chinese
corporate management experts and university
professors to serve on an advisory board. With this, we
have incorporated views and opinions on society, politics
and the economy that are not bound by the boundaries
of companies and industries. Ultimately, we will aim for
a system in which our Chinese operations are fully run
by Chinese personnel.
We will also work to further improve our presence
in regions other than China. ASEAN is a region with
many Japanese companies as well as strong political
and economic connections. Another strategically critical
region is Europe. Europe is an important region because
it has very unique production facilities and industrial
machinery, as it focuses on the machine field and
machine parts. I would like to take steps to improve our
presence in Europe.
The second relates to automobiles, where EV and
autonomous driving stand at the forefront of
technological innovation, as well as the expanding area
of carsharing. The number of electric-powered vehicles
such as EVs and HEVs is sure to increase over the mid-
to long-term. For pure EVs, which do not contain an
internal combustion engine, the number of bearings
used per unit will likely decrease. On the other hand,
demand for in-vehicle motors will expand dramatically
in the continuing pursuit of safety, comfort, and
convenience. As the use of bearings will become more
sophisticated and performance requirements will
increase, 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 for
improving EV functionality that incorporate NSK’s core
technology. With products that make use of NSK’s
strengths, we will connect new needs generated by
technological innovation to business opportunities.
In addition, if society changes in such a way that car
sharing becomes the norm, then the scale of the
automobile industry will be greatly affected. We will see
a completely new way of mobility in cities, and everyone
will share cars with simple mechanisms such as EVs.
On the other hand, when it comes to long-distance
travel, drivers will want a car that they enjoy driving, and
one that is functional as well as appealing. In other
words, we may see the market diverge. NSK must take
advantage of having contact points with customers in all
directions and proceed with technological development
and technical proposals while fully understanding how
the automotive industry is changing. The risk is with our
relationship with players in the automotive industry,
such as GAFA, Uber, Didi Chuxing, which are
strengthening their position in automotive circles. We
must think about how we can consciously form points of
contact with these companies. Looking at the current
world of cyber technologies, which are becoming ever
more sophisticated with the evolution of IoT, AI, and 5G
communication, if these technologies become the
defining factors, then I believe this could be a weakness
in NSK’s business. However, in order to realize the
merits of cyber technology, the importance of physical
parts and their motion will no doubt come under the
spotlight. NSK’s core technology is used to give things
efficient and effective motion. Regardless of how good
the information and data are, if the mechanism of the
object that moves in response to the signal is remiss,
the level of satisfaction obtained from it will be low.
Rather than simply seeing this as a risk, from the
perspective of how to utilize various information and
data for movement, and how to make the movement
more satisfying, I think there is value in developing and
refining NSK’s core technology once again.
Looking at the competitive environment, Chinese
manufacturers have gone from strength to strength,
and Japanese companies as well as Western companies
in China have begun making use of such manufacturers.
The challenge for NSK, a company that is highly
regarded for its outstanding functionality and high
quality, will be a tough one. However, even if Chinese
manufacturers’ product quality improves, there is still a
large difference in terms of the accumulated analytical
power and expertise to derive causes and solutions
when problems occur in the market. NSK has the ability
to solve problems and provide technical proposals based
on the experience accumulated over our 103 years of
history. It will be difficult for competitors to emulate this.
On the other hand, NSK also has a chance to work and
partner with these companies.
Finally, the risk of a shrinking workforce due to the
declining birthrate and aging population will be
particularly noticeable in Japan and China. Even if there
are workers, there will be fewer people willing to work in
the machine component manufacturing industry. The
key within the next five to ten years will be our ability to
create production facilities, production processes and
plants that do not rely on people. In the 5th MTP, we
technology such as AI and IoT, we can raise expectations
worked on introducing NSK’s Smart Factories, and set
for NSK as the industry undergoes rapid technological
up model lines for both small-lot large variety
changes.
large-sized bearings, and mass-produced small-sized
bearings. In the future, we intend to work on developing
Under Vision 2026, which we established on the
these lines into 2nd and 3rd generations, expand the
occasion of our 100th anniversary, we declared our
number of lines this technology is used in, and expand
intent to set the future in motion. Looking back on the
this technology overseas.
100-year history of NSK, I believe we have undertaken
many ambitious initiatives and challenges in the past. In
becoming the first company to manufacture bearings in
Japan, we overcame one challenge after another.
Additionally, in the post-war economic development of
Japan, for example, we gave rise to a new era in motion
by developing bearings for the Shinkansen, which need
to withstand operating at speeds of over 300 km per
hour and bearings for VTRs requiring smooth rotation to
the utmost limit.
However, over the past 30 years or so, we have
become passive in our approach, and have not tried to
actively drive change. We need to have a strong
awareness of our new role in providing comprehensive
solutions that utilize Motion & ControlTM, the concept of
our business, to society.
As the speed of technological evolution accelerates,
we need to challenge ourselves in new fields with
innovative ideas, ask ourselves whether we can form
these ideas into a product, and speed up this process.
To that end, we are creating and working on a
development organization for new business areas that is
not bound by existing frameworks. In this context, we
value the attitude of challenging everything. In “NSK: 100
Years of Progress” published earlier this year, there is a
story from 1961, when NSK’s Fujisawa Technology
Center was established. The Company used the motto “It
doesn’t matter if you strike out. Challenge the unknown
without fear of failure.” to encourage the development of
new products. We need to reestablish this spirit and
tackle a range of new challenges. In terms of NSK’s
management stance, I believe we need to encourage
employees to step into the batter box, and not get angry
or be critical even if they “strike out.”
NSK’s Strengths
and Their Further Evolution
One of NSK’s strengths lies in its intangible assets–in
particular its people. The quality of our people will be
essential in order to respond to requests from
customers and the market. Not only in Japan, but also
in Europe, the United States, and China, people working
under the NSK brand are serious and are particular
about monozukuri. I know our employees take pride in
working for a world-leading manufacturer. Another
strength is our strong relationships with business
partners, such as customers, suppliers and distributors.
It is this relationship of trust that allows us to embark
on new challenges together in addition to profit-driven
initiatives such as cost or pricing. I think that this has
been cultivated across our history of more than 100
years.
NSK’s intellectual property: “Four Core
Technologies plus One.” We have added manufacturing
engineering to tribology, materials, numerical
simulation, and mechatronics, and position these as
NSK’s technical foundation. Our strengths lie in our
accumulated expertise in precision grinding and
assembly, heat treatment and other technologies. In
mechatronics technology, over the last 20 years we have
accumulated electronics technology and ECU software
design technology via our electric power steering
business.
Tribology is a technology that controls friction and
wear, but friction itself is a complex topic. Chinese
automakers are very skilled at manufacturing EVs, and
have put great efforts into this area. The management of
such automakers told me that looking ahead, they must
now look at how to deal with friction, which is something
they had not regarded up until now. It is necessary to
reduce or control friction as much as possible for EVs
too. If we can refine our core technologies and integrate
systems that take advantage of needed digital
NSK’s Stance on ESG
NSK has put “protection of the global environment
through Motion & ControlTM” as part of its mission
statement, and has released many environmentally
friendly products that make full use of Four Core
Technologies plus One. On the other hand, natural
disasters caused by climate change are a frequent
occurrence across the world, and air, soil, and water
pollution problems are becoming more serious.
Environmental issues such as CO2 emissions and plastic
waste are also being put in the spotlight more and more.
Various regulations to ensure global environmental
conservation have been strengthened, and societal
demands that encourage companies to expand their
environmental efforts are increasing. Starting this year,
NSK has set the environment as a core value in addition
to safety, quality and compliance. In addition to
contributions through our products, we are also
implementing concrete measures to reduce the amount
of CO2 emissions caused by our manufacturing. Up until
now, we have focused on reducing the emissions per
production unit, but we have also declared that we will
work to reduce the absolute amount, and our goal is to
reduce current emissions by 60% by 2050. If we focus on
contributing to social value in the future, there will be
many areas that will incur costs. It is necessary to
prioritize such decisions from the top down, and to
proceed with a sense of urgency. Therefore, the
organizations responsible for environmental measures
are now under the direct control of the president.
Since 2014, we have been conducting an awareness
survey of our people–our most important assets–in
particular surveying the level of employee satisfaction.
Originally, it started as a compliance awareness survey,
but now the focus has shifted to employee engagement.
We aim to listen to the frank opinions of employees,
understand their awareness of our Mission Statement
and how much they empathize with Vision 2026. The
results of the survey are not only compared with
previous years, but also between organizations and job
types, as well as other group companies. For groups
that are found to have a large gap from where they want
to be or from the average, we will firstly work to improve
the quality and amount of communication, in
conjunction with the head of the organization. In
addition, we believe that understanding the actual
conditions and direction of the Company is what
underpins employee satisfaction, so we have increased
the number of opportunities to explain the MTP and
business results to employees. We obviously take safety
very seriously too. A place where employees can work
safely and with peace of mind is an important foundation.
We are also promoting diversity and inclusion.
Empowering women is one topic at the forefront of
current management issues. One of our KPIs is to
increase the ratio of female managers and candidates.
We are continuing to implement measures such as
training to achieve this, and we do not make adjustments
simply to meet our targets. It is critical that we provide
support for balancing work with childcare and nursing
care. Particularly when looking at the distribution of
our employees’ ages, we see that family care is an
issue that cannot be overlooked. We will provide
necessary support and measures so that employees
can continue working while being in a position to
provide nursing care. Furthermore, we live in an age
where acceptance of members of the LGBT (SOGI)
community at workplaces overseas is commonplace.
As a global company, NSK must work to catch up and
work on developing our awareness, culture, and
environment to be more accepting of diverse members
of society in Japan too. We will tackle the issues one by
one, such as those disadvantaged in the past by not
being aware of welfare systems and workplace
facilities. Moving on to persons with disabilities, further
innovation is necessary to provide more compatible
workplaces.
I believe that our level of governance has reached a
certain level of functionality under the Company with
Three Committees framework. We conduct evaluations
to check whether our Board of Directors is functioning
properly. To enhance the effectiveness of the Board of
Directors, a panel of external experts has conducted a
Board of Directors evaluation since 2015. In the 2018
results, we received an evaluation stating that the Board
of Directors had maintained a high level of effectiveness.
We have also made proactive efforts to respond to
Japan’s Corporate Governance Code. In the future I
employees have to recognize the company president as
think it is necessary to consider forming a Board of
a person. For example, a mere slogan such as that of
Directors with a majority of outside directors and
NSK’s core values, “Safety, Quality, Compliance,
changing the chairperson of the Board of Directors to a
Environment,” or Setting the Future in Motion as part of
non-executive director or an outside director. What is
Vision 2026, is not enough to keep a large organization
more important than the format is how we go about
like NSK going–the president needs to convey the
building a healthy and cooperative relationship between
thoughts and feelings behind it. It is important to listen
outside directors and internal directors. Lately outside
intently to the opinions of those who cannot honestly
directors have actively participated in site visits and
agree with your idea or direction, and to address these
executive meetings, and employees are more aware of
sincerely. However in reality, when you try doing this you
the presence of outside directors at NSK. This has led to
might find you cannot arrive at an answer immediately
the establishment of business plans and management
and are at a loss on how to react. Despite these
that take into account the presence of outside directors.
concerns, I believe it is important to step forward and
For example, we are building a framework for
engage in dialog. Even if I have to admit that I was wrong
accountability to aid directors with regard to matters
or that something I said was a mistake, I still think this
such as budget fidelity and operational risk
would be a good opportunity to show that it is okay to
management. I think it is very important to manage from
make mistakes. Also, as the president, I have the
the perspective of stakeholders, especially shareholders
opportunity to communicate with a range of people
and investors, rather than inward-looking discussion
outside of NSK. I think that it is the president’s
based on ways of thinking ingrained in our own company
responsibility to bring back the information and hints
or industry.
that I have obtained and share these within the
company–in other words, to strengthen the connection
between the outside and inside.
Toward Sustainable Development
We have begun our 6th MTP. As a stepping stone to our
2026 Vision, we decided to create the plan based on the
changes likely to occur in society from a mid- to
long-term perspective and aim to establish a corporate
foundation that will enable sustainable growth. We will
set the next three years as a period of strengthening our
business base, under the two key policies of Operational
Excellence (constant pursuit of competitiveness) and
Challenging Innovation (creation of new value), focusing
on the three measures I outlined previously.
Right now there are numerous various social issues
around the world that need to be resolved. Furthermore
we are seeing major technological innovations with
digitization, AI, and CASE at the forefront. At NSK we
contribute to “sustainable” development of society by
providing “value” through collaborative creation with all
of our stakeholders, and positioning social development
and NSK’s growth on the same vector.
We thank you for your continuing support.
Role of a Company President
It is the president’s role to set the direction of the
company, to determine strategies and plans as well as
their execution, and to take responsibility for the results
of these actions. There are no limits to the scope of
duties. The president needs to be the ultimate decision
maker for everything in the company and take full
responsibility for the results. There is no clear boundary
showing where a president’s responsibilities fall. I have
been the president of NSK for four years. As time goes
on, I feel the weight of my responsibility more and more.
One matter I find myself thinking a lot lately is the
importance of making my presence known both inside
and outside NSK. In a sense, I think that a company
president is a symbolic figure. Being the president is no
longer about sitting in the president’s office and giving
orders. I believe it is necessary to be on the shop floor
with everyone engaged in business, production, sales,
and design and development. It is important to show
everyone what the head of NSK looks like and what he
believes. In other words, to give the name a meaning,
Looking Back on the 5th Mid-Term
Management Plan and Ahead to Our
Next Plan
Looking back over the three years of the 5th Mid-Term
Management Plan (MTP), the first year, 2016, saw many
defining events such as Brexit and the arrival of the
Trump administration. These two events led to changes
all over the world and continue to do so even now. China,
which had seen immense growth, made its presence
even clearer by announcing its “Belt and Road Initiative”
and “Made in China 2025.” The trade friction that arose
between the US and China drastically worsened the
business environment. At the same time, technological
innovation also accelerated. In the Automotive Business,
the Big Four Tech Companies (i.e. Google, Amazon,
Facebook, and Apple or “GAFA”), have arrived on the
scene, and a new business model, which adds
environmental awareness to the trends of CASE will
greatly alter technology in the future as well as the role
of automobiles in our society. In the Industrial
Machinery Business, to counter the declining labor force
in developed countries we have seen an evolution in
factory automation (FA) and labor-saving, supported by
technological advances such as Internet of Things (IoT)
technology, Artificial Intelligence (AI), robots, and 5G
communications. We have also seen an increase of
investment aiming for the urbanization of developing
countries, as well as advancement of environmental
countermeasures spurring on electrification.
Looking at NSK’s business results, amid strong
demand in 2017, the second year of the MTP, we
managed to achieve our goal of one trillion yen in sales
one year early by focusing on maximizing our output. We
also set a new record high for operating income and net
income. However, in the final year, the effect of the
US-China trade friction became apparent, and we saw a
worsening environment for the Industrial Machinery
Business and Automotive Business. There were
decreases in sales and profits, and the final year of the
plan ended in a year-on-year decrease in our
consolidated business results.
A future issue based on reviewing the 5th MTP is the
regeneration of the steering business. In next-generation
product development, we have now achieved the
technical performance levels we targeted, and we will
secure official orders as soon as possible to ensure our
re-growth scenario. Although we made significant
investment in automotive bearings, the fixed cost burden
is somewhat large amid the current situation where
global automobile production is at a standstill. Although
the market is expected to grow in the mid- to long-term,
we aim to establish a lean cost structure while paying
close attention to the current trends in the vehicle
production numbers. There was a very strong demand in
the Industrial Machinery Business from early 2017. We
put all our efforts into securing output to maximize our
sales opportunities. Although these efforts resulted in a
significant increase in sales and profits, our production
capacity could not keep up with the increase in demand,
which led to a reliance on extra staff to meet production
output. After identifying mid- to long-term trends in
demand during the 6th MTP, we will aim to optimize the
business structure, including our sector and customer
portfolio with an emphasis on growth fields, and
organization of production capacity. In addition, while
NSK as a whole has been continuously working to
improve operational efficiency and systematization, it is
necessary to further prepare for the new era of AI.
Based on these reflections and issues, the 6th MTP,
which was established in line with vision for 2026,
marking the 110th anniversary of NSK’s founding, is
now being continuously pursued by the two pillars set
forth in the 5th MTP. We will further evolve NSK by
strengthening our competitiveness through “Operational
Excellence” and continuing our policy of investing for the
future through “Challenging Innovation.” Positioning
these three years as a period of strengthening our
business base and resources for the next growth phase,
our focus is on measures in the short-term to achieve
“new initiatives targeting growth,” to “enhance
managerial resources,” and to “contribute to the
environment and society.”
The business and management environments are
very uncertain and unpredictable at the moment. Not
only is the conventional autonomous cycle of the
economy changing, but political trends which have a
major impact on the economy are also altering the
current situation. In such an environment, expressing
goals in absolute terms of sales and profits can serve to
mislead markets, and it would be irresponsible of us to
do so. A key focus NSK set for 2026 is to establish a
corporate foundation for sustainable growth. This does
not mean simply seeking sustainable growth itself, but
rather achieving growth while reducing the burden on
society as a whole, as well as on employees and
suppliers. This is what I mean when we use the word
“sustainable.” Sustainability is formed by the strength of
managerial resources such as people, technical
capabilities, organizational structure, and the
information that flows within this structure. Without this,
businesses cannot grow or produce profitability. We will
work to strengthen our managerial resources with a
heightened awareness of “sustainable” perspective. It is
important that in the 6th MTP we show the extent that
NSK will increase its market position and profitability,
and how much we will return to shareholders in the
context of overall economic growth and compared with
our competitors. We must then make efforts to produce
results in line with this.
NSK’s Value Creation Process
To Our Stakeholders
Mid- to Long-Term Risks to NSK
and Countermeasures
Amid the current rapidly changing global situation,
looking at NSK’s current business scale and regional
portfolio, the weight of China stands out. This is the
result of our success in leveraging the high growth of
the Chinese economy, but at the same time it is also
becoming important that we manage country risk
soundly. In response to this, NSK has been focusing on
internalization in China for the past 10 years. Internally,
we have localized the top management of business
divisions and those responsible for functional divisions,
and from an external perspective, we invited Chinese
corporate management experts and university
professors to serve on an advisory board. With this, we
have incorporated views and opinions on society, politics
and the economy that are not bound by the boundaries
of companies and industries. Ultimately, we will aim for
a system in which our Chinese operations are fully run
by Chinese personnel.
We will also work to further improve our presence
in regions other than China. ASEAN is a region with
many Japanese companies as well as strong political
and economic connections. Another strategically critical
region is Europe. Europe is an important region because
it has very unique production facilities and industrial
machinery, as it focuses on the machine field and
machine parts. I would like to take steps to improve our
presence in Europe.
The second relates to automobiles, where EV and
autonomous driving stand at the forefront of
technological innovation, as well as the expanding area
of carsharing. The number of electric-powered vehicles
such as EVs and HEVs is sure to increase over the mid-
to long-term. For pure EVs, which do not contain an
internal combustion engine, the number of bearings
used per unit will likely decrease. On the other hand,
demand for in-vehicle motors will expand dramatically
in the continuing pursuit of safety, comfort, and
convenience. As the use of bearings will become more
sophisticated and performance requirements will
increase, 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 for
improving EV functionality that incorporate NSK’s core
technology. With products that make use of NSK’s
strengths, we will connect new needs generated by
technological innovation to business opportunities.
In addition, if society changes in such a way that car
sharing becomes the norm, then the scale of the
automobile industry will be greatly affected. We will see
a completely new way of mobility in cities, and everyone
will share cars with simple mechanisms such as EVs.
On the other hand, when it comes to long-distance
travel, drivers will want a car that they enjoy driving, and
one that is functional as well as appealing. In other
words, we may see the market diverge. NSK must take
advantage of having contact points with customers in all
directions and proceed with technological development
and technical proposals while fully understanding how
the automotive industry is changing. The risk is with our
relationship with players in the automotive industry,
such as GAFA, Uber, Didi Chuxing, which are
strengthening their position in automotive circles. We
must think about how we can consciously form points of
contact with these companies. Looking at the current
world of cyber technologies, which are becoming ever
more sophisticated with the evolution of IoT, AI, and 5G
communication, if these technologies become the
defining factors, then I believe this could be a weakness
in NSK’s business. However, in order to realize the
merits of cyber technology, the importance of physical
parts and their motion will no doubt come under the
spotlight. NSK’s core technology is used to give things
efficient and effective motion. Regardless of how good
the information and data are, if the mechanism of the
object that moves in response to the signal is remiss,
the level of satisfaction obtained from it will be low.
Rather than simply seeing this as a risk, from the
perspective of how to utilize various information and
data for movement, and how to make the movement
more satisfying, I think there is value in developing and
refining NSK’s core technology once again.
Looking at the competitive environment, Chinese
manufacturers have gone from strength to strength,
and Japanese companies as well as Western companies
in China have begun making use of such manufacturers.
The challenge for NSK, a company that is highly
regarded for its outstanding functionality and high
quality, will be a tough one. However, even if Chinese
manufacturers’ product quality improves, there is still a
large difference in terms of the accumulated analytical
power and expertise to derive causes and solutions
when problems occur in the market. NSK has the ability
to solve problems and provide technical proposals based
on the experience accumulated over our 103 years of
history. It will be difficult for competitors to emulate this.
On the other hand, NSK also has a chance to work and
partner with these companies.
Finally, the risk of a shrinking workforce due to the
declining birthrate and aging population will be
particularly noticeable in Japan and China. Even if there
are workers, there will be fewer people willing to work in
the machine component manufacturing industry. The
key within the next five to ten years will be our ability to
create production facilities, production processes and
plants that do not rely on people. In the 5th MTP, we
technology such as AI and IoT, we can raise expectations
worked on introducing NSK’s Smart Factories, and set
for NSK as the industry undergoes rapid technological
up model lines for both small-lot large variety
changes.
large-sized bearings, and mass-produced small-sized
bearings. In the future, we intend to work on developing
Under Vision 2026, which we established on the
these lines into 2nd and 3rd generations, expand the
occasion of our 100th anniversary, we declared our
number of lines this technology is used in, and expand
intent to set the future in motion. Looking back on the
this technology overseas.
Mid- to Long-Term Risks
Risk Management
100-year history of NSK, I believe we have undertaken
many ambitious initiatives and challenges in the past. In
becoming the first company to manufacture bearings in
PP. 36-37
Japan, we overcame one challenge after another.
Additionally, in the post-war economic development of
Japan, for example, we gave rise to a new era in motion
by developing bearings for the Shinkansen, which need
to withstand operating at speeds of over 300 km per
hour and bearings for VTRs requiring smooth rotation to
the utmost limit.
However, over the past 30 years or so, we have
become passive in our approach, and have not tried to
actively drive change. We need to have a strong
awareness of our new role in providing comprehensive
solutions that utilize Motion & ControlTM, the concept of
our business, to society.
As the speed of technological evolution accelerates,
we need to challenge ourselves in new fields with
innovative ideas, ask ourselves whether we can form
these ideas into a product, and speed up this process.
To that end, we are creating and working on a
development organization for new business areas that is
not bound by existing frameworks. In this context, we
value the attitude of challenging everything. In “NSK: 100
Years of Progress” published earlier this year, there is a
story from 1961, when NSK’s Fujisawa Technology
Center was established. The Company used the motto “It
doesn’t matter if you strike out. Challenge the unknown
without fear of failure.” to encourage the development of
new products. We need to reestablish this spirit and
tackle a range of new challenges. In terms of NSK’s
management stance, I believe we need to encourage
employees to step into the batter box, and not get angry
or be critical even if they “strike out.”
Our strong relationships with business partners,
such as customers, suppliers and distributors
Creating Value with Stakeholders
PP. 34-35
Four Core Technologies plus One
P. 42
NSK’s Strengths
and Their Further Evolution
One of NSK’s strengths lies in its intangible assets–in
particular its people. The quality of our people will be
essential in order to respond to requests from
customers and the market. Not only in Japan, but also
in Europe, the United States, and China, people working
under the NSK brand are serious and are particular
about monozukuri. I know our employees take pride in
working for a world-leading manufacturer. Another
strength is our strong relationships with business
partners, such as customers, suppliers and distributors.
It is this relationship of trust that allows us to embark
on new challenges together in addition to profit-driven
initiatives such as cost or pricing. I think that this has
been cultivated across our history of more than 100
years.
NSK’s intellectual property: “Four Core
Technologies plus One.” We have added manufacturing
engineering to tribology, materials, numerical
simulation, and mechatronics, and position these as
NSK’s technical foundation. Our strengths lie in our
accumulated expertise in precision grinding and
assembly, heat treatment and other technologies. In
mechatronics technology, over the last 20 years we have
accumulated electronics technology and ECU software
design technology via our electric power steering
business.
Tribology is a technology that controls friction and
wear, but friction itself is a complex topic. Chinese
automakers are very skilled at manufacturing EVs, and
have put great efforts into this area. The management of
such automakers told me that looking ahead, they must
now look at how to deal with friction, which is something
they had not regarded up until now. It is necessary to
reduce or control friction as much as possible for EVs
too. If we can refine our core technologies and integrate
systems that take advantage of needed digital
08
NSK REPORT 2019
NSK REPORT 2019
09
NSK’s Stance on ESG
NSK has put “protection of the global environment
through Motion & ControlTM” as part of its mission
statement, and has released many environmentally
friendly products that make full use of Four Core
Technologies plus One. On the other hand, natural
disasters caused by climate change are a frequent
occurrence across the world, and air, soil, and water
pollution problems are becoming more serious.
Environmental issues such as CO2 emissions and plastic
waste are also being put in the spotlight more and more.
Various regulations to ensure global environmental
conservation have been strengthened, and societal
demands that encourage companies to expand their
environmental efforts are increasing. Starting this year,
NSK has set the environment as a core value in addition
to safety, quality and compliance. In addition to
contributions through our products, we are also
implementing concrete measures to reduce the amount
of CO2 emissions caused by our manufacturing. Up until
now, we have focused on reducing the emissions per
production unit, but we have also declared that we will
work to reduce the absolute amount, and our goal is to
reduce current emissions by 60% by 2050. If we focus on
contributing to social value in the future, there will be
many areas that will incur costs. It is necessary to
prioritize such decisions from the top down, and to
proceed with a sense of urgency. Therefore, the
organizations responsible for environmental measures
are now under the direct control of the president.
Since 2014, we have been conducting an awareness
survey of our people–our most important assets–in
particular surveying the level of employee satisfaction.
Originally, it started as a compliance awareness survey,
but now the focus has shifted to employee engagement.
We aim to listen to the frank opinions of employees,
understand their awareness of our Mission Statement
and how much they empathize with Vision 2026. The
results of the survey are not only compared with
previous years, but also between organizations and job
types, as well as other group companies. For groups
that are found to have a large gap from where they want
to be or from the average, we will firstly work to improve
the quality and amount of communication, in
conjunction with the head of the organization. In
addition, we believe that understanding the actual
conditions and direction of the Company is what
underpins employee satisfaction, so we have increased
the number of opportunities to explain the MTP and
business results to employees. We obviously take safety
very seriously too. A place where employees can work
safely and with peace of mind is an important foundation.
We are also promoting diversity and inclusion.
Empowering women is one topic at the forefront of
current management issues. One of our KPIs is to
increase the ratio of female managers and candidates.
We are continuing to implement measures such as
training to achieve this, and we do not make adjustments
simply to meet our targets. It is critical that we provide
support for balancing work with childcare and nursing
care. Particularly when looking at the distribution of
our employees’ ages, we see that family care is an
issue that cannot be overlooked. We will provide
necessary support and measures so that employees
can continue working while being in a position to
provide nursing care. Furthermore, we live in an age
where acceptance of members of the LGBT (SOGI)
community at workplaces overseas is commonplace.
As a global company, NSK must work to catch up and
work on developing our awareness, culture, and
environment to be more accepting of diverse members
of society in Japan too. We will tackle the issues one by
one, such as those disadvantaged in the past by not
being aware of welfare systems and workplace
facilities. Moving on to persons with disabilities, further
innovation is necessary to provide more compatible
workplaces.
I believe that our level of governance has reached a
certain level of functionality under the Company with
Three Committees framework. We conduct evaluations
to check whether our Board of Directors is functioning
properly. To enhance the effectiveness of the Board of
Directors, a panel of external experts has conducted a
Board of Directors evaluation since 2015. In the 2018
results, we received an evaluation stating that the Board
of Directors had maintained a high level of effectiveness.
We have also made proactive efforts to respond to
Japan’s Corporate Governance Code. In the future I
employees have to recognize the company president as
think it is necessary to consider forming a Board of
a person. For example, a mere slogan such as that of
Directors with a majority of outside directors and
NSK’s core values, “Safety, Quality, Compliance,
changing the chairperson of the Board of Directors to a
Environment,” or Setting the Future in Motion as part of
non-executive director or an outside director. What is
Vision 2026, is not enough to keep a large organization
more important than the format is how we go about
like NSK going–the president needs to convey the
building a healthy and cooperative relationship between
thoughts and feelings behind it. It is important to listen
outside directors and internal directors. Lately outside
intently to the opinions of those who cannot honestly
directors have actively participated in site visits and
agree with your idea or direction, and to address these
executive meetings, and employees are more aware of
sincerely. However in reality, when you try doing this you
the presence of outside directors at NSK. This has led to
might find you cannot arrive at an answer immediately
the establishment of business plans and management
and are at a loss on how to react. Despite these
that take into account the presence of outside directors.
concerns, I believe it is important to step forward and
For example, we are building a framework for
engage in dialog. Even if I have to admit that I was wrong
accountability to aid directors with regard to matters
or that something I said was a mistake, I still think this
such as budget fidelity and operational risk
would be a good opportunity to show that it is okay to
management. I think it is very important to manage from
make mistakes. Also, as the president, I have the
the perspective of stakeholders, especially shareholders
opportunity to communicate with a range of people
and investors, rather than inward-looking discussion
outside of NSK. I think that it is the president’s
based on ways of thinking ingrained in our own company
responsibility to bring back the information and hints
or industry.
that I have obtained and share these within the
company–in other words, to strengthen the connection
between the outside and inside.
Toward Sustainable Development
We have begun our 6th MTP. As a stepping stone to our
2026 Vision, we decided to create the plan based on the
changes likely to occur in society from a mid- to
long-term perspective and aim to establish a corporate
foundation that will enable sustainable growth. We will
set the next three years as a period of strengthening our
business base, under the two key policies of Operational
Excellence (constant pursuit of competitiveness) and
Challenging Innovation (creation of new value), focusing
on the three measures I outlined previously.
Right now there are numerous various social issues
around the world that need to be resolved. Furthermore
we are seeing major technological innovations with
digitization, AI, and CASE at the forefront. At NSK we
contribute to “sustainable” development of society by
providing “value” through collaborative creation with all
of our stakeholders, and positioning social development
and NSK’s growth on the same vector.
We thank you for your continuing support.
Role of a Company President
It is the president’s role to set the direction of the
company, to determine strategies and plans as well as
their execution, and to take responsibility for the results
of these actions. There are no limits to the scope of
duties. The president needs to be the ultimate decision
maker for everything in the company and take full
responsibility for the results. There is no clear boundary
showing where a president’s responsibilities fall. I have
been the president of NSK for four years. As time goes
on, I feel the weight of my responsibility more and more.
One matter I find myself thinking a lot lately is the
importance of making my presence known both inside
and outside NSK. In a sense, I think that a company
president is a symbolic figure. Being the president is no
longer about sitting in the president’s office and giving
orders. I believe it is necessary to be on the shop floor
with everyone engaged in business, production, sales,
and design and development. It is important to show
everyone what the head of NSK looks like and what he
believes. In other words, to give the name a meaning,
Looking Back on the 5th Mid-Term
Management Plan and Ahead to Our
Next Plan
Looking back over the three years of the 5th Mid-Term
Management Plan (MTP), the first year, 2016, saw many
defining events such as Brexit and the arrival of the
Trump administration. These two events led to changes
all over the world and continue to do so even now. China,
which had seen immense growth, made its presence
even clearer by announcing its “Belt and Road Initiative”
and “Made in China 2025.” The trade friction that arose
between the US and China drastically worsened the
business environment. At the same time, technological
innovation also accelerated. In the Automotive Business,
the Big Four Tech Companies (i.e. Google, Amazon,
Facebook, and Apple or “GAFA”), have arrived on the
scene, and a new business model, which adds
environmental awareness to the trends of CASE will
greatly alter technology in the future as well as the role
of automobiles in our society. In the Industrial
Machinery Business, to counter the declining labor force
in developed countries we have seen an evolution in
factory automation (FA) and labor-saving, supported by
technological advances such as Internet of Things (IoT)
technology, Artificial Intelligence (AI), robots, and 5G
communications. We have also seen an increase of
investment aiming for the urbanization of developing
countries, as well as advancement of environmental
countermeasures spurring on electrification.
Looking at NSK’s business results, amid strong
demand in 2017, the second year of the MTP, we
managed to achieve our goal of one trillion yen in sales
one year early by focusing on maximizing our output. We
also set a new record high for operating income and net
income. However, in the final year, the effect of the
US-China trade friction became apparent, and we saw a
worsening environment for the Industrial Machinery
Business and Automotive Business. There were
decreases in sales and profits, and the final year of the
plan ended in a year-on-year decrease in our
consolidated business results.
A future issue based on reviewing the 5th MTP is the
regeneration of the steering business. In next-generation
product development, we have now achieved the
technical performance levels we targeted, and we will
secure official orders as soon as possible to ensure our
re-growth scenario. Although we made significant
investment in automotive bearings, the fixed cost burden
is somewhat large amid the current situation where
global automobile production is at a standstill. Although
the market is expected to grow in the mid- to long-term,
we aim to establish a lean cost structure while paying
close attention to the current trends in the vehicle
production numbers. There was a very strong demand in
the Industrial Machinery Business from early 2017. We
put all our efforts into securing output to maximize our
sales opportunities. Although these efforts resulted in a
significant increase in sales and profits, our production
capacity could not keep up with the increase in demand,
which led to a reliance on extra staff to meet production
output. After identifying mid- to long-term trends in
demand during the 6th MTP, we will aim to optimize the
business structure, including our sector and customer
portfolio with an emphasis on growth fields, and
organization of production capacity. In addition, while
NSK as a whole has been continuously working to
improve operational efficiency and systematization, it is
necessary to further prepare for the new era of AI.
Based on these reflections and issues, the 6th MTP,
which was established in line with vision for 2026,
marking the 110th anniversary of NSK’s founding, is
now being continuously pursued by the two pillars set
forth in the 5th MTP. We will further evolve NSK by
strengthening our competitiveness through “Operational
Excellence” and continuing our policy of investing for the
future through “Challenging Innovation.” Positioning
these three years as a period of strengthening our
business base and resources for the next growth phase,
our focus is on measures in the short-term to achieve
“new initiatives targeting growth,” to “enhance
managerial resources,” and to “contribute to the
environment and society.”
The business and management environments are
very uncertain and unpredictable at the moment. Not
only is the conventional autonomous cycle of the
economy changing, but political trends which have a
major impact on the economy are also altering the
current situation. In such an environment, expressing
goals in absolute terms of sales and profits can serve to
mislead markets, and it would be irresponsible of us to
do so. A key focus NSK set for 2026 is to establish a
corporate foundation for sustainable growth. This does
not mean simply seeking sustainable growth itself, but
rather achieving growth while reducing the burden on
society as a whole, as well as on employees and
suppliers. This is what I mean when we use the word
“sustainable.” Sustainability is formed by the strength of
managerial resources such as people, technical
capabilities, organizational structure, and the
information that flows within this structure. Without this,
businesses cannot grow or produce profitability. We will
work to strengthen our managerial resources with a
heightened awareness of “sustainable” perspective. It is
important that in the 6th MTP we show the extent that
NSK will increase its market position and profitability,
and how much we will return to shareholders in the
context of overall economic growth and compared with
our competitors. We must then make efforts to produce
results in line with this.
NSK’s Value Creation Process
To Our Stakeholders
Mid- to Long-Term Risks to NSK
and Countermeasures
Amid the current rapidly changing global situation,
looking at NSK’s current business scale and regional
portfolio, the weight of China stands out. This is the
result of our success in leveraging the high growth of
the Chinese economy, but at the same time it is also
becoming important that we manage country risk
soundly. In response to this, NSK has been focusing on
internalization in China for the past 10 years. Internally,
we have localized the top management of business
divisions and those responsible for functional divisions,
and from an external perspective, we invited Chinese
corporate management experts and university
professors to serve on an advisory board. With this, we
have incorporated views and opinions on society, politics
and the economy that are not bound by the boundaries
of companies and industries. Ultimately, we will aim for
a system in which our Chinese operations are fully run
by Chinese personnel.
We will also work to further improve our presence
in regions other than China. ASEAN is a region with
many Japanese companies as well as strong political
and economic connections. Another strategically critical
region is Europe. Europe is an important region because
it has very unique production facilities and industrial
machinery, as it focuses on the machine field and
machine parts. I would like to take steps to improve our
presence in Europe.
The second relates to automobiles, where EV and
autonomous driving stand at the forefront of
technological innovation, as well as the expanding area
of carsharing. The number of electric-powered vehicles
such as EVs and HEVs is sure to increase over the mid-
to long-term. For pure EVs, which do not contain an
internal combustion engine, the number of bearings
used per unit will likely decrease. On the other hand,
demand for in-vehicle motors will expand dramatically
in the continuing pursuit of safety, comfort, and
convenience. As the use of bearings will become more
sophisticated and performance requirements will
increase, 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 for
improving EV functionality that incorporate NSK’s core
technology. With products that make use of NSK’s
strengths, we will connect new needs generated by
technological innovation to business opportunities.
In addition, if society changes in such a way that car
sharing becomes the norm, then the scale of the
automobile industry will be greatly affected. We will see
a completely new way of mobility in cities, and everyone
will share cars with simple mechanisms such as EVs.
On the other hand, when it comes to long-distance
travel, drivers will want a car that they enjoy driving, and
one that is functional as well as appealing. In other
words, we may see the market diverge. NSK must take
advantage of having contact points with customers in all
directions and proceed with technological development
and technical proposals while fully understanding how
the automotive industry is changing. The risk is with our
relationship with players in the automotive industry,
such as GAFA, Uber, Didi Chuxing, which are
strengthening their position in automotive circles. We
must think about how we can consciously form points of
contact with these companies. Looking at the current
world of cyber technologies, which are becoming ever
more sophisticated with the evolution of IoT, AI, and 5G
communication, if these technologies become the
defining factors, then I believe this could be a weakness
in NSK’s business. However, in order to realize the
merits of cyber technology, the importance of physical
parts and their motion will no doubt come under the
spotlight. NSK’s core technology is used to give things
efficient and effective motion. Regardless of how good
the information and data are, if the mechanism of the
object that moves in response to the signal is remiss,
the level of satisfaction obtained from it will be low.
Rather than simply seeing this as a risk, from the
perspective of how to utilize various information and
data for movement, and how to make the movement
more satisfying, I think there is value in developing and
refining NSK’s core technology once again.
Looking at the competitive environment, Chinese
manufacturers have gone from strength to strength,
and Japanese companies as well as Western companies
in China have begun making use of such manufacturers.
The challenge for NSK, a company that is highly
regarded for its outstanding functionality and high
quality, will be a tough one. However, even if Chinese
manufacturers’ product quality improves, there is still a
large difference in terms of the accumulated analytical
power and expertise to derive causes and solutions
when problems occur in the market. NSK has the ability
to solve problems and provide technical proposals based
on the experience accumulated over our 103 years of
history. It will be difficult for competitors to emulate this.
On the other hand, NSK also has a chance to work and
partner with these companies.
Finally, the risk of a shrinking workforce due to the
declining birthrate and aging population will be
particularly noticeable in Japan and China. Even if there
are workers, there will be fewer people willing to work in
the machine component manufacturing industry. The
key within the next five to ten years will be our ability to
create production facilities, production processes and
plants that do not rely on people. In the 5th MTP, we
worked on introducing NSK’s Smart Factories, and set
up model lines for both small-lot large variety
large-sized bearings, and mass-produced small-sized
bearings. In the future, we intend to work on developing
these lines into 2nd and 3rd generations, expand the
number of lines this technology is used in, and expand
this technology overseas.
Mid- to Long-Term Risks
Risk Management
PP. 36-37
NSK’s Strengths
and Their Further Evolution
One of NSK’s strengths lies in its intangible assets–in
particular its people. The quality of our people will be
essential in order to respond to requests from
customers and the market. Not only in Japan, but also
in Europe, the United States, and China, people working
under the NSK brand are serious and are particular
about monozukuri. I know our employees take pride in
working for a world-leading manufacturer. Another
strength is our strong relationships with business
partners, such as customers, suppliers and distributors.
It is this relationship of trust that allows us to embark
on new challenges together in addition to profit-driven
initiatives such as cost or pricing. I think that this has
been cultivated across our history of more than 100
years.
NSK’s intellectual property: “Four Core
Technologies plus One.” We have added manufacturing
engineering to tribology, materials, numerical
simulation, and mechatronics, and position these as
NSK’s technical foundation. Our strengths lie in our
accumulated expertise in precision grinding and
assembly, heat treatment and other technologies. In
mechatronics technology, over the last 20 years we have
accumulated electronics technology and ECU software
design technology via our electric power steering
business.
Tribology is a technology that controls friction and
wear, but friction itself is a complex topic. Chinese
automakers are very skilled at manufacturing EVs, and
have put great efforts into this area. The management of
such automakers told me that looking ahead, they must
now look at how to deal with friction, which is something
they had not regarded up until now. It is necessary to
reduce or control friction as much as possible for EVs
too. If we can refine our core technologies and integrate
systems that take advantage of needed digital
technology such as AI and IoT, we can raise expectations
for NSK as the industry undergoes rapid technological
changes.
Under Vision 2026, which we established on the
occasion of our 100th anniversary, we declared our
intent to set the future in motion. Looking back on the
100-year history of NSK, I believe we have undertaken
many ambitious initiatives and challenges in the past. In
becoming the first company to manufacture bearings in
Japan, we overcame one challenge after another.
Additionally, in the post-war economic development of
Japan, for example, we gave rise to a new era in motion
by developing bearings for the Shinkansen, which need
to withstand operating at speeds of over 300 km per
hour and bearings for VTRs requiring smooth rotation to
the utmost limit.
However, over the past 30 years or so, we have
become passive in our approach, and have not tried to
actively drive change. We need to have a strong
awareness of our new role in providing comprehensive
solutions that utilize Motion & ControlTM, the concept of
our business, to society.
As the speed of technological evolution accelerates,
we need to challenge ourselves in new fields with
innovative ideas, ask ourselves whether we can form
these ideas into a product, and speed up this process.
To that end, we are creating and working on a
development organization for new business areas that is
not bound by existing frameworks. In this context, we
value the attitude of challenging everything. In “NSK: 100
Years of Progress” published earlier this year, there is a
story from 1961, when NSK’s Fujisawa Technology
Center was established. The Company used the motto “It
doesn’t matter if you strike out. Challenge the unknown
without fear of failure.” to encourage the development of
new products. We need to reestablish this spirit and
tackle a range of new challenges. In terms of NSK’s
management stance, I believe we need to encourage
employees to step into the batter box, and not get angry
or be critical even if they “strike out.”
Our strong relationships with business partners,
such as customers, suppliers and distributors
Creating Value with Stakeholders
Four Core Technologies plus One
PP. 34-35
P. 42
08
NSK REPORT 2019
NSK REPORT 2019
09
NSK’s Stance on ESG
NSK has put “protection of the global environment
through Motion & ControlTM” as part of its mission
statement, and has released many environmentally
friendly products that make full use of Four Core
Technologies plus One. On the other hand, natural
disasters caused by climate change are a frequent
occurrence across the world, and air, soil, and water
pollution problems are becoming more serious.
Environmental issues such as CO2 emissions and plastic
waste are also being put in the spotlight more and more.
Various regulations to ensure global environmental
conservation have been strengthened, and societal
demands that encourage companies to expand their
environmental efforts are increasing. Starting this year,
NSK has set the environment as a core value in addition
to safety, quality and compliance. In addition to
contributions through our products, we are also
implementing concrete measures to reduce the amount
of CO2 emissions caused by our manufacturing. Up until
now, we have focused on reducing the emissions per
production unit, but we have also declared that we will
work to reduce the absolute amount, and our goal is to
reduce current emissions by 60% by 2050. If we focus on
contributing to social value in the future, there will be
many areas that will incur costs. It is necessary to
prioritize such decisions from the top down, and to
proceed with a sense of urgency. Therefore, the
organizations responsible for environmental measures
are now under the direct control of the president.
Since 2014, we have been conducting an awareness
survey of our people–our most important assets–in
particular surveying the level of employee satisfaction.
Originally, it started as a compliance awareness survey,
but now the focus has shifted to employee engagement.
We aim to listen to the frank opinions of employees,
understand their awareness of our Mission Statement
and how much they empathize with Vision 2026. The
results of the survey are not only compared with
previous years, but also between organizations and job
types, as well as other group companies. For groups
that are found to have a large gap from where they want
to be or from the average, we will firstly work to improve
the quality and amount of communication, in
conjunction with the head of the organization. In
addition, we believe that understanding the actual
conditions and direction of the Company is what
underpins employee satisfaction, so we have increased
the number of opportunities to explain the MTP and
business results to employees. We obviously take safety
very seriously too. A place where employees can work
safely and with peace of mind is an important foundation.
We are also promoting diversity and inclusion.
Empowering women is one topic at the forefront of
current management issues. One of our KPIs is to
increase the ratio of female managers and candidates.
We are continuing to implement measures such as
training to achieve this, and we do not make adjustments
simply to meet our targets. It is critical that we provide
support for balancing work with childcare and nursing
care. Particularly when looking at the distribution of
our employees’ ages, we see that family care is an
issue that cannot be overlooked. We will provide
necessary support and measures so that employees
can continue working while being in a position to
provide nursing care. Furthermore, we live in an age
where acceptance of members of the LGBT (SOGI)
community at workplaces overseas is commonplace.
As a global company, NSK must work to catch up and
work on developing our awareness, culture, and
environment to be more accepting of diverse members
of society in Japan too. We will tackle the issues one by
one, such as those disadvantaged in the past by not
being aware of welfare systems and workplace
facilities. Moving on to persons with disabilities, further
innovation is necessary to provide more compatible
workplaces.
I believe that our level of governance has reached a
certain level of functionality under the Company with
Three Committees framework. We conduct evaluations
to check whether our Board of Directors is functioning
properly. To enhance the effectiveness of the Board of
Directors, a panel of external experts has conducted a
Board of Directors evaluation since 2015. In the 2018
results, we received an evaluation stating that the Board
of Directors had maintained a high level of effectiveness.
We have also made proactive efforts to respond to
Japan’s Corporate Governance Code. In the future I
employees have to recognize the company president as
think it is necessary to consider forming a Board of
a person. For example, a mere slogan such as that of
Directors with a majority of outside directors and
NSK’s core values, “Safety, Quality, Compliance,
changing the chairperson of the Board of Directors to a
Environment,” or Setting the Future in Motion as part of
non-executive director or an outside director. What is
Vision 2026, is not enough to keep a large organization
more important than the format is how we go about
like NSK going–the president needs to convey the
building a healthy and cooperative relationship between
thoughts and feelings behind it. It is important to listen
outside directors and internal directors. Lately outside
intently to the opinions of those who cannot honestly
directors have actively participated in site visits and
agree with your idea or direction, and to address these
executive meetings, and employees are more aware of
sincerely. However in reality, when you try doing this you
the presence of outside directors at NSK. This has led to
might find you cannot arrive at an answer immediately
the establishment of business plans and management
and are at a loss on how to react. Despite these
that take into account the presence of outside directors.
concerns, I believe it is important to step forward and
For example, we are building a framework for
engage in dialog. Even if I have to admit that I was wrong
accountability to aid directors with regard to matters
or that something I said was a mistake, I still think this
such as budget fidelity and operational risk
would be a good opportunity to show that it is okay to
management. I think it is very important to manage from
make mistakes. Also, as the president, I have the
the perspective of stakeholders, especially shareholders
opportunity to communicate with a range of people
and investors, rather than inward-looking discussion
outside of NSK. I think that it is the president’s
based on ways of thinking ingrained in our own company
responsibility to bring back the information and hints
or industry.
that I have obtained and share these within the
company–in other words, to strengthen the connection
between the outside and inside.
Toward Sustainable Development
We have begun our 6th MTP. As a stepping stone to our
2026 Vision, we decided to create the plan based on the
changes likely to occur in society from a mid- to
long-term perspective and aim to establish a corporate
foundation that will enable sustainable growth. We will
set the next three years as a period of strengthening our
business base, under the two key policies of Operational
Excellence (constant pursuit of competitiveness) and
Challenging Innovation (creation of new value), focusing
on the three measures I outlined previously.
Right now there are numerous various social issues
around the world that need to be resolved. Furthermore
we are seeing major technological innovations with
digitization, AI, and CASE at the forefront. At NSK we
contribute to “sustainable” development of society by
providing “value” through collaborative creation with all
of our stakeholders, and positioning social development
and NSK’s growth on the same vector.
We thank you for your continuing support.
Role of a Company President
It is the president’s role to set the direction of the
company, to determine strategies and plans as well as
their execution, and to take responsibility for the results
of these actions. There are no limits to the scope of
duties. The president needs to be the ultimate decision
maker for everything in the company and take full
responsibility for the results. There is no clear boundary
showing where a president’s responsibilities fall. I have
been the president of NSK for four years. As time goes
on, I feel the weight of my responsibility more and more.
One matter I find myself thinking a lot lately is the
importance of making my presence known both inside
and outside NSK. In a sense, I think that a company
president is a symbolic figure. Being the president is no
longer about sitting in the president’s office and giving
orders. I believe it is necessary to be on the shop floor
with everyone engaged in business, production, sales,
and design and development. It is important to show
everyone what the head of NSK looks like and what he
believes. In other words, to give the name a meaning,
Looking Back on the 5th Mid-Term
Management Plan and Ahead to Our
Next Plan
Looking back over the three years of the 5th Mid-Term
Management Plan (MTP), the first year, 2016, saw many
defining events such as Brexit and the arrival of the
Trump administration. These two events led to changes
all over the world and continue to do so even now. China,
which had seen immense growth, made its presence
even clearer by announcing its “Belt and Road Initiative”
and “Made in China 2025.” The trade friction that arose
between the US and China drastically worsened the
business environment. At the same time, technological
innovation also accelerated. In the Automotive Business,
the Big Four Tech Companies (i.e. Google, Amazon,
Facebook, and Apple or “GAFA”), have arrived on the
scene, and a new business model, which adds
environmental awareness to the trends of CASE will
greatly alter technology in the future as well as the role
of automobiles in our society. In the Industrial
Machinery Business, to counter the declining labor force
in developed countries we have seen an evolution in
factory automation (FA) and labor-saving, supported by
technological advances such as Internet of Things (IoT)
technology, Artificial Intelligence (AI), robots, and 5G
communications. We have also seen an increase of
investment aiming for the urbanization of developing
countries, as well as advancement of environmental
countermeasures spurring on electrification.
Looking at NSK’s business results, amid strong
demand in 2017, the second year of the MTP, we
managed to achieve our goal of one trillion yen in sales
one year early by focusing on maximizing our output. We
also set a new record high for operating income and net
income. However, in the final year, the effect of the
US-China trade friction became apparent, and we saw a
worsening environment for the Industrial Machinery
Business and Automotive Business. There were
decreases in sales and profits, and the final year of the
plan ended in a year-on-year decrease in our
consolidated business results.
A future issue based on reviewing the 5th MTP is the
regeneration of the steering business. In next-generation
product development, we have now achieved the
technical performance levels we targeted, and we will
secure official orders as soon as possible to ensure our
re-growth scenario. Although we made significant
investment in automotive bearings, the fixed cost burden
is somewhat large amid the current situation where
global automobile production is at a standstill. Although
the market is expected to grow in the mid- to long-term,
we aim to establish a lean cost structure while paying
close attention to the current trends in the vehicle
production numbers. There was a very strong demand in
the Industrial Machinery Business from early 2017. We
put all our efforts into securing output to maximize our
sales opportunities. Although these efforts resulted in a
significant increase in sales and profits, our production
capacity could not keep up with the increase in demand,
which led to a reliance on extra staff to meet production
output. After identifying mid- to long-term trends in
demand during the 6th MTP, we will aim to optimize the
business structure, including our sector and customer
portfolio with an emphasis on growth fields, and
organization of production capacity. In addition, while
NSK as a whole has been continuously working to
improve operational efficiency and systematization, it is
necessary to further prepare for the new era of AI.
Based on these reflections and issues, the 6th MTP,
which was established in line with vision for 2026,
marking the 110th anniversary of NSK’s founding, is
now being continuously pursued by the two pillars set
forth in the 5th MTP. We will further evolve NSK by
strengthening our competitiveness through “Operational
Excellence” and continuing our policy of investing for the
future through “Challenging Innovation.” Positioning
these three years as a period of strengthening our
business base and resources for the next growth phase,
our focus is on measures in the short-term to achieve
“new initiatives targeting growth,” to “enhance
managerial resources,” and to “contribute to the
environment and society.”
The business and management environments are
very uncertain and unpredictable at the moment. Not
only is the conventional autonomous cycle of the
economy changing, but political trends which have a
major impact on the economy are also altering the
current situation. In such an environment, expressing
goals in absolute terms of sales and profits can serve to
mislead markets, and it would be irresponsible of us to
do so. A key focus NSK set for 2026 is to establish a
corporate foundation for sustainable growth. This does
not mean simply seeking sustainable growth itself, but
rather achieving growth while reducing the burden on
society as a whole, as well as on employees and
suppliers. This is what I mean when we use the word
“sustainable.” Sustainability is formed by the strength of
managerial resources such as people, technical
capabilities, organizational structure, and the
information that flows within this structure. Without this,
businesses cannot grow or produce profitability. We will
work to strengthen our managerial resources with a
heightened awareness of “sustainable” perspective. It is
important that in the 6th MTP we show the extent that
NSK will increase its market position and profitability,
and how much we will return to shareholders in the
context of overall economic growth and compared with
our competitors. We must then make efforts to produce
results in line with this.
Mid- to Long-Term Risks to NSK
and Countermeasures
Amid the current rapidly changing global situation,
looking at NSK’s current business scale and regional
portfolio, the weight of China stands out. This is the
result of our success in leveraging the high growth of
the Chinese economy, but at the same time it is also
becoming important that we manage country risk
soundly. In response to this, NSK has been focusing on
internalization in China for the past 10 years. Internally,
we have localized the top management of business
divisions and those responsible for functional divisions,
and from an external perspective, we invited Chinese
corporate management experts and university
professors to serve on an advisory board. With this, we
have incorporated views and opinions on society, politics
and the economy that are not bound by the boundaries
of companies and industries. Ultimately, we will aim for
a system in which our Chinese operations are fully run
by Chinese personnel.
We will also work to further improve our presence
in regions other than China. ASEAN is a region with
many Japanese companies as well as strong political
and economic connections. Another strategically critical
region is Europe. Europe is an important region because
it has very unique production facilities and industrial
machinery, as it focuses on the machine field and
machine parts. I would like to take steps to improve our
presence in Europe.
The second relates to automobiles, where EV and
autonomous driving stand at the forefront of
technological innovation, as well as the expanding area
of carsharing. The number of electric-powered vehicles
such as EVs and HEVs is sure to increase over the mid-
to long-term. For pure EVs, which do not contain an
internal combustion engine, the number of bearings
used per unit will likely decrease. On the other hand,
demand for in-vehicle motors will expand dramatically
in the continuing pursuit of safety, comfort, and
convenience. As the use of bearings will become more
sophisticated and performance requirements will
increase, 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 for
improving EV functionality that incorporate NSK’s core
technology. With products that make use of NSK’s
strengths, we will connect new needs generated by
technological innovation to business opportunities.
In addition, if society changes in such a way that car
sharing becomes the norm, then the scale of the
automobile industry will be greatly affected. We will see
a completely new way of mobility in cities, and everyone
will share cars with simple mechanisms such as EVs.
On the other hand, when it comes to long-distance
travel, drivers will want a car that they enjoy driving, and
one that is functional as well as appealing. In other
words, we may see the market diverge. NSK must take
advantage of having contact points with customers in all
directions and proceed with technological development
and technical proposals while fully understanding how
the automotive industry is changing. The risk is with our
relationship with players in the automotive industry,
such as GAFA, Uber, Didi Chuxing, which are
strengthening their position in automotive circles. We
must think about how we can consciously form points of
contact with these companies. Looking at the current
world of cyber technologies, which are becoming ever
more sophisticated with the evolution of IoT, AI, and 5G
communication, if these technologies become the
defining factors, then I believe this could be a weakness
in NSK’s business. However, in order to realize the
merits of cyber technology, the importance of physical
parts and their motion will no doubt come under the
spotlight. NSK’s core technology is used to give things
efficient and effective motion. Regardless of how good
the information and data are, if the mechanism of the
object that moves in response to the signal is remiss,
the level of satisfaction obtained from it will be low.
Rather than simply seeing this as a risk, from the
perspective of how to utilize various information and
data for movement, and how to make the movement
more satisfying, I think there is value in developing and
refining NSK’s core technology once again.
Looking at the competitive environment, Chinese
manufacturers have gone from strength to strength,
and Japanese companies as well as Western companies
in China have begun making use of such manufacturers.
The challenge for NSK, a company that is highly
regarded for its outstanding functionality and high
quality, will be a tough one. However, even if Chinese
manufacturers’ product quality improves, there is still a
large difference in terms of the accumulated analytical
power and expertise to derive causes and solutions
when problems occur in the market. NSK has the ability
to solve problems and provide technical proposals based
on the experience accumulated over our 103 years of
history. It will be difficult for competitors to emulate this.
On the other hand, NSK also has a chance to work and
partner with these companies.
Finally, the risk of a shrinking workforce due to the
declining birthrate and aging population will be
particularly noticeable in Japan and China. Even if there
are workers, there will be fewer people willing to work in
the machine component manufacturing industry. The
key within the next five to ten years will be our ability to
create production facilities, production processes and
plants that do not rely on people. In the 5th MTP, we
technology such as AI and IoT, we can raise expectations
worked on introducing NSK’s Smart Factories, and set
for NSK as the industry undergoes rapid technological
up model lines for both small-lot large variety
changes.
large-sized bearings, and mass-produced small-sized
bearings. In the future, we intend to work on developing
Under Vision 2026, which we established on the
these lines into 2nd and 3rd generations, expand the
occasion of our 100th anniversary, we declared our
number of lines this technology is used in, and expand
intent to set the future in motion. Looking back on the
this technology overseas.
100-year history of NSK, I believe we have undertaken
many ambitious initiatives and challenges in the past. In
becoming the first company to manufacture bearings in
Japan, we overcame one challenge after another.
Additionally, in the post-war economic development of
Japan, for example, we gave rise to a new era in motion
by developing bearings for the Shinkansen, which need
to withstand operating at speeds of over 300 km per
hour and bearings for VTRs requiring smooth rotation to
the utmost limit.
However, over the past 30 years or so, we have
become passive in our approach, and have not tried to
actively drive change. We need to have a strong
awareness of our new role in providing comprehensive
solutions that utilize Motion & ControlTM, the concept of
our business, to society.
As the speed of technological evolution accelerates,
we need to challenge ourselves in new fields with
innovative ideas, ask ourselves whether we can form
these ideas into a product, and speed up this process.
To that end, we are creating and working on a
development organization for new business areas that is
not bound by existing frameworks. In this context, we
value the attitude of challenging everything. In “NSK: 100
Years of Progress” published earlier this year, there is a
story from 1961, when NSK’s Fujisawa Technology
Center was established. The Company used the motto “It
doesn’t matter if you strike out. Challenge the unknown
without fear of failure.” to encourage the development of
new products. We need to reestablish this spirit and
tackle a range of new challenges. In terms of NSK’s
management stance, I believe we need to encourage
employees to step into the batter box, and not get angry
or be critical even if they “strike out.”
NSK’s Strengths
and Their Further Evolution
One of NSK’s strengths lies in its intangible assets–in
particular its people. The quality of our people will be
essential in order to respond to requests from
customers and the market. Not only in Japan, but also
in Europe, the United States, and China, people working
under the NSK brand are serious and are particular
about monozukuri. I know our employees take pride in
working for a world-leading manufacturer. Another
strength is our strong relationships with business
partners, such as customers, suppliers and distributors.
It is this relationship of trust that allows us to embark
on new challenges together in addition to profit-driven
initiatives such as cost or pricing. I think that this has
been cultivated across our history of more than 100
years.
NSK’s intellectual property: “Four Core
Technologies plus One.” We have added manufacturing
engineering to tribology, materials, numerical
simulation, and mechatronics, and position these as
NSK’s technical foundation. Our strengths lie in our
accumulated expertise in precision grinding and
assembly, heat treatment and other technologies. In
mechatronics technology, over the last 20 years we have
accumulated electronics technology and ECU software
design technology via our electric power steering
business.
Tribology is a technology that controls friction and
wear, but friction itself is a complex topic. Chinese
automakers are very skilled at manufacturing EVs, and
have put great efforts into this area. The management of
such automakers told me that looking ahead, they must
now look at how to deal with friction, which is something
they had not regarded up until now. It is necessary to
reduce or control friction as much as possible for EVs
too. If we can refine our core technologies and integrate
systems that take advantage of needed digital
NSK’s Value Creation Process
To Our Stakeholders
NSK’s Stance on ESG
NSK has put “protection of the global environment
through Motion & ControlTM” as part of its mission
statement, and has released many environmentally
friendly products that make full use of Four Core
Technologies plus One. On the other hand, natural
disasters caused by climate change are a frequent
occurrence across the world, and air, soil, and water
pollution problems are becoming more serious.
Environmental issues such as CO2 emissions and plastic
waste are also being put in the spotlight more and more.
Various regulations to ensure global environmental
conservation have been strengthened, and societal
demands that encourage companies to expand their
environmental efforts are increasing. Starting this year,
NSK has set the environment as a core value in addition
to safety, quality and compliance. In addition to
contributions through our products, we are also
implementing concrete measures to reduce the amount
of CO2 emissions caused by our manufacturing. Up until
now, we have focused on reducing the emissions per
production unit, but we have also declared that we will
work to reduce the absolute amount, and our goal is to
reduce current emissions by 60% by 2050. If we focus on
contributing to social value in the future, there will be
many areas that will incur costs. It is necessary to
prioritize such decisions from the top down, and to
proceed with a sense of urgency. Therefore, the
organizations responsible for environmental measures
are now under the direct control of the president.
Since 2014, we have been conducting an awareness
survey of our people–our most important assets–in
particular surveying the level of employee satisfaction.
Originally, it started as a compliance awareness survey,
but now the focus has shifted to employee engagement.
We aim to listen to the frank opinions of employees,
understand their awareness of our Mission Statement
and how much they empathize with Vision 2026. The
results of the survey are not only compared with
previous years, but also between organizations and job
types, as well as other group companies. For groups
that are found to have a large gap from where they want
to be or from the average, we will firstly work to improve
the quality and amount of communication, in
conjunction with the head of the organization. In
addition, we believe that understanding the actual
conditions and direction of the Company is what
underpins employee satisfaction, so we have increased
the number of opportunities to explain the MTP and
business results to employees. We obviously take safety
very seriously too. A place where employees can work
safely and with peace of mind is an important foundation.
We are also promoting diversity and inclusion.
Empowering women is one topic at the forefront of
current management issues. One of our KPIs is to
increase the ratio of female managers and candidates.
We are continuing to implement measures such as
training to achieve this, and we do not make adjustments
simply to meet our targets. It is critical that we provide
support for balancing work with childcare and nursing
care. Particularly when looking at the distribution of
our employees’ ages, we see that family care is an
issue that cannot be overlooked. We will provide
necessary support and measures so that employees
can continue working while being in a position to
provide nursing care. Furthermore, we live in an age
where acceptance of members of the LGBT (SOGI)
community at workplaces overseas is commonplace.
As a global company, NSK must work to catch up and
work on developing our awareness, culture, and
environment to be more accepting of diverse members
of society in Japan too. We will tackle the issues one by
one, such as those disadvantaged in the past by not
being aware of welfare systems and workplace
facilities. Moving on to persons with disabilities, further
innovation is necessary to provide more compatible
workplaces.
I believe that our level of governance has reached a
certain level of functionality under the Company with
Three Committees framework. We conduct evaluations
to check whether our Board of Directors is functioning
properly. To enhance the effectiveness of the Board of
Directors, a panel of external experts has conducted a
Board of Directors evaluation since 2015. In the 2018
results, we received an evaluation stating that the Board
of Directors had maintained a high level of effectiveness.
We have also made proactive efforts to respond to
Japan’s Corporate Governance Code. In the future I
employees have to recognize the company president as
think it is necessary to consider forming a Board of
a person. For example, a mere slogan such as that of
Directors with a majority of outside directors and
NSK’s core values, “Safety, Quality, Compliance,
changing the chairperson of the Board of Directors to a
Environment,” or Setting the Future in Motion as part of
non-executive director or an outside director. What is
Vision 2026, is not enough to keep a large organization
more important than the format is how we go about
like NSK going–the president needs to convey the
building a healthy and cooperative relationship between
thoughts and feelings behind it. It is important to listen
outside directors and internal directors. Lately outside
intently to the opinions of those who cannot honestly
directors have actively participated in site visits and
agree with your idea or direction, and to address these
executive meetings, and employees are more aware of
sincerely. However in reality, when you try doing this you
the presence of outside directors at NSK. This has led to
might find you cannot arrive at an answer immediately
the establishment of business plans and management
and are at a loss on how to react. Despite these
that take into account the presence of outside directors.
concerns, I believe it is important to step forward and
For example, we are building a framework for
engage in dialog. Even if I have to admit that I was wrong
accountability to aid directors with regard to matters
or that something I said was a mistake, I still think this
such as budget fidelity and operational risk
would be a good opportunity to show that it is okay to
management. I think it is very important to manage from
make mistakes. Also, as the president, I have the
the perspective of stakeholders, especially shareholders
opportunity to communicate with a range of people
and investors, rather than inward-looking discussion
outside of NSK. I think that it is the president’s
based on ways of thinking ingrained in our own company
responsibility to bring back the information and hints
or industry.
that I have obtained and share these within the
company–in other words, to strengthen the connection
between the outside and inside.
Environmentally friendly products
Compliance awareness survey
A place where employees can work safely
and with peace of mind
Promoting diversity and inclusion,
LGBT（SOGI）
PP. 50-51
A panel of external experts has conducted
a Board of Directors evaluation
P. 55
P. 47
P. 53
P. 48
Role of a Company President
It is the president’s role to set the direction of the
company, to determine strategies and plans as well as
their execution, and to take responsibility for the results
of these actions. There are no limits to the scope of
duties. The president needs to be the ultimate decision
maker for everything in the company and take full
responsibility for the results. There is no clear boundary
showing where a president’s responsibilities fall. I have
been the president of NSK for four years. As time goes
on, I feel the weight of my responsibility more and more.
One matter I find myself thinking a lot lately is the
importance of making my presence known both inside
and outside NSK. In a sense, I think that a company
president is a symbolic figure. Being the president is no
longer about sitting in the president’s office and giving
orders. I believe it is necessary to be on the shop floor
with everyone engaged in business, production, sales,
and design and development. It is important to show
everyone what the head of NSK looks like and what he
believes. In other words, to give the name a meaning,
Toward Sustainable Development
We have begun our 6th MTP. As a stepping stone to our
2026 Vision, we decided to create the plan based on the
changes likely to occur in society from a mid- to
long-term perspective and aim to establish a corporate
foundation that will enable sustainable growth. We will
set the next three years as a period of strengthening our
business base, under the two key policies of Operational
Excellence (constant pursuit of competitiveness) and
Challenging Innovation (creation of new value), focusing
on the three measures I outlined previously.
Right now there are numerous various social issues
around the world that need to be resolved. Furthermore
we are seeing major technological innovations with
digitization, AI, and CASE at the forefront. At NSK we
contribute to “sustainable” development of society by
providing “value” through collaborative creation with all
of our stakeholders, and positioning social development
and NSK’s growth on the same vector.
We thank you for your continuing support.
10
NSK REPORT 2019
NSK REPORT 2019
11
Looking Back on the 5th Mid-Term
Management Plan and Ahead to Our
Next Plan
Looking back over the three years of the 5th Mid-Term
Management Plan (MTP), the first year, 2016, saw many
defining events such as Brexit and the arrival of the
Trump administration. These two events led to changes
all over the world and continue to do so even now. China,
which had seen immense growth, made its presence
even clearer by announcing its “Belt and Road Initiative”
and “Made in China 2025.” The trade friction that arose
between the US and China drastically worsened the
business environment. At the same time, technological
innovation also accelerated. In the Automotive Business,
the Big Four Tech Companies (i.e. Google, Amazon,
Facebook, and Apple or “GAFA”), have arrived on the
scene, and a new business model, which adds
environmental awareness to the trends of CASE will
greatly alter technology in the future as well as the role
of automobiles in our society. In the Industrial
Machinery Business, to counter the declining labor force
in developed countries we have seen an evolution in
factory automation (FA) and labor-saving, supported by
technological advances such as Internet of Things (IoT)
technology, Artificial Intelligence (AI), robots, and 5G
communications. We have also seen an increase of
investment aiming for the urbanization of developing
countries, as well as advancement of environmental
countermeasures spurring on electrification.
Looking at NSK’s business results, amid strong
demand in 2017, the second year of the MTP, we
managed to achieve our goal of one trillion yen in sales
one year early by focusing on maximizing our output. We
also set a new record high for operating income and net
income. However, in the final year, the effect of the
US-China trade friction became apparent, and we saw a
worsening environment for the Industrial Machinery
Business and Automotive Business. There were
decreases in sales and profits, and the final year of the
plan ended in a year-on-year decrease in our
consolidated business results.
A future issue based on reviewing the 5th MTP is the
regeneration of the steering business. In next-generation
product development, we have now achieved the
technical performance levels we targeted, and we will
secure official orders as soon as possible to ensure our
re-growth scenario. Although we made significant
investment in automotive bearings, the fixed cost burden
is somewhat large amid the current situation where
global automobile production is at a standstill. Although
the market is expected to grow in the mid- to long-term,
we aim to establish a lean cost structure while paying
close attention to the current trends in the vehicle
production numbers. There was a very strong demand in
the Industrial Machinery Business from early 2017. We
put all our efforts into securing output to maximize our
sales opportunities. Although these efforts resulted in a
significant increase in sales and profits, our production
capacity could not keep up with the increase in demand,
which led to a reliance on extra staff to meet production
output. After identifying mid- to long-term trends in
demand during the 6th MTP, we will aim to optimize the
business structure, including our sector and customer
portfolio with an emphasis on growth fields, and
organization of production capacity. In addition, while
NSK as a whole has been continuously working to
improve operational efficiency and systematization, it is
necessary to further prepare for the new era of AI.
Based on these reflections and issues, the 6th MTP,
which was established in line with vision for 2026,
marking the 110th anniversary of NSK’s founding, is
now being continuously pursued by the two pillars set
forth in the 5th MTP. We will further evolve NSK by
strengthening our competitiveness through “Operational
Excellence” and continuing our policy of investing for the
future through “Challenging Innovation.” Positioning
these three years as a period of strengthening our
business base and resources for the next growth phase,
our focus is on measures in the short-term to achieve
“new initiatives targeting growth,” to “enhance
managerial resources,” and to “contribute to the
environment and society.”
The business and management environments are
very uncertain and unpredictable at the moment. Not
only is the conventional autonomous cycle of the
economy changing, but political trends which have a
major impact on the economy are also altering the
current situation. In such an environment, expressing
goals in absolute terms of sales and profits can serve to
mislead markets, and it would be irresponsible of us to
do so. A key focus NSK set for 2026 is to establish a
corporate foundation for sustainable growth. This does
not mean simply seeking sustainable growth itself, but
rather achieving growth while reducing the burden on
society as a whole, as well as on employees and
suppliers. This is what I mean when we use the word
“sustainable.” Sustainability is formed by the strength of
managerial resources such as people, technical
capabilities, organizational structure, and the
information that flows within this structure. Without this,
businesses cannot grow or produce profitability. We will
work to strengthen our managerial resources with a
heightened awareness of “sustainable” perspective. It is
important that in the 6th MTP we show the extent that
NSK will increase its market position and profitability,
and how much we will return to shareholders in the
context of overall economic growth and compared with
our competitors. We must then make efforts to produce
results in line with this.
Mid- to Long-Term Risks to NSK
and Countermeasures
Amid the current rapidly changing global situation,
looking at NSK’s current business scale and regional
portfolio, the weight of China stands out. This is the
result of our success in leveraging the high growth of
the Chinese economy, but at the same time it is also
becoming important that we manage country risk
soundly. In response to this, NSK has been focusing on
internalization in China for the past 10 years. Internally,
we have localized the top management of business
divisions and those responsible for functional divisions,
and from an external perspective, we invited Chinese
corporate management experts and university
professors to serve on an advisory board. With this, we
have incorporated views and opinions on society, politics
and the economy that are not bound by the boundaries
of companies and industries. Ultimately, we will aim for
a system in which our Chinese operations are fully run
by Chinese personnel.
We will also work to further improve our presence
in regions other than China. ASEAN is a region with
many Japanese companies as well as strong political
and economic connections. Another strategically critical
region is Europe. Europe is an important region because
it has very unique production facilities and industrial
machinery, as it focuses on the machine field and
machine parts. I would like to take steps to improve our
presence in Europe.
The second relates to automobiles, where EV and
autonomous driving stand at the forefront of
technological innovation, as well as the expanding area
of carsharing. The number of electric-powered vehicles
such as EVs and HEVs is sure to increase over the mid-
to long-term. For pure EVs, which do not contain an
internal combustion engine, the number of bearings
used per unit will likely decrease. On the other hand,
demand for in-vehicle motors will expand dramatically
in the continuing pursuit of safety, comfort, and
convenience. As the use of bearings will become more
sophisticated and performance requirements will
increase, 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 for
improving EV functionality that incorporate NSK’s core
technology. With products that make use of NSK’s
strengths, we will connect new needs generated by
technological innovation to business opportunities.
In addition, if society changes in such a way that car
sharing becomes the norm, then the scale of the
automobile industry will be greatly affected. We will see
a completely new way of mobility in cities, and everyone
will share cars with simple mechanisms such as EVs.
On the other hand, when it comes to long-distance
travel, drivers will want a car that they enjoy driving, and
one that is functional as well as appealing. In other
words, we may see the market diverge. NSK must take
advantage of having contact points with customers in all
directions and proceed with technological development
and technical proposals while fully understanding how
the automotive industry is changing. The risk is with our
relationship with players in the automotive industry,
such as GAFA, Uber, Didi Chuxing, which are
strengthening their position in automotive circles. We
must think about how we can consciously form points of
contact with these companies. Looking at the current
world of cyber technologies, which are becoming ever
more sophisticated with the evolution of IoT, AI, and 5G
communication, if these technologies become the
defining factors, then I believe this could be a weakness
in NSK’s business. However, in order to realize the
merits of cyber technology, the importance of physical
parts and their motion will no doubt come under the
spotlight. NSK’s core technology is used to give things
efficient and effective motion. Regardless of how good
the information and data are, if the mechanism of the
object that moves in response to the signal is remiss,
the level of satisfaction obtained from it will be low.
Rather than simply seeing this as a risk, from the
perspective of how to utilize various information and
data for movement, and how to make the movement
more satisfying, I think there is value in developing and
refining NSK’s core technology once again.
Looking at the competitive environment, Chinese
manufacturers have gone from strength to strength,
and Japanese companies as well as Western companies
in China have begun making use of such manufacturers.
The challenge for NSK, a company that is highly
regarded for its outstanding functionality and high
quality, will be a tough one. However, even if Chinese
manufacturers’ product quality improves, there is still a
large difference in terms of the accumulated analytical
power and expertise to derive causes and solutions
when problems occur in the market. NSK has the ability
to solve problems and provide technical proposals based
on the experience accumulated over our 103 years of
history. It will be difficult for competitors to emulate this.
On the other hand, NSK also has a chance to work and
partner with these companies.
Finally, the risk of a shrinking workforce due to the
declining birthrate and aging population will be
particularly noticeable in Japan and China. Even if there
are workers, there will be fewer people willing to work in
the machine component manufacturing industry. The
key within the next five to ten years will be our ability to
create production facilities, production processes and
plants that do not rely on people. In the 5th MTP, we
technology such as AI and IoT, we can raise expectations
worked on introducing NSK’s Smart Factories, and set
for NSK as the industry undergoes rapid technological
up model lines for both small-lot large variety
changes.
large-sized bearings, and mass-produced small-sized
bearings. In the future, we intend to work on developing
Under Vision 2026, which we established on the
these lines into 2nd and 3rd generations, expand the
occasion of our 100th anniversary, we declared our
number of lines this technology is used in, and expand
intent to set the future in motion. Looking back on the
this technology overseas.
100-year history of NSK, I believe we have undertaken
many ambitious initiatives and challenges in the past. In
becoming the first company to manufacture bearings in
Japan, we overcame one challenge after another.
Additionally, in the post-war economic development of
Japan, for example, we gave rise to a new era in motion
by developing bearings for the Shinkansen, which need
to withstand operating at speeds of over 300 km per
hour and bearings for VTRs requiring smooth rotation to
the utmost limit.
However, over the past 30 years or so, we have
become passive in our approach, and have not tried to
actively drive change. We need to have a strong
awareness of our new role in providing comprehensive
solutions that utilize Motion & ControlTM, the concept of
our business, to society.
As the speed of technological evolution accelerates,
we need to challenge ourselves in new fields with
innovative ideas, ask ourselves whether we can form
these ideas into a product, and speed up this process.
To that end, we are creating and working on a
development organization for new business areas that is
not bound by existing frameworks. In this context, we
value the attitude of challenging everything. In “NSK: 100
Years of Progress” published earlier this year, there is a
story from 1961, when NSK’s Fujisawa Technology
Center was established. The Company used the motto “It
doesn’t matter if you strike out. Challenge the unknown
without fear of failure.” to encourage the development of
new products. We need to reestablish this spirit and
tackle a range of new challenges. In terms of NSK’s
management stance, I believe we need to encourage
employees to step into the batter box, and not get angry
or be critical even if they “strike out.”
NSK’s Strengths
and Their Further Evolution
One of NSK’s strengths lies in its intangible assets–in
particular its people. The quality of our people will be
essential in order to respond to requests from
customers and the market. Not only in Japan, but also
in Europe, the United States, and China, people working
under the NSK brand are serious and are particular
about monozukuri. I know our employees take pride in
working for a world-leading manufacturer. Another
strength is our strong relationships with business
partners, such as customers, suppliers and distributors.
It is this relationship of trust that allows us to embark
on new challenges together in addition to profit-driven
initiatives such as cost or pricing. I think that this has
been cultivated across our history of more than 100
years.
NSK’s intellectual property: “Four Core
Technologies plus One.” We have added manufacturing
engineering to tribology, materials, numerical
simulation, and mechatronics, and position these as
NSK’s technical foundation. Our strengths lie in our
accumulated expertise in precision grinding and
assembly, heat treatment and other technologies. In
mechatronics technology, over the last 20 years we have
accumulated electronics technology and ECU software
design technology via our electric power steering
business.
Tribology is a technology that controls friction and
wear, but friction itself is a complex topic. Chinese
automakers are very skilled at manufacturing EVs, and
have put great efforts into this area. The management of
such automakers told me that looking ahead, they must
now look at how to deal with friction, which is something
they had not regarded up until now. It is necessary to
reduce or control friction as much as possible for EVs
too. If we can refine our core technologies and integrate
systems that take advantage of needed digital
NSK’s Value Creation Process
To Our Stakeholders
NSK’s Stance on ESG
NSK has put “protection of the global environment
through Motion & ControlTM” as part of its mission
statement, and has released many environmentally
friendly products that make full use of Four Core
Technologies plus One. On the other hand, natural
disasters caused by climate change are a frequent
occurrence across the world, and air, soil, and water
pollution problems are becoming more serious.
Environmental issues such as CO2 emissions and plastic
waste are also being put in the spotlight more and more.
Various regulations to ensure global environmental
conservation have been strengthened, and societal
demands that encourage companies to expand their
environmental efforts are increasing. Starting this year,
NSK has set the environment as a core value in addition
to safety, quality and compliance. In addition to
contributions through our products, we are also
implementing concrete measures to reduce the amount
of CO2 emissions caused by our manufacturing. Up until
now, we have focused on reducing the emissions per
production unit, but we have also declared that we will
work to reduce the absolute amount, and our goal is to
reduce current emissions by 60% by 2050. If we focus on
contributing to social value in the future, there will be
many areas that will incur costs. It is necessary to
prioritize such decisions from the top down, and to
proceed with a sense of urgency. Therefore, the
organizations responsible for environmental measures
are now under the direct control of the president.
Since 2014, we have been conducting an awareness
survey of our people–our most important assets–in
particular surveying the level of employee satisfaction.
Originally, it started as a compliance awareness survey,
but now the focus has shifted to employee engagement.
We aim to listen to the frank opinions of employees,
understand their awareness of our Mission Statement
and how much they empathize with Vision 2026. The
results of the survey are not only compared with
previous years, but also between organizations and job
types, as well as other group companies. For groups
that are found to have a large gap from where they want
to be or from the average, we will firstly work to improve
the quality and amount of communication, in
conjunction with the head of the organization. In
addition, we believe that understanding the actual
conditions and direction of the Company is what
underpins employee satisfaction, so we have increased
the number of opportunities to explain the MTP and
business results to employees. We obviously take safety
very seriously too. A place where employees can work
safely and with peace of mind is an important foundation.
We are also promoting diversity and inclusion.
Empowering women is one topic at the forefront of
current management issues. One of our KPIs is to
increase the ratio of female managers and candidates.
We are continuing to implement measures such as
training to achieve this, and we do not make adjustments
simply to meet our targets. It is critical that we provide
support for balancing work with childcare and nursing
care. Particularly when looking at the distribution of
our employees’ ages, we see that family care is an
issue that cannot be overlooked. We will provide
necessary support and measures so that employees
can continue working while being in a position to
provide nursing care. Furthermore, we live in an age
where acceptance of members of the LGBT (SOGI)
community at workplaces overseas is commonplace.
As a global company, NSK must work to catch up and
work on developing our awareness, culture, and
environment to be more accepting of diverse members
of society in Japan too. We will tackle the issues one by
one, such as those disadvantaged in the past by not
being aware of welfare systems and workplace
facilities. Moving on to persons with disabilities, further
innovation is necessary to provide more compatible
workplaces.
I believe that our level of governance has reached a
certain level of functionality under the Company with
Three Committees framework. We conduct evaluations
to check whether our Board of Directors is functioning
properly. To enhance the effectiveness of the Board of
Directors, a panel of external experts has conducted a
Board of Directors evaluation since 2015. In the 2018
results, we received an evaluation stating that the Board
of Directors had maintained a high level of effectiveness.
We have also made proactive efforts to respond to
Japan’s Corporate Governance Code. In the future I
think it is necessary to consider forming a Board of
Directors with a majority of outside directors and
changing the chairperson of the Board of Directors to a
non-executive director or an outside director. What is
more important than the format is how we go about
building a healthy and cooperative relationship between
outside directors and internal directors. Lately outside
directors have actively participated in site visits and
executive meetings, and employees are more aware of
the presence of outside directors at NSK. This has led to
the establishment of business plans and management
that take into account the presence of outside directors.
For example, we are building a framework for
accountability to aid directors with regard to matters
such as budget fidelity and operational risk
management. I think it is very important to manage from
the perspective of stakeholders, especially shareholders
and investors, rather than inward-looking discussion
based on ways of thinking ingrained in our own company
or industry.
Environmentally friendly products
Compliance awareness survey
A place where employees can work safely
and with peace of mind
Promoting diversity and inclusion,
LGBT（SOGI）
A panel of external experts has conducted
a Board of Directors evaluation
P. 47
P. 53
P. 48
PP. 50-51
employees have to recognize the company president as
a person. For example, a mere slogan such as that of
NSK’s core values, “Safety, Quality, Compliance,
Environment,” or Setting the Future in Motion as part of
Vision 2026, is not enough to keep a large organization
like NSK going–the president needs to convey the
thoughts and feelings behind it. It is important to listen
intently to the opinions of those who cannot honestly
agree with your idea or direction, and to address these
sincerely. However in reality, when you try doing this you
might find you cannot arrive at an answer immediately
and are at a loss on how to react. Despite these
concerns, I believe it is important to step forward and
engage in dialog. Even if I have to admit that I was wrong
or that something I said was a mistake, I still think this
would be a good opportunity to show that it is okay to
make mistakes. Also, as the president, I have the
opportunity to communicate with a range of people
outside of NSK. I think that it is the president’s
responsibility to bring back the information and hints
that I have obtained and share these within the
company–in other words, to strengthen the connection
between the outside and inside.
P. 55
Toward Sustainable Development
We have begun our 6th MTP. As a stepping stone to our
2026 Vision, we decided to create the plan based on the
changes likely to occur in society from a mid- to
long-term perspective and aim to establish a corporate
foundation that will enable sustainable growth. We will
set the next three years as a period of strengthening our
business base, under the two key policies of Operational
Excellence (constant pursuit of competitiveness) and
Challenging Innovation (creation of new value), focusing
on the three measures I outlined previously.
Right now there are numerous various social issues
around the world that need to be resolved. Furthermore
we are seeing major technological innovations with
digitization, AI, and CASE at the forefront. At NSK we
contribute to “sustainable” development of society by
providing “value” through collaborative creation with all
of our stakeholders, and positioning social development
and NSK’s growth on the same vector.
We thank you for your continuing support.
Role of a Company President
It is the president’s role to set the direction of the
company, to determine strategies and plans as well as
their execution, and to take responsibility for the results
of these actions. There are no limits to the scope of
duties. The president needs to be the ultimate decision
maker for everything in the company and take full
responsibility for the results. There is no clear boundary
showing where a president’s responsibilities fall. I have
been the president of NSK for four years. As time goes
on, I feel the weight of my responsibility more and more.
One matter I find myself thinking a lot lately is the
importance of making my presence known both inside
and outside NSK. In a sense, I think that a company
president is a symbolic figure. Being the president is no
longer about sitting in the president’s office and giving
orders. I believe it is necessary to be on the shop floor
with everyone engaged in business, production, sales,
and design and development. It is important to show
everyone what the head of NSK looks like and what he
believes. In other words, to give the name a meaning,
10
NSK REPORT 2019
NSK REPORT 2019
11
NSK’s Value Creation Process
NSK’s Value Creation Model
In its mission statement, NSK declares its aims of realizing a
“safer, smoother society” and protecting the global environment
through MOTION & CONTROL™. Under this philosophy, we set out
NSK Vision 2026 and intend to realize our mid-term goals and
establish corporate fundamentals that will enable sustainable
growth while continuing to create value. We also believe that the
value created by NSK will lead to contributions to the goals for
2030 for which the SDGs are aiming.
NSK Mission Statement
NSK Vision 2026
Contribution to Resolving
Social Issues
Safer and smoother society
Protection of the global environment
NSK’s Value Created
Customers
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
NSK’s business model for creating value consists of the core values of
“safety, quality, compliance, and environment” that support the value
chain (NSK’s business activities), from R&D to manufacturing, sales,
Employees
and feedback. Possessing “core technologies cultivated over 100 years
of history,” “a global and wide-ranging business foundation,” and
“CSR/ESG management” for tackling social issues autonomously as
the drivers, we are working to strengthen our value chain and improve
our output and outcomes. We are also promoting four initiatives to
maintain and enhance these in a sustainable manner.
Contribution to an advanced technological society
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Local
Communities
Future
Generations
Suppliers
Shareholders
and
Investors
NSK’s Seven Key SDGs
Diverse Capital and Inputs
NSK’s Value Creation Model
Mechanism to Convert Social Issues and Stakeholder Needs into New Value
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 plus One
●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
Natural Capital
● Minerals (iron ore, coal,
etc.), water, energy
Production sites (plants)
Japan: 20
Overseas: 44
R&D centers
At 16 locations
in 10 countries
Ratio of new employees
with science backgrounds
(annual average over the past five years)
76.7％
Number of employees
worldwide (consolidated)
31,484
Employee development
expenditure per person
(non-consolidated)
Approx. ¥86,000
Total equity
グローバル従業員数
¥560.4 billion
Interest-bearing debt
¥274.8 billion
Cash and cash equivalents
¥130.0 billion
Number of customer
inquiries to
NSK salespeople
5,776 cases/year
Energy input (per year)
17,224TJ
(As of March 31, 2019)
Value Chain
Feedback
Sales/
Aftermarket
Global and Wide-Ranging
Business Foundation
P. 44
Receipt of Orders
R&D
Manufacturing
Core Technologies Cultivated
over 100 years of History
PP. 4, 42
Procurement
Mass Production
Design/
Preparation
CSR/ESG Management
P. 24
Safety
P. 48
Quality
P. 49
Core Values
Core Values
Core Values
Core Values
Compliance
P. 53
Environment
P. 46
Initiatives to Increase Sustainability
Deepening of Value Chain
Strengthening of Sustainable Systems
P. 14
Risk Management
Response to Risks That Affect Value Creation
P. 36
Creating Value with Stakeholders
Strengthening of Relationships with Stakeholders
P. 34
Build a Business Base and
Strengthen Resources
Toward 2026 (The 6th Mid-Term Management Plan)
PP. 22, 26, 28
Financial Outcomes from
Provision of Added Value
0.37 (0.60 in the previous fiscal year)
*For more information on the lost-worktime
injury rate, please see P. 48.
Products/Services
● Industrial Machinery
● Precision Machinery and
Bearings
Parts
● Automotive Bearings
● Automotive Components
● Maintenance & Repair,
Aftermarket Services
● 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 and inclusion
● Improvement of compliance
awareness
● Compliance with varying
regulations in each country
(e.g., avoiding use of conflict minerals,
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. 91 million
Number of patents held
7,499 patents
(6,987 patents in the previous fiscal year)
Cash flow from operating activities
¥92.6 billion
Dividends/Payout ratio
¥20.7 billion/37.2％
Lost-worktime injury
frequency rate* (global)
Diversity (global)
Ratio of female
employees 19.1％
(17.6% in the previous fiscal year)
Japan Management College
Total number of graduates
over all 18 college terms: 333
Global Management College
Total number of graduates
over all 8 college terms: 99
Number of regions:
Graduates from 20 countries
*For more information about the Japan
Management College and the Global
Management College, please see P. 51.
Number of employees who
have attained a TOEIC
score of 730 or higher
563 (536 in the previous fiscal year)
Development of environmentally
friendly products
226 products (cumulative total)
GHG emissions per
production unit
13.8％ decrease (Japan)
(-14.5% in the previous fiscal year)
21.7％ decrease
(excluding Japan)
(-26.1% 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%).
12
NSK REPORT 2019
NSK REPORT 2019
13
NSK’s Value Creation Process
NSK’s Value Creation Model
In its mission statement, NSK declares its aims of realizing a
“safer, smoother society” and protecting the global environment
through MOTION & CONTROL™. Under this philosophy, we set out
NSK Vision 2026 and intend to realize our mid-term goals and
establish corporate fundamentals that will enable sustainable
growth while continuing to create value. We also believe that the
value created by NSK will lead to contributions to the goals for
2030 for which the SDGs are aiming.
Contribution to Resolving
Social Issues
Safer and smoother society
Protection of the global environment
NSK Mission Statement
NSK Vision 2026
NSK’s Value Created
Customers
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
Employees
Contribution to an advanced technological society
Realization of a more prosperous society
Suppliers
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
NSK’s Seven Key SDGs
Shareholders
and
Investors
Local
Communities
Future
Generations
NSK’s business model for creating value consists of the core values of
“safety, quality, compliance, and environment” that support the value
chain (NSK’s business activities), from R&D to manufacturing, sales,
and feedback. Possessing “core technologies cultivated over 100 years
of history,” “a global and wide-ranging business foundation,” and
“CSR/ESG management” for tackling social issues autonomously as
the drivers, we are working to strengthen our value chain and improve
our output and outcomes. We are also promoting four initiatives to
maintain and enhance these in a sustainable manner.
Diverse Capital and Inputs
NSK’s Value Creation Model
Mechanism to Convert Social Issues and Stakeholder Needs into New Value
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 plus One
●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
Natural Capital
● Minerals (iron ore, coal,
etc.), water, energy
Production sites (plants)
Japan: 20
Overseas: 44
R&D centers
At 16 locations
in 10 countries
Ratio of new employees
with science backgrounds
(annual average over the past five years)
76.7％
Number of employees
worldwide (consolidated)
31,484
Employee development
expenditure per person
(non-consolidated)
Approx. ¥86,000
Total equity
グローバル従業員数
¥560.4 billion
Interest-bearing debt
¥274.8 billion
Cash and cash equivalents
¥130.0 billion
Number of customer
inquiries to
NSK salespeople
5,776 cases/year
Energy input (per year)
17,224TJ
(As of March 31, 2019)
Value Chain
Feedback
Sales/
Aftermarket
Global and Wide-Ranging
Business Foundation
P. 44
Core Technologies Cultivated
over 100 years of History
PP. 4, 42
R&D
Receipt of Orders
Mass Production
Design/
Preparation
Procurement
Manufacturing
CSR/ESG Management
P. 24
Safety
P. 48
Quality
P. 49
Core Values
Core Values
Core Values
Core Values
Compliance
P. 53
Environment
P. 46
Initiatives to Increase Sustainability
Deepening of Value Chain
Strengthening of Sustainable Systems
P. 14
Risk Management
Response to Risks That Affect Value Creation
P. 36
Creating Value with Stakeholders
Strengthening of Relationships with Stakeholders
P. 34
Build a Business Base and
Strengthen Resources
Toward 2026 (The 6th Mid-Term Management Plan)
PP. 22, 26, 28
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 and inclusion
● Improvement of compliance
awareness
● Compliance with varying
regulations in each country
(e.g., avoiding use of conflict minerals,
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. 91 million
Number of patents held
7,499 patents
(6,987 patents in the previous fiscal year)
Cash flow from operating activities
¥92.6 billion
Dividends/Payout ratio
¥20.7 billion/37.2％
Lost-worktime injury
frequency rate* (global)
0.37 (0.60 in the previous fiscal year)
*For more information on the lost-worktime
injury rate, please see P. 48.
Diversity (global)
Ratio of female
employees 19.1％
(17.6% in the previous fiscal year)
Japan Management College
Total number of graduates
over all 18 college terms: 333
Global Management College
Total number of graduates
over all 8 college terms: 99
Number of regions:
Graduates from 20 countries
*For more information about the Japan
Management College and the Global
Management College, please see P. 51.
Number of employees who
have attained a TOEIC
score of 730 or higher
563 (536 in the previous fiscal year)
Development of environmentally
friendly products
226 products (cumulative total)
GHG emissions per
production unit
13.8％ decrease (Japan)
(-14.5% in the previous fiscal year)
21.7％ decrease
(excluding Japan)
(-26.1% 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%).
12
NSK REPORT 2019
NSK REPORT 2019
13
NSK’s Value Creation Process
NSK’s Business Activities and Corporate Value Creation (Deepening of Value Chain)
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.
Value Chain
Feedback
Sales/
Aftermarket
Global and Wide-ranging
Business Foundation
Core Technologies Cultivated
over 100 years of History
Manufacturing
R&D
Receipt of Orders
Mass Production
Design/
Preparation
Procurement
Each business division headquarters maintains its own
production, sales and technology units that take responsibility for
the entire 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
encompassing R&D, manufacturing, sales and feedback underpinned by
its core values: safety, quality, compliance and the environment.
Value Chain
CSR/ESG Management
Safety
Quality
Core Values
Core Values
Core Values
Core Values
Compliance
Environment
R&D
Receipt of
Orders
Mass
Production
Design/
Preparation
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 a key to acquiring new projects.
In principle, products are manufactured once orders are received, rather than in anticipation of orders.
Manufacturing
capital
Intellectual
capital
Human
capital
Financial
capital
Social/
Relationship
capital
Natural
capital
Procurement
Manufacturing
Sales/
Aftermarket
Feedback
Our Four Core Technologies plus One are tribology,
materials, numerical simulation, mechatronics
and manufacturing engineering (see p. 42).
R&D covers a wide range of fields including
fundamental research, advanced development,
application development and manufacturing
engineering. NSK’s R&D activities lead to the
creation of new products, technologies and
businesses.
Having worked together to ascertain customer
needs and social needs, sales and technology
divisions then make technical proposals and
demonstrations that culminate in the receipt of
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.
Based on the specifications determined by the
development and design departments, activities
to procure the raw materials/components used
in products, production facilities, sub-materials,
etc. The Company realizes high-level QCD and
stable procurement through fair, impartial,
transparent and socially and environmentally
friendly transactions with its suppliers.
The manufacture of products takes place at the NSK
Group’s manufacturing plants. A wide range of business
collaborations, including in manufacturing, quality
assurance, manufacturing engineering/equipment
management, production control, plant accounting and
general affairs work, is necessary to ensure stringent
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
management concerning quality, cost and delivery (QCD).
customers is reflected in production plan reviews,
Both the Industrial Machinery Business and the Automotive
inventory management, product improvements and
Business maintain their own manufacturing plants.
the development of new products.
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t
u
p
n
I
y
e
K
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,
●Mass production equipment preparation, capital
intellectual and human capital)
●Strong relationships of trust with customers
(social/relationship capital)
●Sales capabilities (human capital)
●Technical proposal capabilities (intellectual and human capital)
●NSK brand recognition (social/relationship capital), etc.
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 plus One, 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 collaborations 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).
●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.
o
t
d
e
s
s
e
r
d
d
A
g
n
e
B
s
k
s
a
T
i
i
n
a
h
C
e
u
l
a
V
e
h
t
n
e
p
e
e
D
●Establishment and promotion of proactive R&D
●Based on changing customer and
themes for rapid technological changes in the world
(electrification, automation, IoT, the environment)
●Utilization of open innovation
●Improvement of development and evaluation
efficiency by utilizing AI and simulation
●Improvement of “plus One = manufacturing
engineering” that emphasizes and optimizes quality
from the development stage
●Training and retention of engineers to hand down
and evolve Four Core Technologies
●Development of technologies and products to
contribute to protection of the global
environment/CO2 reduction
social needs, improvement in the level
of proposal capabilities utilizing
existing and newly developed
technologies
●Supply proposals from optimal
locations that make use of global
production sites
●Maintaining relationships of trust and
proposal/provision of value/services in
new styles that go beyond conventional
methods
●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.
●NSK has a framework in place to manage the
entire process, from order receipt to the mass
production launch. In accordance with that
framework, detailed inspection and confirmation
of specifications, quality, and cost are performed
at each process milestone (NPDS).
●NSK works to improve profitability through
timely and cost-conscious preparations, from
product design to mass production.
●Utilization of core assets (capitalized
differentiation technology) aimed at
streamlining mass production design and
reducing lead times
●Equipment and process settings to achieve
stable mass production quality and reduced
workload
●Ascertainment of required quality level of
markets (end users) and reflection in products
●Improvement of development and evaluation
efficiency by utilization of AI and simulation
●Installation of mass production equipment
that contributes to global environmental
protection and CO2 reduction
●Relationships of trust and coordination
with suppliers (social/relationship
●Production plants and facilities (manufacturing capital)
●Various manufacturing engineering, accumulated know-how
●Human resources to undertake production, sales
and inventory (PSI) management (human capital)
capital)
(intellectual capital)
●Development purchasing (intellectual and
●Production technical skills (human capital)
human capital)
●Buyer skills (human capital)
●Suppliers and local communities (social/relationship capital)
●Steel used as a raw material, components, oil, electric power
and water (natural capital, manufacturing capital), etc.
●Aftermarket service distribution channels
(customers, distributors and sales outlets), etc.
(social/relationship capital)
●Production-related survey and analytical data
(intellectual capital), etc.
●NSK continuously maintains and strengthens
●Operating 20 plants in Japan and 44 plants
●NSK responds quickly and meticulously through its global
favorable and strong relationships with its suppliers.
overseas, NSK possesses a production system
sales network (118 locations).
able to meet global demand in a timely
manner.
●NSK aims to maintain appropriate levels of inventory and
undertakes strict inventory controls with advanced PSI
●As mother plants, some of the plants both in
management.
●NSK achieves a high level of QCD through
continuous improvement activities and joint
development in collaboration with suppliers.
●NSK has a structure that enables in-house
development, manufacturing as well as
procurement of facilities and equipment within the
Group.
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
●NSK is strengthening its tolerance to foreign
exchange rate fluctuations by expanding localization
conducted at each plant on an ongoing basis to
improve workplace processes. More overseas
of procurement.
●In the event of, for example, a natural disaster, the
Company has in place a system to quickly ascertain
the damage status and supplier problems and take
the necessary measures in cooperation with them.
●NSK promotes CSR activities throughout the supply
chain toward the realization of a sustainable society.
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.
●Stable procurement (ensuring flexibility of
●Improvement of productivity using IoT
supply, strengthening effectiveness of
(smart factory, next-generation line
supply chain BCP)
development, etc.)
●Optimization of supplier portfolio
(thorough collaboration and competitive
●Strengthening the effectiveness of BCP in
production (strengthening building and
principles)
●Improvement in level of CSR management
throughout the supply chain
●Reduce environmental impact throughout
the value chain (appropriate management
of environmentally hazardous substances,
global warming countermeasures)
equipment tolerance, improving
complementary supply capacity)
●Training and retention of human resources
to hand down and evolve monozukuri,
creation of comfortable workplaces
●Shift to production facilities and production
processes that contribute to global
environmental conservation and CO2
reduction
●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
●Feedback is used to improve products and propose solutions
maintenance.
with new technologies.
●Design and development that leverages
customer and market field data
●Ongoing strengthening of efforts to reduce
the environmental impact of logistics
●Building of supply chain that can respond
rapidly to demand fluctuations
●Further improvement in customer
satisfaction (strengthening of channel
management, cultivating specialists)
14
NSK REPORT 2019
NSK REPORT 2019
15
NSK’s Value Creation Process
NSK’s Business Activities and Corporate Value Creation (Deepening of Value Chain)
Value Chain
Feedback
Sales/
Aftermarket
Global and Wide-ranging
Core Technologies Cultivated
Business Foundation
over 100 years of History
Manufacturing
R&D
Receipt of Orders
Mass Production
Design/
Preparation
Procurement
CSR/ESG Management
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 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
encompassing R&D, manufacturing, sales and feedback underpinned by
its core values: safety, quality, compliance and the environment.
Value Chain
Safety
Quality
Core Values
Core Values
Core Values
Core Values
Compliance
Environment
Mass
Production
Design/
Preparation
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 a key to acquiring new projects.
In principle, products are manufactured once orders are received, rather than in anticipation of orders.
Manufacturing
capital
Intellectual
capital
Human
capital
Financial
capital
Social/
Relationship
capital
Natural
capital
R&D
Receipt of
Orders
Procurement
Manufacturing
Sales/
Aftermarket
Feedback
Our Four Core Technologies plus One are tribology,
materials, numerical simulation, mechatronics
and manufacturing engineering (see p. 42).
R&D covers a wide range of fields including
fundamental research, advanced development,
application development and manufacturing
engineering. NSK’s R&D activities lead to the
creation of new products, technologies and
businesses.
Having worked together to ascertain customer
needs and social needs, sales and technology
divisions then make technical proposals and
demonstrations that culminate in the receipt of
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.
orders. The timing of orders received, lead times and
Mass production preparation involves the setting up of
other aspects of order-taking activities depend on
the customer’s business, products and components
used. For global products, the sales divisions
processes and production equipment at mass
production plants once specifications have been
finalized. In many cases, customer approval is required
coordinate with the relevant sites in other countries.
for product specifications, equipment and processes.
Based on the specifications determined by the
development and design departments, activities
to procure the raw materials/components used
in products, production facilities, sub-materials,
etc. The Company realizes high-level QCD and
stable procurement through fair, impartial,
transparent and socially and environmentally
friendly transactions with its suppliers.
The manufacture of products takes place at the NSK
Group’s manufacturing plants. A wide range of business
collaborations, 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
I
y
e
K
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,
●Mass production equipment preparation, capital
intellectual and human capital)
●Strong relationships of trust with customers
(social/relationship capital)
●Sales capabilities (human capital)
investment (manufacturing capital)
●Design engineers (human capital)
●Accumulation of a wide variety of technologies
(intellectual capital)
●Technical proposal capabilities (intellectual and human capital)
●Technology centers, R&D sites (intellectual capital)
●NSK brand recognition (social/relationship capital), etc.
●NIT (intellectual and human capital), etc.
●Relationships of trust and coordination
with suppliers (social/relationship
capital)
●Development purchasing (intellectual and
human capital)
●Buyer skills (human capital)
●Production plants and facilities (manufacturing capital)
●Various manufacturing engineering, accumulated know-how
●Human resources to undertake production, sales
and inventory (PSI) management (human capital)
(intellectual capital)
●Production technical skills (human capital)
●Suppliers and local communities (social/relationship capital)
●Steel used as a raw material, components, oil, electric power
and water (natural capital, manufacturing capital), etc.
●Aftermarket service distribution channels
(customers, distributors and sales outlets), etc.
(social/relationship capital)
●Production-related survey and analytical data
(intellectual capital), etc.
●NSK’s strengths are in its ability to solve complex
technological problems based on our Four Core
●NSK has internal systems that support
tight-knit communications between
Technologies plus One, the breadth of talented technical
staff and accumulated technologies gained through deep
customers and the Company’s
engineering and sales staff.
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 collaborations and joint development with
our customers, suppliers and external research
institutions in its product development (e.g., steel
materials, grease, motors, electronic control units
●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).
●Global Account Managers (GAMs) and
Key Account Managers (KAMs) work
together on project requirements.
●NSK focuses on high-quality,
●NSK has a global network of technology centers.
environmentally friendly products that
●NSK has systematic education programs and educational
are trusted by customers.
institutions, including the NSK Institute of Technology
(NIT), for the training and strengthening of its technical
[ECUs]).
staff.
o
t
d
e
s
s
e
r
d
d
A
g
n
i
e
B
s
k
s
a
T
n
i
a
h
C
e
u
l
a
V
e
h
t
n
e
p
e
e
D
●Establishment and promotion of proactive R&D
●Based on changing customer and
themes for rapid technological changes in the world
social needs, improvement in the level
(electrification, automation, IoT, the environment)
●Utilization of open innovation
●Improvement of development and evaluation
efficiency by utilizing AI and simulation
●Improvement of “plus One = manufacturing
of proposal capabilities utilizing
existing and newly developed
technologies
●Supply proposals from optimal
locations that make use of global
engineering” that emphasizes and optimizes quality
production sites
from the development stage
●Training and retention of engineers to hand down
and evolve Four Core Technologies
●Maintaining relationships of trust and
proposal/provision of value/services in
new styles that go beyond conventional
●Development of technologies and products to
methods
contribute to protection of the global
environment/CO2 reduction
●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.
●NSK has a framework in place to manage the
entire process, from order receipt to the mass
production launch. In accordance with that
framework, detailed inspection and confirmation
of specifications, quality, and cost are performed
at each process milestone (NPDS).
●NSK works to improve profitability through
timely and cost-conscious preparations, from
product design to mass production.
●Utilization of core assets (capitalized
differentiation technology) aimed at
streamlining mass production design and
reducing lead times
●Equipment and process settings to achieve
stable mass production quality and reduced
workload
●Ascertainment of required quality level of
markets (end users) and reflection in products
●Improvement of development and evaluation
efficiency by utilization of AI and simulation
●Installation of mass production equipment
that contributes to global environmental
protection and CO2 reduction
●NSK continuously maintains and strengthens
favorable and strong relationships with its suppliers.
●NSK achieves a high level of QCD through
continuous improvement activities and joint
development in collaboration with suppliers.
●NSK has a structure that enables in-house
development, manufacturing as well as
procurement of facilities and equipment within the
Group.
●NSK is strengthening its tolerance to foreign
exchange rate fluctuations by expanding localization
of procurement.
●In the event of, for example, a natural disaster, the
Company has in place a system to quickly ascertain
the damage status and supplier problems and take
the necessary measures in cooperation with them.
●NSK promotes CSR activities throughout the supply
chain toward the realization of a sustainable society.
●Operating 20 plants in Japan and 44 plants
●NSK responds quickly and meticulously through its global
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.
sales network (118 locations).
●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.
●Stable procurement (ensuring flexibility of
supply, strengthening effectiveness of
supply chain BCP)
●Optimization of supplier portfolio
(thorough collaboration and competitive
principles)
●Improvement in level of CSR management
throughout the supply chain
●Reduce environmental impact throughout
the value chain (appropriate management
of environmentally hazardous substances,
global warming countermeasures)
●Improvement of productivity using IoT
(smart factory, next-generation line
development, etc.)
●Strengthening the effectiveness of BCP in
production (strengthening building and
equipment tolerance, improving
complementary supply capacity)
●Training and retention of human resources
to hand down and evolve monozukuri,
creation of comfortable workplaces
●Shift to production facilities and production
processes that contribute to global
environmental conservation and CO2
reduction
●Design and development that leverages
customer and market field data
●Ongoing strengthening of efforts to reduce
the environmental impact of logistics
●Building of supply chain that can respond
rapidly to demand fluctuations
●Further improvement in customer
satisfaction (strengthening of channel
management, cultivating specialists)
14
NSK REPORT 2019
NSK REPORT 2019
15
NSK’s Value Creation Process
Financial and Non-Financial Highlights
Eleven-Year Summary
NSK Ltd. and Consolidated Subsidiaries
Years ended March 31
Financial
Data
Sales
[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
Data
Number of employees worldwide (persons)
Number of employees outside Japan (persons)
Number of employees: non-consolidated (persons)*2
Ratio of female employees (Japan) (%)
Total waste (×104 t)*3
Greenhouse gas emissions (×104 t-CO2 equivalent)*3
Number of environmentally friendly products (cumulative)
Per Share
Data (Yen)
Earnings (Net income)
Equity attributable to owners of the parent
(Shareholders’ equity)
Cash dividends*4
JP-GAAP up to and including the fiscal year ended March 31, 2015,
IFRS from the fiscal year ended March 31, 2016, onward.
2009
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
2010
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
2011
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
2012
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
Net D/E ratio (times)
Total return ratio (%)*5
Dividend payout ratio (%)
Financial
Indices
Operating income margin (%)
Return on average assets (ROA) (%)
Ratio of net worth to total capital (%)
Return on average shareholders’ equity (ROE) (%)
12.0
6.1
10.6
3.5
33.2
0.58
22.7
22.7
637
12.1
1.2
1.9
79.02
109.40
*1 In accordance with segment changes in the business domains (part of operations transferred from the Industrial Machinery Business to the Automotive
*2 Figures of a subsidiary merged in the fiscal year ended March 31, 2017 are included in the compilation.
*3 Data of total waste and greenhouse gas emissions up to and including the fiscal year ended March 31, 2010 are compiled only for Japan; after the fiscal
*4 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
*5 Total return ratio = (Dividends paid + Acquisition of treasury shares) ÷ Net income attributable to owners of the parent.
11.0
6.1
10.3
3.3
32.6
0.60
22.8
22.8
717
14.8
1.5
1.5
85.63
112.92
14.0
3.4
1.8
0.6
31.4
0.85
165.9
165.9
377
44.7
0.9
3.7
100.74
144.47
8.0
1.9
2.0
0.6
31.4
0.73
90.7
90.7
738
83.7
1.6
1.1
92.83
130.89
Price book-value ratio (PBR) (times)
Price earnings ratio (PER) (times)
Period-end share price (yen)
Exchange
Rate Data
Dividend yield (%)
US$1
€1
2013
2014
2015
2016
2017
Millions of yen (Financial data)
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
83.10
107.14
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
359,201
1,000,932
315,532
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
100.24
134.37
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
7.0
20.6
99.1
211
34.0
9.2
14.3
6.1
44.0
0.23
28.0
28.0
1,030
8.5
1.2
3.3
120.14
132.58
949,170
226,924
696,271
25,974
330,512
165,177
121,920
331,559
201,185
130,373
65,341
－
45,560
58,602
43,354
13,858
67,936
(54,243)
13,692
20,174
14,999
461,350
1,043,955
267,399
31,501
20,210
7,585
10.7
21.1
99.1
219
86.08
873.11
38.0
6.9
9.9
4.4
44.2
0.28
44.1
77.1
1,592
18.5
1.8
2.4
108.42
118.84
2018
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
－
10.5
22.4
99.7
224
40.0
9.6
13.9
6.5
49.2
0.22
30.5
30.5
1,426
10.9
1.4
2.8
110.86
129.70
2019
991,365
269,974
689,658
31,732
367,537
157,581
130,127
336,119
194,994
141,124
79,279
－
55,809
81,102
48,801
19,023
92,617
(72,673)
19,943
20,737
19,999
10.6
23.0
97.8
226
40.0
8.0
10.4
5.1
49.4
0.27
37.2
73.1
1,037
9.7
1.0
3.9
110.91
128.40
456,046
1,129,164
326,400
31,088
20,052
6,294
454,661
1,032,374
278,152
31,587
20,296
6,278
537,175
1,092,310
250,908
31,861
20,254
7,726
536,676
1,086,456
274,780
31,484
19,729
7,892
114.56
842.69
121.38
839.56
131.16
1,016.30
107.46
1,048.18
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
6.9
20.1
96.8
202
28.0
10.0
15.3
5.8
40.4
0.31
24.4
24.4
1,758
15.3
2.1
1.6
109.93
138.77
Business), data from the fiscal year ended March 31, 2016 onward, are presented under the new categories.
year ended March 31, 2011 onward data are compiled on a global basis.
share dividend to commemorate the 100th anniversary of the Company’s founding.
16
NSK REPORT 2019
NSK REPORT 2019
17
NSK’s Value Creation Process
Financial and Non-Financial Highlights
Eleven-Year Summary
NSK Ltd. and Consolidated Subsidiaries
Years ended March 31
Financial
Data
Sales
[By segment]*1
Industrial Machinery Business
Automotive Business
Others / Adjustments
[By region]
Japan
(Based on
customer location)
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 employees outside Japan (persons)
Number of employees: non-consolidated (persons)*2
Ratio of female employees (Japan) (%)
Total waste (×104 t)*3
Greenhouse gas emissions (×104 t-CO2 equivalent)*3
Number of environmentally friendly products (cumulative)
Per Share
Data (Yen)
Earnings (Net income)
Equity attributable to owners of the parent
Financial
Indices
(Shareholders’ equity)
Cash dividends*4
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 (%)*5
Period-end share price (yen)
Price earnings ratio (PER) (times)
Price book-value ratio (PBR) (times)
Dividend yield (%)
2009
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
100.74
144.47
2010
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
2011
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
2012
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
12.0
6.1
10.6
3.5
33.2
0.58
22.7
22.7
637
12.1
1.2
1.9
458.65
48.30
475.45
52.75
518.56
*1 In accordance with segment changes in the business domains (part of operations transferred from the Industrial Machinery Business to the Automotive
*2 Figures of a subsidiary merged in the fiscal year ended March 31, 2017 are included in the compilation.
*3 Data of total waste and greenhouse gas emissions up to and including the fiscal year ended March 31, 2010 are compiled only for Japan; after the fiscal
*4 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
*5 Total return ratio = (Dividends paid + Acquisition of treasury shares) ÷ Net income attributable to owners of the parent.
92.83
130.89
85.63
112.92
79.02
109.40
Exchange
Rate Data
US$1
€1
16
NSK REPORT 2019
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)
2013
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
2014
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
359,201
1,000,932
315,532
30,454
19,231
6,310
6.6
19.2
93.9
190
57.70
664.74
2015
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
456,046
1,129,164
326,400
31,088
20,052
6,294
6.9
20.1
96.8
202
114.56
842.69
2016
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
2017
949,170
226,924
696,271
25,974
330,512
165,177
121,920
331,559
201,185
130,373
65,341
－
45,560
58,602
43,354
13,858
67,936
(54,243)
13,692
20,174
14,999
461,350
1,043,955
267,399
31,501
20,210
7,585
10.7
21.1
99.1
219
86.08
873.11
11.0
4.4
5.2
1.8
36.2
0.51
37.7
37.7
715
24.5
1.2
1.5
83.10
107.14
38.0
6.9
9.9
4.4
44.2
0.28
44.1
77.1
1,592
18.5
1.8
2.4
108.42
118.84
Business), data from the fiscal year ended March 31, 2016 onward, are presented under the new categories.
28.0
10.0
15.3
5.8
40.4
0.31
24.4
24.4
1,758
15.3
2.1
1.6
109.93
138.77
34.0
9.2
14.3
6.1
44.0
0.23
28.0
28.0
1,030
8.5
1.2
3.3
120.14
132.58
16.0
7.8
9.2
3.3
35.9
0.41
27.7
27.7
1,062
18.4
1.6
1.5
100.24
134.37
2018
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
－
537,175
1,092,310
250,908
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
110.86
129.70
2019
991,365
269,974
689,658
31,732
367,537
157,581
130,127
336,119
194,994
141,124
79,279
－
55,809
81,102
48,801
19,023
92,617
(72,673)
19,943
20,737
19,999
536,676
1,086,456
274,780
31,484
19,729
7,892
10.6
23.0
97.8
226
107.46
1,048.18
40.0
8.0
10.4
5.1
49.4
0.27
37.2
73.1
1,037
9.7
1.0
3.9
110.91
128.40
year ended March 31, 2011 onward data are compiled on a global basis.
share dividend to commemorate the 100th anniversary of the Company’s founding.
NSK REPORT 2019
17
NSK’s Value Creation Process
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 2019.
IFRS from the fiscal year ended March 31, 2016, onward.
Note: JP-GAAP up to and including the fiscal year ended March 31, 2015,
Sales
(¥ Billions)
1,200
1,000
974.9
975.3
949.2
1,020.3
991.4
800
600
400
200
0
15/3
16/3
17/3
18/3
19/3
Operating Income Margin / Gross Profit Margin
Operating Income Margin Gross Profit Margin
(％)
25
20
15
10
5
0
23.1
22.5
22.2
22.8
22.1
10.0
9.2
9.6
8.0
6.9
15/3
16/3
17/3
18/3
19/3
15/3
16/3
17/3
18/3
19/3
15/3
16/3
17/3
18/3
19/3
Although the Industrial Machinery Business rose versus the previous
year due to a positive first half, the Automotive Business faced a
market adjustment in Europe and China and a decline in electric power
steering sales. As a result, sales fell to ¥991.4 billion, a decrease of
2.8% from the previous year.
NSK’s operating income margin declined to 8.0% (down 1.6 percentage
points year on year) due to lower net sales in the electric power
steering business and higher costs (steel procurement, research and
development, amortisation, labor costs, etc.).
Although the Company continued to hire more technical personnel, a
review in line with business activities in China resulted in the number
of employees worldwide at the end of FY19/3 falling to 31,484, a
decrease of 377 employees from the end of the previous year.
NSK is striving to expand work options and provide career advancement
programs for female employees. The ratio of female employees at NSK was
10.6% in Japan and 19.1% on a global basis. For more information, please see
Promoting the Advancement of Women in the Workplace on P. 50.
*1 Figures of a subsidiary merged in FY17/3 are included in the compilation.
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
60
40
20
0
9.9
45.6
55.8
10.4
12
8
4
0
15/3
16/3
17/3
18/3
19/3
Earnings per Share /
Cash Dividends per Share, Dividend Payout Ratio
(％)
16
(Yen)
150
■ Earnings per Share (left)
■ Cash Dividends per Share (left)
Dividend Payout Ratio (right)
120
114.6
121.4
107.5
37.2
44.1
131.2
90
60
30
0
86.1
28.0
30.5
34.0
38.0
40.0
40.0
24.4
28.0
15/3
16/3
17/3
18/3
19/3
(％)
50
40
30
20
10
0
ROE for FY19/3 declined to 10.4% due to lower net income. Despite
this, NSK cleared the target ROE of 10% or higher established in the
Company’s 5th Mid-Term Management Plan.
Despite lower profits, from the perspective of strengthening shareholder returns
and ensuring dividend stability, during FY19/3 the Company maintained the same
¥40 cash dividend per share issued in the previous year. The dividend payout ratio
was 37.2% and the total return ratio, including share buybacks, reached 73.1%.
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
■ Capital Expenditures
■ Depreciation and Amortisation
(¥ Billions)
100
80
60
40
20
0
81.1
68.8
46.8
48.8
55.0
58.6
43.0
43.4
49.2
38.6
15/3
16/3
17/3
18/3
19/3
(¥ Billions)
500
400
300
200
100
0
■ Interest-Bearing Debt (left)
Ratio of Net Worth to Total Capital (right)
49.2
49.4
44.0
44.2
40.4
326.4
278.2
267.4
274.8
250.9
15/3
16/3
17/3
18/3
19/3
(％)
50
40
30
20
10
0
As a result of investments targeted at productivity increases to achieve
greater competitiveness and investments in capacity increases to
address greater future demand, capital expenditures in FY19/3 grew to
¥81.1 billion, an increase of ¥12.3 billion from the previous year.
Despite an increase in interest-bearing debt from the previous year, the
current level will not have an impact on NSK’s financial stability. NSK is
working to balance sustainable shareholder returns, delivered through
cash dividends and treasury share purchases, with financial stability.
18
NSK REPORT 2019
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)
31,088
31,587
31,501
31,861
31,484
Ratio of Female Employees
Japan Global
17.3
17.617.617.617.6
17.6
19.1
64.5
64.3
64.2
63.6
62.7
10.7＊1
10.5
10.6
6.9
7.0
(％)
100
75
50
25
0
(%)
20
15
10
5
0
Lost-Worktime Injury Frequency Rate
Number of Patents Held
■ Japan ■ Outside Japan
6,097
6,275
6,430
7,499
6,987
- Japan Global
0.80
0.70
0.68
0.60＊1
0.44
0.32
0.28
0.26＊1
0.37
0.30
15/3
16/3
17/3
18/3
19/3
15/3
16/3
17/3
18/3
19/3
Thanks to strengthened workplace safety initiatives, the lost-time injury frequency
rate is on a declining trend globally, but this rate increased slightly in Japan. For
additional information on NSK’s safety management, please see P. 48.
Toward realizing Innovation & Challenge, Setting the Future in Motion,
NSK is strengthening technical development. The number of patents
possessed in FY19/3 reached 7,499, an increase of 512 patents from
*1 Adjusted for the purpose of greater accuracy.
the previous year.
Manufacturing in Japan Manufacturing outside Japan ーDistribution in Japan*2
15/3
16/3
17/3
18/3
19/3
(Accumulated No. of Products)
211
219
202
224
226
-5.8
-10.2
-8.5
-9.5
-5.7
-10.4
-27.9
-29.6
-29.6
-12.5
-13.8
-21.7
-13.9
-14.5
-26.1
(Patents)
8,000
6,000
4,000
2,000
0
250
200
150
100
50
0
Although NSK continues to improve productivity and introduce
energy-efficient machinery, differences in the types of products
manufactured led to a 13.8% decline in greenhouse gas emissions
related to production in Japan, an increase of 0.7 percentage point, and a
21.7% decline outside of Japan, an increase of 4.4 points.
Distribution-related greenhouse gas emissions in Japan declined 12.5%.
*1 Rates of percentage increase and decrease are presented compared
with the base date of the year ended March 31, 2012 (0%).
*2 Past data have been adjusted for the purpose of greater accuracy.
15/3
16/3
17/3
18/3
19/3
NSK developed two new products, bringing the total number of
environmentally friendly products to 226. For more details, please see
Developing Environmentally Friendly Products on P. 47
*Cumulative data from the year ended March 31, 2003.
NSK REPORT 2019
19
Although the Company continued to hire more technical personnel, a
review in line with business activities in China resulted in the number
of employees worldwide at the end of FY19/3 falling to 31,484, a
decrease of 377 employees from the end of the previous year.
Ratio of Female Employees
Japan Global
17.3
17.617.617.617.6
17.6
19.1
10.7＊1
10.5
10.6
6.9
7.0
(％)
100
75
50
25
0
(%)
20
15
10
5
0
Operating Income Margin / Gross Profit Margin
Operating Income Margin Gross Profit Margin
23.1
22.5
22.2
22.8
22.1
Number of Employees Worldwide /
Ratio of Overseas Employees
(Persons)
35,000
■ Japan ■ The Americas ■ Europe ■ Asia (left)
Ratio of Overseas Employees (right)
31,088
31,587
31,501
31,861
31,484
30,000
25,000
20,000
15,000
10,000
5,000
0
64.5
64.3
64.2
63.6
62.7
15/3
16/3
17/3
18/3
19/3
NSK’s Value Creation Process
Financial and Non-Financial Highlights
Trends in Major Indices
Note: 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 2019.
Sales
(¥ Billions)
1,200
800
600
400
200
0
80
60
40
20
0
80
60
40
20
0
1,000
974.9
975.3
949.2
1,020.3
991.4
10.0
9.2
9.6
8.0
6.9
15/3
16/3
17/3
18/3
19/3
15/3
16/3
17/3
18/3
19/3
Although the Industrial Machinery Business rose versus the previous
year due to a positive first half, the Automotive Business faced a
market adjustment in Europe and China and a decline in electric power
steering sales. As a result, sales fell to ¥991.4 billion, a decrease of
2.8% from the previous year.
NSK’s operating income margin declined to 8.0% (down 1.6 percentage
points year on year) due to lower net sales in the electric power
steering business and higher costs (steel procurement, research and
development, amortisation, labor costs, etc.).
■ Net Income Attributable to Owners of the Parent (left)
ROE
(¥ Billions)
ROE (right)
15.3
62.0
14.3
65.7
69.3
13.9
9.9
45.6
55.8
10.4
12
Cash Dividends per Share, Dividend Payout Ratio
(％)
16
(Yen)
150
■ Earnings per Share (left)
■ Cash Dividends per Share (left)
Dividend Payout Ratio (right)
120
114.6
121.4
107.5
37.2
44.1
131.2
86.1
28.0
30.5
34.0
38.0
40.0
40.0
24.4
28.0
8
4
0
15/3
16/3
17/3
18/3
19/3
15/3
16/3
17/3
18/3
19/3
ROE for FY19/3 declined to 10.4% due to lower net income. Despite
this, NSK cleared the target ROE of 10% or higher established in the
Company’s 5th Mid-Term Management Plan.
Despite lower profits, from the perspective of strengthening shareholder returns
and ensuring dividend stability, during FY19/3 the Company maintained the same
¥40 cash dividend per share issued in the previous year. The dividend payout ratio
was 37.2% and the total return ratio, including share buybacks, reached 73.1%.
■ Capital Expenditures
■ Depreciation and Amortisation
(¥ Billions)
100
81.1
68.8
46.8
48.8
55.0
58.6
43.0
43.4
49.2
38.6
■ Interest-Bearing Debt (left)
Ratio of Net Worth to Total Capital (right)
(¥ Billions)
49.2
49.4
44.0
44.2
40.4
326.4
278.2
267.4
274.8
250.9
(％)
50
40
30
20
10
0
(％)
50
40
30
20
10
0
15/3
16/3
17/3
18/3
19/3
15/3
16/3
17/3
18/3
19/3
As a result of investments targeted at productivity increases to achieve
greater competitiveness and investments in capacity increases to
address greater future demand, capital expenditures in FY19/3 grew to
¥81.1 billion, an increase of ¥12.3 billion from the previous year.
Despite an increase in interest-bearing debt from the previous year, the
current level will not have an impact on NSK’s financial stability. NSK is
working to balance sustainable shareholder returns, delivered through
cash dividends and treasury share purchases, with financial stability.
18
NSK REPORT 2019
(％)
25
20
15
10
5
0
90
60
30
0
500
400
300
200
100
0
Net Income Attributable to Owners of the Parent /
Earnings per Share /
Lost-Worktime Injury Frequency Rate
Number of Patents Held
- Japan Global
0.80
0.70
0.68
0.60＊1
0.44
0.32
0.28
0.26＊1
0.37
0.30
15/3
16/3
17/3
18/3
19/3
0.8
0.6
0.4
0.2
0
(Patents)
8,000
6,000
4,000
2,000
0
■ Japan ■ Outside Japan
6,097
6,275
6,430
7,499
6,987
15/3
16/3
17/3
18/3
19/3
Thanks to strengthened workplace safety initiatives, the lost-time injury frequency
rate is on a declining trend globally, but this rate increased slightly in Japan. For
additional information on NSK’s safety management, please see P. 48.
*1 Adjusted for the purpose of greater accuracy.
Toward realizing Innovation & Challenge, Setting the Future in Motion,
NSK is strengthening technical development. The number of patents
possessed in FY19/3 reached 7,499, an increase of 512 patents from
the previous year.
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
Manufacturing in Japan Manufacturing outside Japan ーDistribution in Japan*2
17/3
18/3
15/3
16/3
19/3
-5.8
-10.2
-8.5
-9.5
-5.7
-10.4
-27.9
-29.6
-29.6
-12.5
-13.8
-21.7
-13.9
-14.5
-26.1
(%)
10
5
0
-5
-10
-15
-20
-25
-30
-35
Although NSK continues to improve productivity and introduce
energy-efficient machinery, differences in the types of products
manufactured led to a 13.8% decline in greenhouse gas emissions
related to production in Japan, an increase of 0.7 percentage point, and a
21.7% decline outside of Japan, an increase of 4.4 points.
Distribution-related greenhouse gas emissions in Japan declined 12.5%.
*1 Rates of percentage increase and decrease are presented compared
with the base date of the year ended March 31, 2012 (0%).
*2 Past data have been adjusted for the purpose of greater accuracy.
(Accumulated No. of Products)
250
200
150
100
50
0
211
219
202
224
226
15/3
16/3
17/3
18/3
19/3
NSK developed two new products, bringing the total number of
environmentally friendly products to 226. For more details, please see
Developing Environmentally Friendly Products on P. 47
*Cumulative data from the year ended March 31, 2003.
NSK REPORT 2019
19
15/3
16/3
17/3
18/3
19/3
NSK is striving to expand work options and provide career advancement
programs for female employees. The ratio of female employees at NSK was
10.6% in Japan and 19.1% on a global basis. For more information, please see
Promoting the Advancement of Women in the Workplace on P. 50.
*1 Figures of a subsidiary merged in FY17/3 are included in the compilation.
Sustainable Growth Strategies
Looking Back on Past Mid-Term Management Plans
Here we take a retrospective look at the past 10 years of mid-term management plans, from the 3rd to the 5th.
(Note: Mid-Term Management Plan is abbreviated as MTP)
The 3rd MTP
The 4th MTP
Year to March 31, 2010‒Year to March 31, 2013 Year to March 31, 2014‒Year to March 31, 2016
The 5th MTP
Year to March 31, 2017-Year to March 31, 2019
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 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 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)
Our Three Core Management Strategies
Business Strategies
● Enhancement of business-based
management (sales & marketing, production
and technological divisions brought under
business headquarters management)
● Growth strategies
● 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
● Increase presence in emerging markets
● Expand environmental, infrastructure and
resource businesses
● Respond to technological innovation
C. Profitability improvement
● Proactive sales strategy (strengthen
proposal-based sales capabilities)
● Reorganize global production sites
● 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 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 3rd 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.
Growth with focus on profitability
● Growth in emerging countries
● Enhancement of customer and sector
strategies
● Production and technological innovation
capabilities
● Strategic alliances
Corporate Foundation
Develop management capability to handle
¥1 trillion in sales volume
● Enhancement of corporate governance and
compliance
● Reform of business structure
● 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 sales
and profit, a year ahead of schedule in the
second year of the 4th 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, 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.
● Strengthened its business foundation in China
(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
sales
● Exceeded the MTP target for global expansion
● Made progress with the global management
of the EPS business
structure
● Enhanced profitability following the
● Strengthened and enhanced compliance
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
● Strengthening of the compliance system to
restore trust and prevent any reoccurrence
following the cartel incident
● Continue to build foundation as a company
with ￥1 trillion in 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
Embark on New Chapter
in Evolution Towards
Next 100 Years
● Initiate mid- and long-term policies for
realizing sustainable growth
● Introduce resources for the future
Two Pillars of the Plan
● Operational excellence
Constant pursuit of competitiveness
● Innovate and challenge
Creation of new value
Management Tasks
● Achieve sustainable growth
● Reconstruct the profit base
● Expand into new growth fields
Strategies by Business
● Industrial Machinery Business
Respond to changes in the business
environment and expand target fields
● Automotive Business
Reinforce the profit base and establish
a platform for future growth
Under an environment of robust demand during the fiscal
year ended March 2018, the second year of the MTP, the
Company poured its energies into maximizing output and
achieved sales of ¥1 trillion, as targeted in the 5th MTP,
ahead of schedule. Both operating income and net income
achieved new record highs. However, due to a downturn in
the economic cycle starting in the second half of the fiscal
year ended March 2019, the final year of the MTP, and the
impact of the US-China trade dispute, the business
environment for both the industrial machinery and
automotive businesses deteriorated. Full-year
performance during the final year of the MTP experienced
a year-on-year decline in sales and profits, which resulted
in failure to achieve the MTP targets.
Meanwhile, amid technological changes including the
expanding use of IoT, AI, and robots, as well as autonomous
driving and electrification, the Company developed new
technologies and products intended to connect to the
future, and also released ball screws for brakes, industrial
actuators, and other products to the market. On the other
hand, the steering business entered a transitional period,
making activities aimed at returning to growth important.
● Achieved sales of ¥1 trillion, achieved record
highs for operating income and net income
● Achieved growth in the powertrain business and
recovery in the industrial machinery business
● Developed and proposed new technologies and
products
● Started smart-factory model-line operations
● Expanded initiatives to address social issues
(ESG, SDGs)
● Strengthened shareholder returns. Total return
ratio 57% (3-year total)
● Firmly achieve ¥1 trillion in sales and a
double-digit operating income margin
● Restart growth in the EPS business
● Productivity improvements leveraging ICT
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Business Trends (JP-GAAP up to and including the 4th MTP, IFRS from the 5th MTP onward)
Sales
(¥ Billions)
1,000
■ Actual ■ Target
Operating Income Margin
974.9
975.3
940.0
949.2
871.7
1,020.31,000.0 991.4
710.4 733.2
780.0
732.8
587.6
8.5
7.8
10.0
9.7
9.1
ー Actual Target
10.0
9.6
8.0
6.9
6.1
6.1
4.4
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
Operating Income
(¥ Billions)
100
97.3
94.7
86.0
■ Actual ■ Target
97.9 100.0
79.3
66.0
68.0
65.3
43.5 44.4
32.4
11.3
ー Actual Target
14.0
15.3
14.9
13.9
13.0
9.9
10.4
10.0
10.3 10.6
9.2
5.2
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
第3次中計期間
Period of 4th MTP
第4次中計期間
Period of 5th MTP
第5次中計期間
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
Net Income
(¥ Billions)
100
■ Actual ■ Target
Net D/E Ratio
(Times)
ー Actual Target
67.2
62.0
52.0
45.6
69.3 70.0
55.8
0.73
0.60
0.58
0.51
0.50
0.41
0.31
0.40
0.23
0.28
0.22
0.30
0.27
26.1 28.5
37.0
31.2
15.7
4.8
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
800
600
400
200
0
80
60
40
20
0
80
60
40
20
0
Capital Expenditures/Depreciation and Amortisation/
Movements in Exchange Rates (￥/US$) (￥/Euro)
R&D Expenditures
ー Actual (￥/US$) ー Actual (￥/Euro) Assumed
4th MTP
(Actual)
5th MTP
(Initial Plan)
5th MTP
(Actual)
¥149.0 billion
¥180.0 billion
¥208.5 billion
¥115.3 billion
¥130.0 billion
¥138.9 billion
¥31.7 billion
¥40.0 billion
¥49.9 billion
Capital Expenditures
(including intangible assets)
Depreciation and
Amortisation
R&D Expenditures
(on a statutory basis)
R&D Expenditures
（on a managerial basis）
130.9
112.9
109.4
109.4
120.0
92.8
85.6
79.0
83.1
134.4 138.8
107.1
90.0
109.9
100.2
100.2
132.6
120.1
120.0
90.0
129.7
128.4
118.8
120.0
110.9
108.4 110.9 105.0
ー
¥80.0 billion
¥86.3 billion
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
1.9
2.0
10/3
(％)
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
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NSK REPORT 2019
NSK REPORT 2019
21
Sustainable Growth Strategies
Looking Back on Past Mid-Term Management Plans
Here we take a retrospective look at the past 10 years of mid-term management plans, from the 3rd to the 5th.
(Note: Mid-Term Management Plan is abbreviated as MTP)
The 3rd MTP
The 4th MTP
The 5th MTP
Year to March 31, 2010‒Year to March 31, 2013 Year to March 31, 2014‒Year to March 31, 2016
Year to March 31, 2017-Year to March 31, 2019
Responding to paradigm shifts
Reorganizing business foundation
toward net sales of ¥1 trillion
Establishing corporate
fundamentals appropriate
for a company
with net sales of ¥1 trillion
Embark on New Chapter
in Evolution Towards
Next 100 Years
● Period to establish and consolidate
corporate fundamentals appropriate for a
● Establish corporate fundamentals appropriate
● Initiate mid- and long-term policies for
for a company with sales of ¥1 trillion in 2016,
realizing sustainable growth
the100th anniversary of NSK’s foundation
● Introduce resources for the future
company with sales of ￥1 trillion
● Implement measures to achieve mid-term
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● Continue measures to become No. 1 in
targets
total quality
● Continue to implement basic strategies (focus
on profitability, growth in emerging countries,
global management)
Our Three Core Management Strategies
Business Strategies
● Enhancement of business-based
management (sales & marketing, production
and technological divisions brought under
business headquarters management)
● Growth strategies
● 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
Growth with focus on profitability
● Growth in emerging countries
● Enhancement of customer and sector
strategies
● Production and technological innovation
capabilities
● Strategic alliances
Corporate Foundation
Develop management capability to handle
¥1 trillion in sales volume
resource businesses
● Respond to technological innovation
C. Profitability improvement
● Proactive sales strategy (strengthen
proposal-based sales capabilities)
● Reorganize global production sites
● Accelerate new product development
● Reform of business structure
● Advancement of global management
Basics of MTP (Priority Issues)
● Safety, quality and compliance
Two Pillars of the Plan
● Operational excellence
Constant pursuit of competitiveness
● Innovate and challenge
Creation of new value
Management Tasks
● Achieve sustainable growth
● Reconstruct the profit base
● Expand into new growth fields
● Industrial Machinery Business
Respond to changes in the business
environment and expand target fields
● Automotive Business
Reinforce the profit base and establish
a platform for future growth
● Increase presence in emerging markets
● Expand environmental, infrastructure and
compliance
● Enhancement of corporate governance and
Strategies by Business
Amid the severe business conditions that followed
Against a backdrop of improvements in the
the collapse of Lehman Brothers, the Company
profitability of the Automotive Business and
responded to the paradigm shift typified by the
assisted by an underlying weakness in yen
Under an environment of robust demand during the fiscal
year ended March 2018, the second year of the MTP, the
Company poured its energies into maximizing output and
keywords “emerging markets” and “technological
exchange rates, the Company achieved all its
achieved sales of ¥1 trillion, as targeted in the 5th MTP,
innovation,” worked on reorganizing its business
numerical targets, including those for sales
structure toward sales of ￥1 trillion and achieved
and profit, a year ahead of schedule in the
some measure of success. Nevertheless, the
second year of the 4th MTP. The Company
upheaval in the business environment, including
also improved on the targets in the MTP’s
a sharp appreciation of the yen and fluctuations in
final fiscal year. Significant growth was
global demand, continued to intensify, and the
recorded in the Chinese business and in the
numerical targets of the final year of the 3rd MTP
EPS business in particular.
ahead of schedule. Both operating income and net income
achieved new record highs. However, due to a downturn in
the economic cycle starting in the second half of the fiscal
year ended March 2019, the final year of the MTP, and the
impact of the US-China trade dispute, the business
environment for both the industrial machinery and
automotive businesses deteriorated. Full-year
(the year ended March 2013) were not achieved.
With regard to profitability, the Company
Furthermore, having been found guilty of
achieved an operating income margin of
performance during the final year of the MTP experienced
a year-on-year decline in sales and profits, which resulted
violating the Antimonopoly Law in a 2013 case
10.0% in the fiscal year ended March 2015 and
in failure to achieve the MTP targets.
involving a bearing product cartel, the Company
maintained a high level of 9.7% in the final
Meanwhile, amid technological changes including the
received a cease-and-desist order and was
fiscal year. In contrast, sales and profitability
expanding use of IoT, AI, and robots, as well as autonomous
ordered to pay financial penalties. As a priority
in the Industrial Machinery Business were on
driving and electrification, the Company developed new
and urgent task, the Company undertook
a declining trend, buffeted by the slowdown in
technologies and products intended to connect to the
measures to strengthen its compliance system
global economic growth, including the
toward the early restoration of trust and to
deceleration in China.
prevent any reoccurrence.
● Exceeded the MTP target for global expansion
● Made progress with the global management
● Developed and proposed new technologies and
● Strengthened its business foundation in China
● Achieved all the MTP numerical targets
(established a production system for a full
product lineup, built an autonomous
management system within China)
of the EPS business
sales
structure
● Improved profitability on a consolidated basis
● Expanded business in China, increased EPS
● Enhanced profitability following the
● Strengthened and enhanced compliance
reorganization of the Precision Machinery and
● Advanced local production and local
Parts Business
procurement
future, and also released ball screws for brakes, industrial
actuators, and other products to the market. On the other
hand, the steering business entered a transitional period,
making activities aimed at returning to growth important.
● Achieved sales of ¥1 trillion, achieved record
highs for operating income and net income
● Achieved growth in the powertrain business and
recovery in the industrial machinery business
● Started smart-factory model-line operations
● Expanded initiatives to address social issues
products
(ESG, SDGs)
● Strengthened shareholder returns. Total return
ratio 57% (3-year total)
● Declines in profitability levels due to the extremely
● Continue to build foundation as a company
● Firmly achieve ¥1 trillion in sales and a
high value of the yen and inadequate responses to
with ￥1 trillion in sales
double-digit operating income margin
changes in the business environment, including
● Establish profitability not greatly affected by
● Restart growth in the EPS business
extreme fluctuations in demand
business cycles or fluctuations in the
● Productivity improvements leveraging ICT
● Decrease in the Industrial Machinery Business
amounts of raw materials or exchange rates
sales ratio
● Strengthening of the compliance system to
restore trust and prevent any reoccurrence
following the cartel incident
● Promote new products and development in
new areas
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NSK REPORT 2019
Business Trends (JP-GAAP up to and including the 4th MTP, IFRS from the 5th MTP onward)
Sales
(¥ Billions)
1,000
■ Actual ■ Target
1,020.31,000.0 991.4
949.2
Operating Income Margin
(％)
10.0
974.9
975.3
940.0
871.7
710.4 733.2
780.0
732.8
587.6
800
600
400
200
0
80
60
40
20
0
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
Operating Income
(¥ Billions)
100
97.3
94.7
86.0
■ Actual ■ Target
97.9 100.0
79.3
66.0
68.0
65.3
43.5 44.4
32.4
11.3
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
10.0
9.7
9.1
ー Actual Target
10.0
9.6
8.0
6.9
6.1
6.1
8.5
7.8
4.4
1.9
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
ー Actual Target
14.0
15.3
14.9
13.9
10.3 10.6
9.2
5.2
13.0
9.9
10.4
10.0
2.0
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
8.0
6.0
4.0
2.0
0
ROE
(％)
20.0
15.0
10.0
5.0
0
Period of 3rd MTP
第3次中計期間
Period of 4th MTP
第4次中計期間
Period of 5th MTP
第5次中計期間
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
Net Income
(¥ Billions)
100
■ Actual ■ Target
Net D/E Ratio
(Times)
1.0
ー Actual Target
80
60
40
20
0
67.2
62.0
52.0
45.6
69.3 70.0
55.8
26.1 28.5
37.0
31.2
15.7
4.8
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
0.8
0.6
0.4
0.2
0
0.73
0.60
0.58
0.51
0.50
0.41
0.31
0.40
0.23
0.28
0.22
0.30
0.27
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
Capital Expenditures/Depreciation and Amortisation/
R&D Expenditures
Capital Expenditures
(including intangible assets)
Depreciation and
Amortisation
R&D Expenditures
(on a statutory basis)
R&D Expenditures
（on a managerial basis）
4th MTP
(Actual)
5th MTP
(Initial Plan)
5th MTP
(Actual)
¥149.0 billion
¥180.0 billion
¥208.5 billion
¥115.3 billion
¥130.0 billion
¥138.9 billion
¥31.7 billion
¥40.0 billion
¥49.9 billion
ー
¥80.0 billion
¥86.3 billion
Movements in Exchange Rates (￥/US$) (￥/Euro)
200
150
100
50
0
ー Actual (￥/US$) ー Actual (￥/Euro) Assumed
130.9
92.8
134.4 138.8
120.0
132.6
120.1
118.8
112.9
109.4
109.4
107.1
90.0
109.9
100.2
100.2
120.0
90.0
85.6
79.0
83.1
129.7
128.4
120.0
110.9
108.4 110.9 105.0
10/3
11/3
12/3
13/3
14/3
15/3
16/3
17/3
18/3
19/3
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
NSK REPORT 2019
21
Sustainable Growth Strategies
Toward 2026
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan (6th MTP) raises “the establishment
The 6th Mid-Term Management Plan (6th MTP) raises “the establishment
of a corporate foundation for sustainable growth” as NSK’s vision for
of a corporate foundation for sustainable growth” as NSK’s vision for
2026, the 110th anniversary of the Company’s founding. The 6th MTP
2026, the 110th anniversary of the Company’s founding. The 6th MTP
covers the first three years for realizing this vision and defines the
covers the first three years for realizing this vision and defines the
initiatives and targets as “building a business base and strengthening
initiatives and targets as “building a business base and strengthening
resources in preparation for the next growth phase”. NSK established
resources in preparation for the next growth phase”. NSK established
this vision because it believes in the importance of firmly establishing a
this vision because it believes in the importance of firmly establishing a
mechanism and foundation that will enable continued growth over the
mechanism and foundation that will enable continued growth over the
next ten years and into the future beyond.
next ten years and into the future beyond.
In this MTP, the Company has not established any numerical
In this MTP, the Company has not established any numerical
targets as absolute values for sales and profits. Under an uncertain,
targets as absolute values for sales and profits. Under an uncertain,
wildly changing economic environment, the Company will work to
wildly changing economic environment, the Company will work to
enhance managerial resources while at the same time pouring its
enhance managerial resources while at the same time pouring its
energies into building initiatives that will realize growth. As
energies into building initiatives that will realize growth. As
growth-related management targets, the Company aims to ensure
growth-related management targets, the Company aims to ensure
each business segment achieves growth rates that exceed growth
each business segment achieves growth rates that exceed growth
VISION 2026
Challenge next growth phase
in the markets that serve as their benchmarks, and will place
in the markets that serve as their benchmarks, and will place
greater priority on addressing change. Moreover, the Company will
greater priority on addressing change. Moreover, the Company will
also accelerate initiatives related to non-financial issues, such as
also accelerate initiatives related to non-financial issues, such as
the environment and diversity and inclusion.
the environment and diversity and inclusion.
NSK has set its sights on electrification, automation, the
NSK has set its sights on electrification, automation, the
environment, IoT, and other trends in order to ensure growth
environment, IoT, and other trends in order to ensure growth
through 2026 and beyond, and will aim for further evolution by
through 2026 and beyond, and will aim for further evolution by
fusing digital technologies with its Four Core Technologies and with
fusing digital technologies with its Four Core Technologies and with
the manufacturing engineering that give these Four Core
the manufacturing engineering that give these Four Core
Technologies shape in each of these fields. Moreover, by working to
Technologies shape in each of these fields. Moreover, by working to
actively incorporate technologies outside of the Company, NSK will
actively incorporate technologies outside of the Company, NSK will
create new value in new products and new fields. Through these
create new value in new products and new fields. Through these
initiatives, the Company will directly and indirectly contribute to
initiatives, the Company will directly and indirectly contribute to
solutions to social issues and the establishment of a sustainable
solutions to social issues and the establishment of a sustainable
society.
society.
Secure sales of ¥1 trillion
and profitability
Vision for 2026: Establish a corporate foundation for
sustainable growth
Provide values through evolution of MOTION & CONTROLTM
3 key management tasks
Business growth and
profitability
ESG management
Utilization of robust
managerial resources
● Balance investment
in future growth with
shareholder returns
under a stable
financial structure
● Safety, Quality,
Compliance, and
Environment
● Corporate governance
● Personnel, Technology,
Organization, Information
Transition to growth with
profitability
5th MTP Year to March 31, 2017-Year to March 31, 2019
Embark on New Chapter in
Evolution Towards Next 100 Years
6th MTP Year to March 31, 2020-Year to March 31, 2022
Build Business Base and Strengthen Resources
in Preparation for Next Growth Phase
● Respond to changes in business environment
● Rebuild profit base
● Develop new products, target new fields
● New initiatives targeting growth
● Enhance managerial resources
● Contribute to the environment and society
Financial Targets
5th MTP
(FY18) Results
6th MTP Targets
Sales/Growth Ratio
Growth
¥991.4 billion
Sales growth
2％/year
Industrial Machinery: Achieve sales growth that surpasses
market growth
Automotive Bearings: Achieve sales growth that surpasses
growth in global vehicle production
volume
Automotive Comps: Secure orders to restart growth in the
steering business
Operating Income %
Profitability
ROE
Net D/E Ratio
Equity Ratio
Payout Ratio
Share buyback
Efficiency
Financial
Stability
Shareholder
Returns
Capital Expenditure
(3-year total)
Capital
Expenditure
R&D Expenses
R&D
Non-Financial Targets
Greenhouse Gases
(GHG) Emissions
Reductions
Environment
Promoting
the Advancement
of Women (Japan)
NSK REPORT 2019
22
Diversity and
Inclusion
8.0％
10.4％
0.27 times
49.4％
8％ or more
Secure stable profitability
10％ or more
ROE exceeding cost of capital
0.3 times
50％
Maintain an A-level credit ranking
36.3% (3-year total)
¥35.0 billion
(share buyback)
Payout ratio 30 - 50%
Annual dividend
¥40/ share or more
Continue stable dividend
Acquisition of treasury shares
Agile capital policy
¥208.5 billion
¥180.0 billion
Investments to underpin sustainable growth
¥86.3 billion
(3-year total)
vs. Sales 3-4%
Continue developing technologies for
further growth
13.8% reduction (Japan)
21.7% reduction (outside Japan)
Rate of reduction in GHG emissions per
production unit compared with the base
date of the year ended March 31, 2012 (0%)
7% reduction (global)
Rate of reduction in GHG emissions
compared with the base date of the
year ended March 31, 2018 (0%)
Reduce GHG emissions released by
business operations
The Company aims to increase the ratio of women among managers and managerial
candidates by 1.6 times compared with the year ended March 31, 2019.
The Company will promote a higher ratio of women among corporate staff hires
(office staff: 40%, technical staff: 10%), and provide training and other multifaceted
initiatives targeted at female employees for the purpose of transforming mindsets
and developing skills.
NSK’s Value Created
Customers
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
Employees
Suppliers
Contribution to an advanced technological society
Realization of a more prosperous society
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
Local
Communities
Future
Generations
NSK’s Seven Key SDGs
Build Business Base and Strengthen Resources in
Preparation for Next Growth Phase
Shareholders
and
Investors
Secure sales of ¥1 trillion and profitability
Operational
excellence
Constant pursuit of
competitiveness
New initiatives targeting growth
Enhance managerial resources
Challenging
innovation
Creation of
new value
Contribute to the environment and society
Personnel, Technology, Organization, Information
NSK Core Values
Safety, Quality, Compliance, Environment
Build Business Base and Strengthen Resources in
Three Initiatives
Preparation for Next Growth Phase
The goal of the 6th MTP is to build a “business base and
strengthen resources in preparation for the next growth
phase.” The foundations for this goal are the four NSK core
values of “safety, quality, compliance, and environment”,
and the four managerial resources of “personnel,
technology, organization, and information”. The 6th MTP
will continue to be anchored on the two policy pillars of
“operational excellence” and “challenging innovation”
established in the 5th MTP, but will focus on the three
1. New initiatives targeting growth
Grow by delivering value that meets the needs of a future society
1. Expand NSK core products in the growth segments of electrification,
automation, environment, and IoT
2. Grow by commercializing new products in growth segments
3. Expand the product lineup for and restart growth in the EPS business
4. Utilize M&A and strategic alliances
2. Enhance managerial resources
1. Evolve in personnel development
2. Evolve in manufacturing (Monozukuri)
3. Evolve in technology development
4. Utilize of digital technology
policies of “new initiatives targeting growth”, “enhancing
3. Contribute to the environment and society
managerial resources”, and “contributing to the
environment and society”.
Address environmental and societal issues by strengthening
managerial resources and NSK’s core values + corporate
governance
NSK REPORT 2019
23
Sustainable Growth Strategies
Toward 2026
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan (6th MTP) raises “the establishment
The 6th Mid-Term Management Plan (6th MTP) raises “the establishment
in the markets that serve as their benchmarks, and will place
in the markets that serve as their benchmarks, and will place
of a corporate foundation for sustainable growth” as NSK’s vision for
of a corporate foundation for sustainable growth” as NSK’s vision for
2026, the 110th anniversary of the Company’s founding. The 6th MTP
2026, the 110th anniversary of the Company’s founding. The 6th MTP
covers the first three years for realizing this vision and defines the
covers the first three years for realizing this vision and defines the
initiatives and targets as “building a business base and strengthening
initiatives and targets as “building a business base and strengthening
resources in preparation for the next growth phase”. NSK established
resources in preparation for the next growth phase”. NSK established
greater priority on addressing change. Moreover, the Company will
greater priority on addressing change. Moreover, the Company will
also accelerate initiatives related to non-financial issues, such as
also accelerate initiatives related to non-financial issues, such as
the environment and diversity and inclusion.
the environment and diversity and inclusion.
NSK has set its sights on electrification, automation, the
NSK has set its sights on electrification, automation, the
environment, IoT, and other trends in order to ensure growth
environment, IoT, and other trends in order to ensure growth
this vision because it believes in the importance of firmly establishing a
this vision because it believes in the importance of firmly establishing a
through 2026 and beyond, and will aim for further evolution by
through 2026 and beyond, and will aim for further evolution by
mechanism and foundation that will enable continued growth over the
mechanism and foundation that will enable continued growth over the
fusing digital technologies with its Four Core Technologies and with
fusing digital technologies with its Four Core Technologies and with
next ten years and into the future beyond.
next ten years and into the future beyond.
the manufacturing engineering that give these Four Core
the manufacturing engineering that give these Four Core
In this MTP, the Company has not established any numerical
In this MTP, the Company has not established any numerical
Technologies shape in each of these fields. Moreover, by working to
Technologies shape in each of these fields. Moreover, by working to
targets as absolute values for sales and profits. Under an uncertain,
targets as absolute values for sales and profits. Under an uncertain,
actively incorporate technologies outside of the Company, NSK will
actively incorporate technologies outside of the Company, NSK will
wildly changing economic environment, the Company will work to
wildly changing economic environment, the Company will work to
create new value in new products and new fields. Through these
create new value in new products and new fields. Through these
enhance managerial resources while at the same time pouring its
enhance managerial resources while at the same time pouring its
initiatives, the Company will directly and indirectly contribute to
initiatives, the Company will directly and indirectly contribute to
energies into building initiatives that will realize growth. As
energies into building initiatives that will realize growth. As
solutions to social issues and the establishment of a sustainable
solutions to social issues and the establishment of a sustainable
growth-related management targets, the Company aims to ensure
growth-related management targets, the Company aims to ensure
society.
society.
each business segment achieves growth rates that exceed growth
each business segment achieves growth rates that exceed growth
Secure sales of ¥1 trillion
and profitability
5th MTP Year to March 31, 2017-Year to March 31, 2019
Embark on New Chapter in
Evolution Towards Next 100 Years
6th MTP Year to March 31, 2020-Year to March 31, 2022
Build Business Base and Strengthen Resources
in Preparation for Next Growth Phase
● Respond to changes in business environment
● New initiatives targeting growth
● Rebuild profit base
● Enhance managerial resources
Financial Targets
5th MTP
(FY18) Results
6th MTP Targets
Sales/Growth Ratio
Growth
¥991.4 billion
Operating Income %
Profitability
ROE
Net D/E Ratio
Equity Ratio
Payout Ratio
Share buyback
Efficiency
Financial
Stability
Shareholder
Returns
Capital Expenditure
Capital
(3-year total)
Expenditure
R&D Expenses
R&D
Non-Financial Targets
Greenhouse Gases
(GHG) Emissions
Reductions
Environment
Promoting
the Advancement
of Women (Japan)
22
NSK REPORT 2019
Diversity and
Inclusion
Sales growth
2％/year
Industrial Machinery: Achieve sales growth that surpasses
Automotive Bearings: Achieve sales growth that surpasses
growth in global vehicle production
Automotive Comps: Secure orders to restart growth in the
market growth
volume
steering business
8.0％
10.4％
0.27 times
49.4％
8％ or more
Secure stable profitability
10％ or more
ROE exceeding cost of capital
0.3 times
50％
Maintain an A-level credit ranking
36.3% (3-year total)
Payout ratio 30 - 50%
Continue stable dividend
¥35.0 billion
(share buyback)
Annual dividend
¥40/ share or more
Acquisition of treasury shares
Agile capital policy
¥208.5 billion
¥180.0 billion
Investments to underpin sustainable growth
¥86.3 billion
(3-year total)
vs. Sales 3-4%
Continue developing technologies for
further growth
13.8% reduction (Japan)
21.7% reduction (outside Japan)
Rate of reduction in GHG emissions per
production unit compared with the base
date of the year ended March 31, 2012 (0%)
7% reduction (global)
Rate of reduction in GHG emissions
compared with the base date of the
year ended March 31, 2018 (0%)
Reduce GHG emissions released by
business operations
The Company aims to increase the ratio of women among managers and managerial
candidates by 1.6 times compared with the year ended March 31, 2019.
The Company will promote a higher ratio of women among corporate staff hires
(office staff: 40%, technical staff: 10%), and provide training and other multifaceted
initiatives targeted at female employees for the purpose of transforming mindsets
and developing skills.
VISION 2026
Challenge next growth phase
Vision for 2026: Establish a corporate foundation for
sustainable growth
Provide values through evolution of MOTION & CONTROLTM
3 key management tasks
Business growth and
profitability
ESG management
Utilization of robust
managerial resources
● Balance investment
in future growth with
shareholder returns
under a stable
financial structure
● Safety, Quality,
Compliance, and
Environment
● Corporate governance
● Personnel, Technology,
Organization, Information
Transition to growth with
profitability
NSK’s Value Created
Customers
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
Employees
● Develop new products, target new fields
● Contribute to the environment and society
Secure sales of ¥1 trillion and profitability
Build Business Base and Strengthen Resources in
Preparation for Next Growth Phase
Shareholders
and
Investors
Contribution to an advanced technological society
Realization of a more prosperous society
Suppliers
Growth of a wide range of industries
Advancement of mobility societies
Improvement of shareholder value
NSK’s Seven Key SDGs
Local
Communities
Future
Generations
Operational
excellence
Constant pursuit of
competitiveness
New initiatives targeting growth
Enhance managerial resources
Contribute to the environment and society
Challenging
innovation
Creation of
new value
Personnel, Technology, Organization, Information
NSK Core Values
Safety, Quality, Compliance, Environment
Build Business Base and Strengthen Resources in
Preparation for Next Growth Phase
The goal of the 6th MTP is to build a “business base and
strengthen resources in preparation for the next growth
phase.” The foundations for this goal are the four NSK core
values of “safety, quality, compliance, and environment”,
and the four managerial resources of “personnel,
technology, organization, and information”. The 6th MTP
will continue to be anchored on the two policy pillars of
“operational excellence” and “challenging innovation”
established in the 5th MTP, but will focus on the three
policies of “new initiatives targeting growth”, “enhancing
managerial resources”, and “contributing to the
environment and society”.
Three Initiatives
1. New initiatives targeting growth
Grow by delivering value that meets the needs of a future society
1. Expand NSK core products in the growth segments of electrification,
automation, environment, and IoT
2. Grow by commercializing new products in growth segments
3. Expand the product lineup for and restart growth in the EPS business
4. Utilize M&A and strategic alliances
2. Enhance managerial resources
1. Evolve in personnel development
2. Evolve in manufacturing (Monozukuri)
3. Evolve in technology development
4. Utilize of digital technology
3. Contribute to the environment and society
Address environmental and societal issues by strengthening
managerial resources and NSK’s core values + corporate
governance
NSK REPORT 2019
23
Sustainable Growth Strategies
CSR/ESG Management
NSK’s Approach to CSR and ESG
Under its mission statement calling for a safer, smoother society, protection of the global environment, and improved relationships between
people, NSK aims to balance its contribution to resolutions for social issues with sustainable growth as a company by generating values
through co-creation with all stakeholders. With the goal of realizing this aim in mind, NSK established VISION 2026 on the occasion of its 100th
anniversary. Moreover, the 6th MTP continues to target the establishment of a corporate foundation for sustainable growth and provision of
values through the evolution of MOTION & CONTROLTM as its vision for 2026, and is thus formulated to undertake the three management tasks
of ESG management, business growth and profitability, and utilization of robust managerial resources.
Under a governance framework that raises the efficiency, flexibility, and fairness of management and strengthens the supervisory function,
NSK’s approach to CSR and ESG is based on the core values of safety, quality, compliance, and environment. NSK’s approach also defines
contribution to resolutions of social issues as a responsibility of the Company. Similarly, upon advancing specific initiatives, the Company
formulated an SDGs Declaration that respects the spirit of the SDGs and selected the NSK’s seven key goals based on this approach.
Future Vision
NSK VISION 2026
Setting the Future in Motion
Vision for 2026: Establish a corporate foundation for sustainable growth
Provide values through evolution of MOTION & CONTROLTM
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.
ESG management
Safety, Quality, Compliance, and Environment
Corporate Governance
3 key
management
tasks
Business growth
and profitability
Utilization of
robust managerial
resources
Value Created
● Environmental contribution
(low friction, high efficiency,
improvement of transmission
efficiency)
● Contribution to an advanced
technological society
● Realization of a more prosperous
society
● Growth of a wide range of industries
● Advancement in mobility society
● Improvement of shareholder value
Balance investment in future growth with
shareholder returns under a stable financial structure
Personnel, Technology,
Organization, Information
Societal Issues
● Climate Change
● Natural Disaster Response
● Resource Depletion
● Water Shortages
● Ecosystem Conservation
● Hygienic Facility Maintenance
● Water Safety
● Product Safety
● Eradication of Poverty and Hunger
● Preventing/Reducing Inequality
● Preventing Forced Labor and Child Labor
● Quality of Education
● Gender Equality
● Eradication of Conflict/Terrorism
● Population Growth
● Falling Birthrates/Aging Populations
(Among other issues)
NSK’s SDGs Declaration
In line with our Mission Statement, NSK will work to resolve societal issues by conducting
sincere and responsible business operations and achieving innovation in our products and services,
in order to help realize a sustainable society.
We will uphold the spirit of all 17 SDGs, and have selected seven SDGs that are particularly
interlinked with our business, which we will place priority on tackling.
NSK’s Initiatives and Non-Financial Targets
To promote CSR/ESG management, NSK considers it important to clarify the short-, mid- and long-term issues and evaluate the results of
its initiatives. To those ends, we recognize that it is important to set up non-financial targets and their management indicators that will lead
to the resolution of social issues and are proceeding with the identification of key performance indicators (KPIs). As set out below, this
report shows the key goals for NSK and the initiatives being taken, and also shows as a reference the measurables for checking and
evaluating the progress of and the results from solving those issues by using qualitative expressions. Going forward, we will further enhance
our efforts to resolve social issues.
Seven Primary Sustainable Development Goals Addressed by NSK
Declaration of NSK’s Initiatives
NSK’s Seven Key SDGs
Measurables
We will contribute to a safe and resilient
social infrastructure through innovation.
We will contribute to climate change
countermeasures by reducing the impact
of our business activities on the environment.
We will contribute to the creation of a waste-free
society and reduce impact on the global
environment through environmentally friendly
products and reuse of resources.
We will form richly diverse organizations
where both employee motivation
and value creation are fulfilled.
1
2
3
4
5
Number of new products and services,
sales of infrastructure related products.
Reduction of CO2 emissions, total waste volume,
recycling rate, water usage, etc.
Number of environmentally friendly
products developed, CO2 emissions
reduced by end user use of NSK products.
P. 34
Female employee ratio, childcare
leave/caregiving leave, employment of seniors,
etc.
We will enhance our dialogue through multi-stakeholder partnerships to increase the effectiveness of our SDGs initiatives.
Initiatives to Strengthen CSR/ESG Management
t
n
e
m
n
o
r
i
v
n
E
l
a
i
c
o
S
e
c
n
a
n
r
e
v
o
G
Environmental
Management
P. 46
Maximize the environmental contribution through products
and minimize the environmental impact from business activities
● Creating environmentally friendly products
● Contributing to reduction of CO2 emissions through products/services
● Reducing CO2 emissions from business activities by 60% compared with FY2017 by 2050
● Contributing to building a recycling-oriented society by promoting 3Rs (Reduce, Reuse, Recycle)
Create safe, secure, and comfortable workplaces where safety is the first
Safety Management
P. 48
and foremost priority
● Preventing serious accidents
● Improving safety awareness
● Preventing recurrence of occupational accidents
Quality Management
P. 49
Enhance quality in cooperation with customers and suppliers
● Promoting NSK Product Development System (NPDS) activities
● Promoting NSK Quality No. 1 (NQ1) Program activities to aim for stable
production with zero defects
● Developing human resources to build a stronger foundation for quality creation
Create a fair workplace that empowers the individual
Human Resource
Management
P. 50
● Leveraging a diverse workforce
● Providing opportunities for growth
● Building more engaging workplaces
Supply Chain
Management
P. 52
Compliance
P. 53
As a business partner, build trusting relationships and embody mutual development
● Ensuring stable procurement
● Strengthening the effectiveness of supply chain BCP
● Achieving sustainable and responsible procurement
Increase trust from international society and local communities by adhering to
the laws and regulations and by taking actions based on high ethical standards
● Strengthening compliance system, education and awareness-raising activities and monitoring
Corporate Governance
and improvement in our corporate value over the mid- to long- term
Realize a transparent, fair and timely decision-making system for sustainable growth
P. 54
● Enhancing the effectiveness of Board of Directors
● Strengthening Group governance
: Safety, quality, compliance and the environment are NSK’s core values.
24
NSK REPORT 2019
NSK REPORT 2019
25
Sustainable Growth Strategies
CSR/ESG Management
NSK’s Approach to CSR and ESG
Under its mission statement calling for a safer, smoother society, protection of the global environment, and improved relationships between
people, NSK aims to balance its contribution to resolutions for social issues with sustainable growth as a company by generating values
through co-creation with all stakeholders. With the goal of realizing this aim in mind, NSK established VISION 2026 on the occasion of its 100th
anniversary. Moreover, the 6th MTP continues to target the establishment of a corporate foundation for sustainable growth and provision of
values through the evolution of MOTION & CONTROLTM as its vision for 2026, and is thus formulated to undertake the three management tasks
of ESG management, business growth and profitability, and utilization of robust managerial resources.
Under a governance framework that raises the efficiency, flexibility, and fairness of management and strengthens the supervisory function,
NSK’s approach to CSR and ESG is based on the core values of safety, quality, compliance, and environment. NSK’s approach also defines
contribution to resolutions of social issues as a responsibility of the Company. Similarly, upon advancing specific initiatives, the Company
formulated an SDGs Declaration that respects the spirit of the SDGs and selected the NSK’s seven key goals based on this approach.
Future Vision
NSK VISION 2026
Setting the Future in Motion
Vision for 2026: Establish a corporate foundation for sustainable growth
Provide values through evolution of MOTION & CONTROLTM
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.
ESG management
Safety, Quality, Compliance, and Environment
Corporate Governance
management
3 key
tasks
Business growth
and profitability
Utilization of
robust managerial
resources
Balance investment in future growth with
shareholder returns under a stable financial structure
Personnel, Technology,
Organization, Information
Societal Issues
Value Created
● Environmental contribution
(low friction, high efficiency,
improvement of transmission
efficiency)
● Contribution to an advanced
technological society
● Realization of a more prosperous
society
● Growth of a wide range of industries
● Advancement in mobility society
● Improvement of shareholder value
● 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
(Among other issues)
NSK’s SDGs Declaration
In line with our Mission Statement, NSK will work to resolve societal issues by conducting
sincere and responsible business operations and achieving innovation in our products and services,
in order to help realize a sustainable society.
We will uphold the spirit of all 17 SDGs, and have selected seven SDGs that are particularly
interlinked with our business, which we will place priority on tackling.
NSK’s Initiatives and Non-Financial Targets
To promote CSR/ESG management, NSK considers it important to clarify the short-, mid- and long-term issues and evaluate the results of
its initiatives. To those ends, we recognize that it is important to set up non-financial targets and their management indicators that will lead
to the resolution of social issues and are proceeding with the identification of key performance indicators (KPIs). As set out below, this
report shows the key goals for NSK and the initiatives being taken, and also shows as a reference the measurables for checking and
evaluating the progress of and the results from solving those issues by using qualitative expressions. Going forward, we will further enhance
our efforts to resolve social issues.
Seven Primary Sustainable Development Goals Addressed by NSK
Declaration of NSK’s Initiatives
NSK’s Seven Key SDGs
Measurables
We will contribute to a safe and resilient
social infrastructure through innovation.
We will contribute to climate change
countermeasures by reducing the impact
of our business activities on the environment.
We will contribute to the creation of a waste-free
society and reduce impact on the global
environment through environmentally friendly
products and reuse of resources.
We will form richly diverse organizations
where both employee motivation
and value creation are fulfilled.
Number of new products and services,
sales of infrastructure related products.
Reduction of CO2 emissions, total waste volume,
recycling rate, water usage, etc.
Number of environmentally friendly
products developed, CO2 emissions
reduced by end user use of NSK products.
P. 34
Female employee ratio, childcare
leave/caregiving leave, employment of seniors,
etc.
We will enhance our dialogue through multi-stakeholder partnerships to increase the effectiveness of our SDGs initiatives.
1
2
3
4
5
Initiatives to Strengthen CSR/ESG Management
t
n
e
m
n
o
r
i
v
n
E
l
a
i
c
o
S
e
c
n
a
n
r
e
v
o
G
Environmental
Management
P. 46
Maximize the environmental contribution through products
and minimize the environmental impact from business activities
● Creating environmentally friendly products
● Contributing to reduction of CO2 emissions through products/services
● Reducing CO2 emissions from business activities by 60% compared with FY2017 by 2050
● Contributing to building a recycling-oriented society by promoting 3Rs (Reduce, Reuse, Recycle)
Safety Management
P. 48
Create safe, secure, and comfortable workplaces where safety is the first
and foremost priority
● Preventing serious accidents
● Improving safety awareness
● Preventing recurrence of occupational accidents
Quality Management
P. 49
Enhance quality in cooperation with customers and suppliers
● Promoting NSK Product Development System (NPDS) activities
● Promoting NSK Quality No. 1 (NQ1) Program activities to aim for stable
production with zero defects
● Developing human resources to build a stronger foundation for quality creation
Human Resource
Management
P. 50
Create a fair workplace that empowers the individual
● Leveraging a diverse workforce
● Providing opportunities for growth
● Building more engaging workplaces
Supply Chain
Management
P. 52
Compliance
P. 53
Corporate Governance
P. 54
As a business partner, build trusting relationships and embody mutual development
● Ensuring stable procurement
● Strengthening the effectiveness of supply chain BCP
● Achieving sustainable and responsible procurement
Increase trust from international society and local communities by adhering to
the laws and regulations and by taking actions based on high ethical standards
● Strengthening compliance system, education and awareness-raising activities and monitoring
Realize a transparent, fair and timely decision-making system for sustainable growth
and improvement in our corporate value over the mid- to long- term
● Enhancing the effectiveness of Board of Directors
● Strengthening Group governance
: Safety, quality, compliance and the environment are NSK’s core values.
24
NSK REPORT 2019
NSK REPORT 2019
25
Sustainable Growth Strategies
New Initiatives Targeting Growth
Segment Strategy
Message from Top Management
Industrial Machinery
Business Division
Evolving NSK’s business
portfolio to meet new needs
as industry undergoes a
structural shift
Yasuhiro Kamio
Director, Representative, Executive Vice President,
Head of Industrial Machinery Business Division Headquarters
NSK’s Industrial Machinery Business:
Strengths and Value Creation
Ever since NSK’s foundation, our industrial machinery
business has helped build a safe, smooth society by supplying
high-performance high-quality bearings, linear motion, and
mechatronic products to a vast range of sectors that support
our modern life̶from infrastructure such as steelmaking
facilities and railway cars, to machinery used in advanced
manufacturing such as machine tools and semiconductor
manufacturing equipment, capital goods such as speed
reducers, and consumer goods such as washing machines
and air conditioners. Meanwhile, through our aftermarket
business we have worked to support a wide range of industrial
equipment users by delivering maintenance and repair
products and technical expertise. By further refining our
product development to develop high-precision products to
support an advanced technological society, we will work to
deliver even more compact, high-efficiency products that
contribute to an energy-efficient society.
NSK’s strength lies in our product lineup founded on the
Four Core Technologies plus One and the technical support
we deliver to our customers. The pioneer spirit that inspired
us to create Japan’s first domestically-produced bearings
lives on today. The sincere and ongoing efforts of our
employees to not only meet but to exceed our customers’
expectations have earned us the strong trust of customers
both in Japan and across the world, allowing NSK to maintain
a leading position in the industry. Our R&D prowess̶which
enables us to overcome technological hurdles, our ability to
manufacture in optimum global locations, and our delivery
framework consisting of not only direct sales but also a strong
distributor network have won acclaim from customers and
built NSK into a trusted brand around the world. This in turn
motivates us to deliver even more advanced engineering and
technical services and propose new solutions to our customers.
While we have a strong and balanced global lineup
catering to both OEM customers and the aftermarket, NSK is
particularly strong in the two core products of precision
bearings and precision ball screws, holding the top global
share in each. Technical service is another of our strengths,
with our engineers working with our customers at the front
line of their operations to deliver solutions. NSK’s technical
services have also won acclaim outside Japan. We are steadily
developing a strong reputation, including recently winning a
large maintenance contract in the U.S.
One of the key factors supporting our global industrial
machinery business is the diversity of our people. Our
locations outside Japan are increasingly overseen by local
managers, and our teams work to provide a swift and
fine-tuned customer response based on the characteristics
and needs of each region. Furthermore, non-Japanese
managers, including women, hold key posts at our Industrial
Machinery Business Division Headquarters in Japan. The
diversity of our personnel is an important base for the
development of our business, and we will continue to evolve
our organization in this way going forward.
Industry is currently undergoing a major structural shift. The
combination to reduce vibration in railway cars. In the new
Our Vision for 2026
shift to low-carbon and decarbonized technology is
accelerating in response to the common global problems
such as population growth and environmental issues.
Meanwhile, advances in Internet of Things (IoT) and artificial
intelligence (AI) technology are leading to improvements in big
data analysis capabilities, which, combined with the spread of
5G technology, is driving a reform in the structure of industry
and related economic models. In this environment, NSK’s
industrial machinery business must evolve its business
portfolio to meet these changing market needs. Although we
are already working to focus our resources on areas and
labor-saving, smart manufacturing, and the environment, one
area that I want to place even more emphasis on is increasing
the ratio of solution-based services̶in addition to our
product-based business̶that we offer. In other words, we aim
to build a business model that spans all phases of the product
life cycle. By monitoring the condition of bearings used in
manufacturing facilities and visualizing the remaining life, we
aim to help our customers achieve zero downtime in their
machines and plants. At the same time, we will continue to
pay close attention to how NSK products are used, and link
this knowledge to R&D ideas for new products, as well as new
technical services and improved consulting capabilities. These
will be important tasks for us as we work toward 2026.
forecast to grow. For example, one application is vibration
control actuators that use ball screws and motors in
markets that will develop with the advent of electrification, we
will utilize NSK’s superior component technology to deliver
unit and systemized products, with the aim of developing this
product line into a future pillar of the Industrial Machinery
Business.
The fourth key initiative is to leverage NSK’s strengths to
expand the GAM (global aftermarket) business. We will utilize
NSK’s strengths including our brand power and technical
service capability to push forward with our key global
initiatives, including enhancing sales channel management,
developing specialists, strengthening our supply, distribution,
The fifth and final key initiative is to construct a new
business utilizing condition monitoring technology. Our
condition monitoring system (CMS) technology, which enables
the actual usage conditions of NSK products to be visualized
and tracked, has won acclaim as among the best of its kind in
the industry. In addition to product development,
manufacturing, and delivery̶the key processes of a
traditional manufacturer̶we will also focus on developing
solution-based business models, such as diagnosing and
visualizing the remaining life of a product using CMS
technology, helping prevent sudden stoppages in our
customers’ machinery.
sectors that will grow in line with needs related to automation,
and inventory functions, and further promoting IT utilization.
New Initiatives Targeting Growth
NSK’s industrial machinery business has selected the
ESG and SDGs Initiatives
I believe that initiatives by the Industrial Machinery Business
can make a particularly important contribution to the
following five key initiatives targeting sustainable growth in its
environment. Last year NSK positioned “the environment” as
6th Mid-Term Management Plan.
The first is to capture demand in growth sectors. As I
mentioned previously, we have identified several growth
one of its core values alongside safety, quality, and
compliance, and set a Group-wide target of a 60 percent
reduction in its CO2 emissions by the year 2050. We are
sectors where NSK’s R&D, design, and quality capabilities can
pushing forward with initiatives toward this goal. For example,
be put to use to respond to changes in technology and
customer needs. These include clean energy, such as wind
power generation, railway cars̶which are once again drawing
attention as an environmentally-friendly means of mobility,
information and communications technology related to 5G,
we have reduced energy consumption at our NSK Kyushu
plant (Fukuoka, Japan) by converting air conditioning systems
to electric heat pumps, introduced smart manufacturing
technology in the form of a new hybrid line in the Kirihara
branch of our Fujisawa plant (Kanagawa, Japan), as well as
and high-performance energy-efficient appliances utilizing IoT
converting heat treatment furnaces to electric technology. We
technology.
The second key initiative is to deliver value leveraging
NSK’s strength in precision technology. Precision technology
is one of NSK’s core technologies, and a source of pride on
are also working to develop new, energy-efficient heat
treatment furnaces. NSK’s products are incorporated in a
diverse array of devices, and the contribution our products
make to reducing friction and energy loss is immeasurable. In
which our industrial machinery business will not compromise.
the case of motors, NSK products help improve motor
As the working population shrinks in line with declining
birthrates and the need for plant automation and labor-saving
technology grows, we will work to further accelerate
development of the precision bearings and precision ball
screws used in machine tools, semiconductor manufacturing
equipment, and robotics to maintain our dominant share of
the market and further expand our presence.
Our third key initiative is to establish industrial actuators
efficiency and reduce energy consumption, while electrifying
the hydraulic system in injection molding machines and
replacing it with ball screws helps lower CO2 emissions.
Additionally, the development and supply of bearings for wind
power generation̶a key renewable energy source̶directly
serves to combat global warming. At NSK we are not only
committed to reducing CO2 emissions, but are also focusing
on doing our part to achieve the SDGs associated with our
as a new core product. Industrial actuators are key components
business. Going forward we aim to contribute to society while
that support electrification, and the size of the market is
continuing to grow as a company.
26
NSK REPORT 2019
NSK REPORT 2019
27
Sustainable Growth Strategies
New Initiatives Targeting Growth
Segment Strategy
Message from Top Management
Industrial Machinery
Business Division
Evolving NSK’s business
portfolio to meet new needs
as industry undergoes a
structural shift
Yasuhiro Kamio
Director, Representative, Executive Vice President,
Head of Industrial Machinery Business Division Headquarters
NSK’s Industrial Machinery Business:
Strengths and Value Creation
Ever since NSK’s foundation, our industrial machinery
business has helped build a safe, smooth society by supplying
high-performance high-quality bearings, linear motion, and
mechatronic products to a vast range of sectors that support
our modern life̶from infrastructure such as steelmaking
facilities and railway cars, to machinery used in advanced
manufacturing such as machine tools and semiconductor
manufacturing equipment, capital goods such as speed
reducers, and consumer goods such as washing machines
and air conditioners. Meanwhile, through our aftermarket
business we have worked to support a wide range of industrial
equipment users by delivering maintenance and repair
products and technical expertise. By further refining our
product development to develop high-precision products to
support an advanced technological society, we will work to
deliver even more compact, high-efficiency products that
contribute to an energy-efficient society.
enables us to overcome technological hurdles, our ability to
manufacture in optimum global locations, and our delivery
framework consisting of not only direct sales but also a strong
distributor network have won acclaim from customers and
built NSK into a trusted brand around the world. This in turn
motivates us to deliver even more advanced engineering and
technical services and propose new solutions to our customers.
While we have a strong and balanced global lineup
catering to both OEM customers and the aftermarket, NSK is
particularly strong in the two core products of precision
bearings and precision ball screws, holding the top global
share in each. Technical service is another of our strengths,
with our engineers working with our customers at the front
line of their operations to deliver solutions. NSK’s technical
services have also won acclaim outside Japan. We are steadily
developing a strong reputation, including recently winning a
large maintenance contract in the U.S.
One of the key factors supporting our global industrial
machinery business is the diversity of our people. Our
locations outside Japan are increasingly overseen by local
NSK’s strength lies in our product lineup founded on the
managers, and our teams work to provide a swift and
Four Core Technologies plus One and the technical support
we deliver to our customers. The pioneer spirit that inspired
us to create Japan’s first domestically-produced bearings
lives on today. The sincere and ongoing efforts of our
employees to not only meet but to exceed our customers’
expectations have earned us the strong trust of customers
fine-tuned customer response based on the characteristics
and needs of each region. Furthermore, non-Japanese
managers, including women, hold key posts at our Industrial
Machinery Business Division Headquarters in Japan. The
diversity of our personnel is an important base for the
development of our business, and we will continue to evolve
both in Japan and across the world, allowing NSK to maintain
our organization in this way going forward.
a leading position in the industry. Our R&D prowess̶which
Our Vision for 2026
Industry is currently undergoing a major structural shift. The
shift to low-carbon and decarbonized technology is
accelerating in response to the common global problems
such as population growth and environmental issues.
Meanwhile, advances in Internet of Things (IoT) and artificial
intelligence (AI) technology are leading to improvements in big
data analysis capabilities, which, combined with the spread of
5G technology, is driving a reform in the structure of industry
and related economic models. In this environment, NSK’s
industrial machinery business must evolve its business
portfolio to meet these changing market needs. Although we
are already working to focus our resources on areas and
sectors that will grow in line with needs related to automation,
labor-saving, smart manufacturing, and the environment, one
area that I want to place even more emphasis on is increasing
the ratio of solution-based services̶in addition to our
product-based business̶that we offer. In other words, we aim
to build a business model that spans all phases of the product
life cycle. By monitoring the condition of bearings used in
manufacturing facilities and visualizing the remaining life, we
aim to help our customers achieve zero downtime in their
machines and plants. At the same time, we will continue to
pay close attention to how NSK products are used, and link
this knowledge to R&D ideas for new products, as well as new
technical services and improved consulting capabilities. These
will be important tasks for us as we work toward 2026.
New Initiatives Targeting Growth
NSK’s industrial machinery business has selected the
following five key initiatives targeting sustainable growth in its
6th Mid-Term Management Plan.
The first is to capture demand in growth sectors. As I
mentioned previously, we have identified several growth
sectors where NSK’s R&D, design, and quality capabilities can
be put to use to respond to changes in technology and
customer needs. These include clean energy, such as wind
power generation, railway cars̶which are once again drawing
attention as an environmentally-friendly means of mobility,
information and communications technology related to 5G,
and high-performance energy-efficient appliances utilizing IoT
technology.
The second key initiative is to deliver value leveraging
NSK’s strength in precision technology. Precision technology
is one of NSK’s core technologies, and a source of pride on
which our industrial machinery business will not compromise.
As the working population shrinks in line with declining
birthrates and the need for plant automation and labor-saving
technology grows, we will work to further accelerate
development of the precision bearings and precision ball
screws used in machine tools, semiconductor manufacturing
equipment, and robotics to maintain our dominant share of
the market and further expand our presence.
Our third key initiative is to establish industrial actuators
as a new core product. Industrial actuators are key components
that support electrification, and the size of the market is
forecast to grow. For example, one application is vibration
control actuators that use ball screws and motors in
combination to reduce vibration in railway cars. In the new
markets that will develop with the advent of electrification, we
will utilize NSK’s superior component technology to deliver
unit and systemized products, with the aim of developing this
product line into a future pillar of the Industrial Machinery
Business.
The fourth key initiative is to leverage NSK’s strengths to
expand the GAM (global aftermarket) business. We will utilize
NSK’s strengths including our brand power and technical
service capability to push forward with our key global
initiatives, including enhancing sales channel management,
developing specialists, strengthening our supply, distribution,
and inventory functions, and further promoting IT utilization.
The fifth and final key initiative is to construct a new
business utilizing condition monitoring technology. Our
condition monitoring system (CMS) technology, which enables
the actual usage conditions of NSK products to be visualized
and tracked, has won acclaim as among the best of its kind in
the industry. In addition to product development,
manufacturing, and delivery̶the key processes of a
traditional manufacturer̶we will also focus on developing
solution-based business models, such as diagnosing and
visualizing the remaining life of a product using CMS
technology, helping prevent sudden stoppages in our
customers’ machinery.
ESG and SDGs Initiatives
I believe that initiatives by the Industrial Machinery Business
can make a particularly important contribution to the
environment. Last year NSK positioned “the environment” as
one of its core values alongside safety, quality, and
compliance, and set a Group-wide target of a 60 percent
reduction in its CO2 emissions by the year 2050. We are
pushing forward with initiatives toward this goal. For example,
we have reduced energy consumption at our NSK Kyushu
plant (Fukuoka, Japan) by converting air conditioning systems
to electric heat pumps, introduced smart manufacturing
technology in the form of a new hybrid line in the Kirihara
branch of our Fujisawa plant (Kanagawa, Japan), as well as
converting heat treatment furnaces to electric technology. We
are also working to develop new, energy-efficient heat
treatment furnaces. NSK’s products are incorporated in a
diverse array of devices, and the contribution our products
make to reducing friction and energy loss is immeasurable. In
the case of motors, NSK products help improve motor
efficiency and reduce energy consumption, while electrifying
the hydraulic system in injection molding machines and
replacing it with ball screws helps lower CO2 emissions.
Additionally, the development and supply of bearings for wind
power generation̶a key renewable energy source̶directly
serves to combat global warming. At NSK we are not only
committed to reducing CO2 emissions, but are also focusing
on doing our part to achieve the SDGs associated with our
business. Going forward we aim to contribute to society while
continuing to grow as a company.
26
NSK REPORT 2019
NSK REPORT 2019
27
Sustainable Growth Strategies
New Initiatives Targeting Growth
Segment Strategy
Message from Top Management
Automotive
Business Division
Strengthening our framework
from a long-term perspective
in light of changes
in technology, society,
and our customers’ needs.
Shigeyuki Suzuki
Director, Representative, Executive Vice President,
Head of Automotive Business Division Headquarters
NSK’s Automotive Business:
Strengths and Value Creation
The strength of NSK’s automotive business lies in our
outstanding product capability, which is in turn
supported by our foundation technologies. Our products
need to be environmentally-friendly, safe, resilient, and
ensure driving comfort̶all while meeting cost and
space requirements. If vehicle electrification continues
to advance and cars are no longer equipped with
engines, the engine noise that we have become so used
to hearing will become a thing of the past, meaning that
quieter mechanical components will be required.
One of NSK’s strengths is that we have the advanced
technological capabilities required to provide solutions
in this area.
We currently hold a top-class share in the automotive
bearing market. Our track record of listening to our
customers’ needs and delivering solutions has instilled
strong trust in NSK, led to increasing orders, and
ultimately enabled us to maintain a high market share.
At an organizational level we have also established
frameworks that allow us to engage constantly with our
customers, identify their needs on a detailed level, and
use our solution-providing and product engineering
expertise to deliver maximum value. This is what sets
us apart from our competitors. Through our broad
product lineup we will continue to contribute to the
evolution of the automobile̶namely diversity in vehicle
power sources, electrification of in-vehicle components,
improved efficiency, downsizing, and noise elimination
in mechanical parts, as well as advances in steering
and control technology.
Our Vision for 2026
Although growth in global vehicle production numbers
has slowed in the short term, output is forecast to
continue growing gradually in the mid- to long-term. In
particular, the ratio of electric-powered vehicles is
predicted to grow significantly. As the automotive
industry is rocked by the waves of change in the form of
societal trends referred to as “CASE” (connected,
autonomous, sharing, electrification) as well as
technological innovation, NSK’s automotive business is
a mix of our existing products and new innovations that
set the future in motion. To grow sustainably we cannot
simply dive headfirst into new businesses; it is
important that we maintain a healthy balance with our
existing businesses. I believe that 2026 is around the
time that these major technological shifts will take
place. Furthermore, looking ahead to 2030 and 2040,
the concept of a car itself could even change
significantly. In such an event our current business
grouping of “powertrain” and “steering and actuator”
might lose significance. The conventional business
model in which companies cannot generate sales
without physical products is also breaking down, and I
believe we will require a shift from hardware to
supply capabilities, we will contribute to the improved
software, and from element components to systems. In
safety, comfort, and convenience that electrification
these circumstances, we have to evolve ourselves into a
brings.
company that can adopt a long-term perspective and
Our third key initiative is to expand the hub bearing
identify technological and societal trends and changes
business. Amid a growing need for safety and fuel
in customer needs. We need to be able to think ahead to
economy, we will leverage NSK’s technological
2030 and 2040, and to make decisions accordingly. To do
capability in delivering highly-reliable, low-torque,
this, we need to enhance our framework to allow us to
high-load products to achieve sales growth.
achieve a flexible and agile response. And in building
this framework, I believe that diversity will be the key.
The fourth key initiative is to restart growth in the
steering business. In addition to expanding and
Creating opportunities for a range of people̶including
enhancing our product lineup, we will utilize our core
both men and women, diverse nationalities, and
personnel from both engineering and administrative
backgrounds̶to come together to share ideas and
assets and mechanical and software engineering
prowess to reduce design workload and lead time, as
well as achieve greater efficiency in per-project R&D
discuss and tackle problems from the same perspective
costs. Additionally, business practices in the steering
will be essential. To make the leap to a future that is not
business differ from those in the bearing business, and
simply a continuation of our current path, we cannot
operate in isolated silos̶we need to bring everyone
under the same roof. Therefore, we will strive to build
this type of environment as we work to generate new,
future-oriented businesses and elements to target the
approaching era of technological change.
New Initiatives Targeting Growth
it is therefore important that we utilize ideas from
employees with diverse knowledge and experience, and
broaden our technological scope. In this sense,
strategic alliances are one option we may consider.
Our fifth key initiative is to expand the actuator
business. As the rebuilding of the steering business will
take several years, the actuator business will be a key
driver that will allow us to maintain our growth during
this period. With regulations on automatic braking
NSK’s automotive business has selected the following
systems tightening, I believe that in terms of braking
five key initiatives targeting sustainable growth in its 6th
distance and response, systems that employ ball
Mid-Term Management Plan.
screws will be the most rational solution. As demand
The first is to expand the powertrain business. The
continues to grow, in addition to developing superior
automotive industry will see increased diversity in
power sources from traditional internal combustion
engines (ICE) to hybrid electric vehicles (HEV) and fully
electric vehicles (EV). Demand for automatic
transmissions (AT) in ICE vehicles will grow, while the
products we will utilize NSK’s global supply capability to
further expand the business going forward.
ESG and SDGs Initiatives
number of gears used in stepped ATs will also increase.
While I previously touched on the importance of
We will work to refine our technology in this area,
including making units lighter and more compact, and
increasing friction control efficiency. This shift to EVs
will not be a simple process. Demand will likely shift
first to HEVs, and we have worked to develop
diversity, NSK’s automotive business is also focused on
the environment. Firstly, NSK’s bearings and electric
power steering systems both serve to reduce the
environmental load of the customer products they are
incorporated in. Therefore, the more our products are
HEV-oriented products accordingly. I believe these
used, the greater the environmental contribution.
efforts will eventually bear fruit. Meanwhile, for EVs, in
Furthermore, at our production sites we are shifting
addition to releasing a new traction drive unit, we will
technology used in the heat treatment process̶which
also work to propose energy efficiency and noise
reduction technologies by developing compact,
low-torque speed reducers.
consumes much of the energy used during
manufacturing̶from conventional methods to
induction heat treatment which runs on electricity.
The second key initiative is to expand the in-vehicle
Directly applying heat to the workpiece improves energy
motor business. Conventionally, most engines generate
efficiency, and we will work to further reduce our CO2
hydraulic pressure and use this pressure to generate
motion. However, these hydraulic components will be
activated by motors. It is predicted that the number of
emissions by expanding the number of facilities at
which this technology is employed. I believe that setting
targets such as the SDGs and evaluating companies’
in-vehicle motors will rise dramatically with the shift to
contribution to the global environment and humanity as
electrification, driving increased demand for motor
bearings. We must ensure that NSK responds to and
a whole is an effective way to spur companies to
reevaluate the value their business generates and
captures this growth trend. In addition to building solid
further grow their operations in ways that benefit society.
28
NSK REPORT 2019
NSK REPORT 2019
29
Sustainable Growth Strategies
New Initiatives Targeting Growth
Segment Strategy
Message from Top Management
Automotive
Business Division
Strengthening our framework
from a long-term perspective
in light of changes
in technology, society,
and our customers’ needs.
Shigeyuki Suzuki
Director, Representative, Executive Vice President,
Head of Automotive Business Division Headquarters
NSK’s Automotive Business:
Strengths and Value Creation
power sources, electrification of in-vehicle components,
improved efficiency, downsizing, and noise elimination
in mechanical parts, as well as advances in steering
The strength of NSK’s automotive business lies in our
and control technology.
outstanding product capability, which is in turn
supported by our foundation technologies. Our products
need to be environmentally-friendly, safe, resilient, and
Our Vision for 2026
ensure driving comfort̶all while meeting cost and
Although growth in global vehicle production numbers
space requirements. If vehicle electrification continues
has slowed in the short term, output is forecast to
to advance and cars are no longer equipped with
continue growing gradually in the mid- to long-term. In
engines, the engine noise that we have become so used
particular, the ratio of electric-powered vehicles is
to hearing will become a thing of the past, meaning that
predicted to grow significantly. As the automotive
quieter mechanical components will be required.
industry is rocked by the waves of change in the form of
One of NSK’s strengths is that we have the advanced
societal trends referred to as “CASE” (connected,
technological capabilities required to provide solutions
autonomous, sharing, electrification) as well as
in this area.
technological innovation, NSK’s automotive business is
We currently hold a top-class share in the automotive
a mix of our existing products and new innovations that
bearing market. Our track record of listening to our
set the future in motion. To grow sustainably we cannot
customers’ needs and delivering solutions has instilled
simply dive headfirst into new businesses; it is
strong trust in NSK, led to increasing orders, and
important that we maintain a healthy balance with our
ultimately enabled us to maintain a high market share.
existing businesses. I believe that 2026 is around the
At an organizational level we have also established
time that these major technological shifts will take
frameworks that allow us to engage constantly with our
place. Furthermore, looking ahead to 2030 and 2040,
customers, identify their needs on a detailed level, and
the concept of a car itself could even change
use our solution-providing and product engineering
expertise to deliver maximum value. This is what sets
us apart from our competitors. Through our broad
product lineup we will continue to contribute to the
significantly. In such an event our current business
grouping of “powertrain” and “steering and actuator”
might lose significance. The conventional business
model in which companies cannot generate sales
evolution of the automobile̶namely diversity in vehicle
without physical products is also breaking down, and I
believe we will require a shift from hardware to
software, and from element components to systems. In
these circumstances, we have to evolve ourselves into a
company that can adopt a long-term perspective and
identify technological and societal trends and changes
in customer needs. We need to be able to think ahead to
2030 and 2040, and to make decisions accordingly. To do
this, we need to enhance our framework to allow us to
achieve a flexible and agile response. And in building
this framework, I believe that diversity will be the key.
Creating opportunities for a range of people̶including
both men and women, diverse nationalities, and
personnel from both engineering and administrative
backgrounds̶to come together to share ideas and
discuss and tackle problems from the same perspective
will be essential. To make the leap to a future that is not
simply a continuation of our current path, we cannot
operate in isolated silos̶we need to bring everyone
under the same roof. Therefore, we will strive to build
this type of environment as we work to generate new,
future-oriented businesses and elements to target the
approaching era of technological change.
New Initiatives Targeting Growth
NSK’s automotive business has selected the following
five key initiatives targeting sustainable growth in its 6th
Mid-Term Management Plan.
The first is to expand the powertrain business. The
automotive industry will see increased diversity in
power sources from traditional internal combustion
engines (ICE) to hybrid electric vehicles (HEV) and fully
electric vehicles (EV). Demand for automatic
transmissions (AT) in ICE vehicles will grow, while the
number of gears used in stepped ATs will also increase.
We will work to refine our technology in this area,
including making units lighter and more compact, and
increasing friction control efficiency. This shift to EVs
will not be a simple process. Demand will likely shift
first to HEVs, and we have worked to develop
HEV-oriented products accordingly. I believe these
efforts will eventually bear fruit. Meanwhile, for EVs, in
addition to releasing a new traction drive unit, we will
also work to propose energy efficiency and noise
reduction technologies by developing compact,
low-torque speed reducers.
The second key initiative is to expand the in-vehicle
motor business. Conventionally, most engines generate
hydraulic pressure and use this pressure to generate
motion. However, these hydraulic components will be
activated by motors. It is predicted that the number of
in-vehicle motors will rise dramatically with the shift to
electrification, driving increased demand for motor
bearings. We must ensure that NSK responds to and
captures this growth trend. In addition to building solid
supply capabilities, we will contribute to the improved
safety, comfort, and convenience that electrification
brings.
Our third key initiative is to expand the hub bearing
business. Amid a growing need for safety and fuel
economy, we will leverage NSK’s technological
capability in delivering highly-reliable, low-torque,
high-load products to achieve sales growth.
The fourth key initiative is to restart growth in the
steering business. In addition to expanding and
enhancing our product lineup, we will utilize our core
assets and mechanical and software engineering
prowess to reduce design workload and lead time, as
well as achieve greater efficiency in per-project R&D
costs. Additionally, business practices in the steering
business differ from those in the bearing business, and
it is therefore important that we utilize ideas from
employees with diverse knowledge and experience, and
broaden our technological scope. In this sense,
strategic alliances are one option we may consider.
Our fifth key initiative is to expand the actuator
business. As the rebuilding of the steering business will
take several years, the actuator business will be a key
driver that will allow us to maintain our growth during
this period. With regulations on automatic braking
systems tightening, I believe that in terms of braking
distance and response, systems that employ ball
screws will be the most rational solution. As demand
continues to grow, in addition to developing superior
products we will utilize NSK’s global supply capability to
further expand the business going forward.
ESG and SDGs Initiatives
While I previously touched on the importance of
diversity, NSK’s automotive business is also focused on
the environment. Firstly, NSK’s bearings and electric
power steering systems both serve to reduce the
environmental load of the customer products they are
incorporated in. Therefore, the more our products are
used, the greater the environmental contribution.
Furthermore, at our production sites we are shifting
technology used in the heat treatment process̶which
consumes much of the energy used during
manufacturing̶from conventional methods to
induction heat treatment which runs on electricity.
Directly applying heat to the workpiece improves energy
efficiency, and we will work to further reduce our CO2
emissions by expanding the number of facilities at
which this technology is employed. I believe that setting
targets such as the SDGs and evaluating companies’
contribution to the global environment and humanity as
a whole is an effective way to spur companies to
reevaluate the value their business generates and
further grow their operations in ways that benefit society.
28
NSK REPORT 2019
NSK REPORT 2019
29
Sustainable Growth Strategies
The 6th Mid-Term Management Plan “New Initiatives Targeting Growth”
NSK has positioned “New Initiatives Targeting Growth” as a key concept under the 6th Mid-Term Management Plan.
Each business segment will pursue five initiatives in an effort to realize sustainable growth.
Industrial Machinery Business
Future Vision
Social Needs and Technological Innovation
Growth Area
Automation,
Labor-saving
Smart technology
Environmental
protection measures
Higher-performance robots
Factory automation
Electrification, next-generation
battery technology, renewable energy
Railway: Improved safety and comfort
Smart innovation in construction and
agricultural machinery
IoT, next-generation communications (5G)
Condition monitoring tools, remaining
life diagnosis technology
Capital Goods
Precision equipment
(Machine tools, Robots, etc.)
Infrastructure
Wind turbines/Railcars/Construction
Consumer Goods
ICT equip/High-functionality and
energy-efficient home appliances
Future Vision
Evolve and Construct
New Business Foundation
in Response to Changes
in Social Needs
Growth Exceeding
Economic Cycle
NSK’s Products
and Services
Core products
New products
New businesses
Aftermarket
5 Initiatives Targeting Growth
CMS
(Condition Monitoring
System)
FY26
Sales: +50％
（vs. FY18）
GAM
(Global
Aftermarket)
Precision
products
Comprehensive product and
service-based approach
Brand
GAM
Actuators
Core precision
products
Bearings for
industrial
infrastructure
Bearings
Shift from price-based
to value-based approach
FY18
Growth Drivers
Expand the business foundation through growth drivers such as
value provision, brand power and products + services.
FY26
Capture Demand in Growth Sectors
1
Capture demand in sectors
where markets expand
reflecting social needs
● Wind power
● Railways
● Construction
● Information and communications
● High-performance,
energy-saving home appliances
2
Deliver Value Leveraging NSK’s Strength in Precision Technology
Further expand NSK’s presence in demand areas including
machine tools, robotics and automation
Higher specs, improvement in environmental performance,
labor-saving and reduction of downtime
New Proposal and Contribution to Required Performance (Machine Tools)
Main spindle
● Rotation accuracy
● Heat-proof
● High-rigidity
Precision positioning
● Longer precision life
● High-speed less noise
● Low abrasion
CMS
Main
spindle
Condition monitoring
● Reduction of downtime
Ball screw
30
NSK REPORT 2019
3
Establish Industrial Actuators as a New Core Product
Market expands as a key component supporting electrification
● For railcars, construction, robots and medical use
● Need for automation accelerates, electrification in pneumatic/hydraulic devices
● Improved comfort, safety and environmental performance
JR East cruise train “Train Suite Shiki-shima”
(photo: JR East)
NSK vibration control actuator
(left: Actuator; right: Driver)
A ball screw type vibration control actuator that can improve train ride quality (comfort)
and enable higher travel speeds. This product is installed in the JR East Train Suite
Shiki-shima, a luxury sleeper train that came into service from May 1, 2017.
4
Leverage NSK’s Strengths to Expand the GAM Business
NSK’s
Strengths
● High-reliability products
● Engineering support, service response
→Reduce end-user maintenance costs
Continue Promoting 4 Fundamental Policies
Strengthen channel management
Cultivate specialists
Supply/Logistics/Inventory
Promote utilization of IT
AIP asset efficiency program
5
Construct a New Business Utilizing Condition Monitoring Technology
Product-based + Solution-based business
Contribute to customers’productivity and quality improvement
Provide technology service and solution services
Establish the CMS Development Center: integrate business
development and engineering development
Product-based
business
Operation
Maintenance
Marketing
Planning
Customer/ End user
Ordering
Purchasing
Development
Design
Improve productivity
Improve quality
Smart shop floor
Solution-based
business
by providing engineering
and solution services
Future Vision
Establish New
Presence by Responding
to Innovations in
Vehicle Technology
Achieve Sales Growth that
Surpasses Growth in Global
Vehicle Production
FY26
Sales: +50％
（vs. FY18）
Automotive Business
Future Vision
Vehicle Needs/Technological Innovation
Areas NSK contributes to:
NSK’s Products
Mobility
Environment
Safety
Comfort Convenience
C A S E
Connected Autonomous Shared
Electric
Electrification of power source
and in-vehicle parts
Technology to support
mechanical parts, high-efficiency,
weight reduction, noise reduction
Advanced steering/
control functions
Powertrain products
Bearings for in-vehicle motors
HUB bearings
Steering
Actuators
5 Initiatives Targeting Growth
1
Expand the Powertrain Business
Vehicle Production Volume Forecast by Power Source
Respond to Diversified Powertrain in line with
EV
HEV
(Unit: Million vehicles)
ICE
Increase in global production volume
100
107
93
87
5
2
FY18
79
i n e l e c t r i c - p o w e r e d v e h i c l e s
66
E x p a n s i o n
17
4
FY21
33
8
FY24
(Source： IHS Automotive, NSK forecast)
116
53
49
14
FY30
AT (Automatic Transmission)
ICE＋HEV: demand expansion to continue
● Higher installation rate, multistep AT, largest customer
increasing volume
● Increasing technological requirements
Compact, lightweight units, more efficient friction control
Shift to Electric-Powered Vehicles
ICE (Internal Combustion Engine)
Respond to expansion in AT systems and multistep AT
HEV (Hybrid Electric Vehicle)
Increased variation in bearings used due to diversification in
transmission systems
● Deliver value through packaged optimized design proposals
EV (Electric Vehicle)
New products: Traction drive unit/systems
Technology proposals for motor reducers
and 2-speed transmissions
● Improve electric-efficiency through
lightweight, low-torque products,
noise reduction
FY26
Sales: +80％
（vs. FY18）
Steering & Actuator Business
Acceleration in Autonomous Driving Technology and Electrification
Traction Reducer
FY26
Sales: +30％
（vs. FY18）
2
8
6
4
2
0
3
Expand the In-Vehicle Motor Business
Dramatic Increase in In-Vehicle Motors due to Electrification
Improve safety, comfort and convenience
● Electric brakes, fan motors, sliding seats
Differentiate through technological capability and
improve electrical efficiency
● Low noise, low torque
Establish supply structure
(Billion units)
Number of In-Vehicle Motors
FY2018
FY2021
FY2024
FY2030
(NSK forecast)
Expand the HUB Bearing Business
Growing Need for Safety and Fuel Efficiency
Expand sales by leveraging engineering ability
● High-reliability, low torque, high-load
FY26
Sales: +30％
（vs. FY18）
Restart Growth in the Steering Business
Extend product range
Leverage “core assets” of mechanical parts and software
● Reduce design man-hours, lead time
● Improve efficiency in R&D costs per project
Utilize strategic alliances
4
5
Expand the Actuator Business
Ball screws for brakes
Develop new applications
● Steer-by-wire etc.
Steering & Actuator Sales
6th MTP
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26
Force Feedback Actuator for Steer-by-Wire
(left) Worm reduction gear type
(right) Coaxial reduction gear type
NSK REPORT 2019
31
Sustainable Growth Strategies
The 6th Mid-Term Management Plan “New Initiatives Targeting Growth”
NSK has positioned “New Initiatives Targeting Growth” as a key concept under the 6th Mid-Term Management Plan.
Each business segment will pursue five initiatives in an effort to realize sustainable growth.
Industrial Machinery Business
Future Vision
Automation,
Labor-saving
Smart technology
Environmental
protection measures
FY26
Sales: +50％
（vs. FY18）
GAM
(Global
Aftermarket)
Precision
products
Higher-performance robots
Factory automation
Electrification, next-generation
battery technology, renewable energy
Railway: Improved safety and comfort
Smart innovation in construction and
agricultural machinery
IoT, next-generation communications (5G)
Condition monitoring tools, remaining
life diagnosis technology
Capital Goods
Precision equipment
(Machine tools, Robots, etc.)
Infrastructure
Wind turbines/Railcars/Construction
Consumer Goods
ICT equip/High-functionality and
energy-efficient home appliances
Future Vision
Evolve and Construct
New Business Foundation
in Response to Changes
in Social Needs
Growth Exceeding
Economic Cycle
NSK’s Products
and Services
Core products
New products
New businesses
Aftermarket
3
4
5
5 Initiatives Targeting Growth
(Condition Monitoring
CMS
System)
Comprehensive product and
service-based approach
Brand
GAM
Actuators
Core precision
products
Bearings for
industrial
infrastructure
Bearings
Shift from price-based
to value-based approach
FY18
Growth Drivers
FY26
Expand the business foundation through growth drivers such as
value provision, brand power and products + services.
Capture Demand in Growth Sectors
Capture demand in sectors
where markets expand
reflecting social needs
● Wind power
● Railways
● Construction
● Information and communications
● High-performance,
energy-saving home appliances
1
2
Deliver Value Leveraging NSK’s Strength in Precision Technology
Further expand NSK’s presence in demand areas including
machine tools, robotics and automation
Higher specs, improvement in environmental performance,
labor-saving and reduction of downtime
New Proposal and Contribution to Required Performance (Machine Tools)
Main spindle
● Rotation accuracy
● Heat-proof
● High-rigidity
CMS
Main
spindle
Condition monitoring
● Reduction of downtime
Ball screw
Precision positioning
● Longer precision life
● High-speed less noise
● Low abrasion
Establish Industrial Actuators as a New Core Product
Market expands as a key component supporting electrification
● For railcars, construction, robots and medical use
● Need for automation accelerates, electrification in pneumatic/hydraulic devices
● Improved comfort, safety and environmental performance
JR East cruise train “Train Suite Shiki-shima”
NSK vibration control actuator
(photo: JR East)
(left: Actuator; right: Driver)
A ball screw type vibration control actuator that can improve train ride quality (comfort)
and enable higher travel speeds. This product is installed in the JR East Train Suite
Shiki-shima, a luxury sleeper train that came into service from May 1, 2017.
Leverage NSK’s Strengths to Expand the GAM Business
NSK’s
Strengths
● High-reliability products
● Engineering support, service response
→Reduce end-user maintenance costs
Continue Promoting 4 Fundamental Policies
Strengthen channel management
Cultivate specialists
Supply/Logistics/Inventory
Promote utilization of IT
AIP asset efficiency program
Construct a New Business Utilizing Condition Monitoring Technology
Product-based + Solution-based business
Contribute to customers’productivity and quality improvement
Provide technology service and solution services
Establish the CMS Development Center: integrate business
development and engineering development
Product-based
business
Operation
Maintenance
Marketing
Planning
Customer/ End user
Ordering
Purchasing
Development
Design
Improve productivity
Improve quality
Smart shop floor
Solution-based
business
by providing engineering
and solution services
30
NSK REPORT 2019
Social Needs and Technological Innovation
Growth Area
Vehicle Needs/Technological Innovation
Areas NSK contributes to:
NSK’s Products
Automotive Business
Future Vision
Mobility
Environment
Safety
Comfort Convenience
C A S E
Connected Autonomous Shared
Electric
Electrification of power source
and in-vehicle parts
Technology to support
mechanical parts, high-efficiency,
weight reduction, noise reduction
Advanced steering/
control functions
Powertrain products
Bearings for in-vehicle motors
HUB bearings
Steering
Actuators
Future Vision
Establish New
Presence by Responding
to Innovations in
Vehicle Technology
Achieve Sales Growth that
Surpasses Growth in Global
Vehicle Production
5 Initiatives Targeting Growth
1
Expand the Powertrain Business
Vehicle Production Volume Forecast by Power Source
Increase in global production volume
HEV
ICE
EV
(Unit: Million vehicles)
93
87
5
2
FY18
100
107
79
i n e l e c t r i c - p o w e r e d v e h i c l e s
66
E x p a n s i o n
17
4
FY21
33
8
FY24
116
53
49
14
FY30
Respond to Diversified Powertrain in line with
Shift to Electric-Powered Vehicles
FY26
Sales: +50％
（vs. FY18）
ICE (Internal Combustion Engine)
Respond to expansion in AT systems and multistep AT
HEV (Hybrid Electric Vehicle)
Increased variation in bearings used due to diversification in
transmission systems
● Deliver value through packaged optimized design proposals
(Source： IHS Automotive, NSK forecast)
AT (Automatic Transmission)
ICE＋HEV: demand expansion to continue
● Higher installation rate, multistep AT, largest customer
increasing volume
● Increasing technological requirements
Compact, lightweight units, more efficient friction control
EV (Electric Vehicle)
New products: Traction drive unit/systems
Technology proposals for motor reducers
and 2-speed transmissions
● Improve electric-efficiency through
lightweight, low-torque products,
noise reduction
2
Expand the In-Vehicle Motor Business
Dramatic Increase in In-Vehicle Motors due to Electrification
FY26
Sales: +80％
（vs. FY18）
Improve safety, comfort and convenience
● Electric brakes, fan motors, sliding seats
Differentiate through technological capability and
improve electrical efficiency
● Low noise, low torque
Establish supply structure
(Billion units)
Number of In-Vehicle Motors
8
6
4
2
0
FY2018
FY2021
FY2024
FY2030
(NSK forecast)
3
Expand the HUB Bearing Business
Growing Need for Safety and Fuel Efficiency
Expand sales by leveraging engineering ability
● High-reliability, low torque, high-load
FY26
Sales: +30％
（vs. FY18）
Traction Reducer
FY26
Sales: +30％
（vs. FY18）
Steering & Actuator Business
Acceleration in Autonomous Driving Technology and Electrification
Restart Growth in the Steering Business
4
Extend product range
Leverage “core assets” of mechanical parts and software
● Reduce design man-hours, lead time
● Improve efficiency in R&D costs per project
Utilize strategic alliances
5
Expand the Actuator Business
Ball screws for brakes
Develop new applications
● Steer-by-wire etc.
Steering & Actuator Sales
6th MTP
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26
Force Feedback Actuator for Steer-by-Wire
(left) Worm reduction gear type
(right) Coaxial reduction gear type
NSK REPORT 2019
31
Sustainable Growth Strategies
Financial Strategy / Policy on Shareholder Returns
Looking Back on the Financial Results of the 5th MTP
NSK Financial Logic Tree
The year ended March 2019 saw a decline in ROE due to lower profits. Despite this, NSK achieved its numerical targets of an ROE
of 10% or higher, an A-level credit rating and a net D/E ratio of 0.3 times, as raised in the 5th Mid-Term Management Plan.
The Company recognizes that it steadily and soundly improved its financial health during the 5th Mid-Term Management Plan.
The 4th MTP (Mar/2016) The 5th MTP (Mar/2019)
Comparison
Evaluation and Comments
Total assets
¥1,032.4 billion
¥1,086.5 billion
＋¥54.1 billion
Expanded business scale
Equity attributable to owners
of the parent (Shareholders’ equity)
¥454.7 billion
¥536.7 billion
＋¥82.0 billion
Increased due to profit accumulation
Cash and cash equivalents
¥175.5 billion
¥130.0 billion
-¥45.6 billion
Interest-bearing debt
¥278.2 billion
¥274.8 billion
Ratio of net worth to total capital
44.0％
49.4％
Net D/E ratio
0.23 times
0.27 times
-¥3.4 billion
＋5.4
percentage points
＋0.04
Increased capital expenditures
Strengthened shareholder returns
Appropriate control of interest-bearing debt
Ensured financial stability
Less than the MTP target of 0.3 times
Total return ratio (3 years)
ROE
26.3％
14.3％
56.9％
10.4％
＋30.6
Strengthened shareholder returns
Acquired treasury shares worth ¥35.0 billion
-3.9
percentage points
Declined due to lower profits
Achieved the MTP target of 10% or higher
The 6th MTP Financial Strategy / Policy on Shareholder Returns Overview
Total Shareholders’ Return (TSR)
(1) Growth with Profitability
Sustainably achieving “Growth with Profitability” is the most
important aspect for generating cash flows and making capital
expenditures and R&D investments that lead to future growth, as well
as for paying stable dividends to shareholders.
We believe achieving an ROE that exceeds the investment return
(cost of capital) expected by shareholders and investors can be
considered the “mission” of a publicly listed company. NSK has set a
target for ROE of at least 10% in our 6th Mid-Term Management Plan,
which exceeds our cost of capital as estimated based on past share
trends, business characteristics and the current state of the stock
market. We believe maintaining this target over the medium term
could contribute to further improvement in shareholder value.
(2) Maintenance in Stabilization of Financial Base
“Maintenance in Stabilization of Financial Base” is another critical
topic for supporting NSK’s sustainable growth and for withstanding
cyclical (economic fluctuation) impacts.
NSK has been able to steadily improve its ability to generate
cash flow compared with the past, and has also stabilized its financial
base. (Please see the 11-year summary on P. 16.) NSK recognizes
that continuing to keep its net D/E ratio around 0.3 times and
maintaining a ratio of net worth to total capital of around 50% will
enable the Company to ensure financial stability.
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.
Rating and Investment
Information, Inc. (R&I)
A
Japan Credit Rating Agency,
Ltd. (JCR)
A＋
(3) Stabilization of Shareholder Returns
One of NSK’s core management policies is “Stabilization of Shareholder
Returns.”
NSK indicated a numerical target of 30% for its dividend payout ratio
for the first time in the 5th Mid-Term Management Plan. As part of the
6th Mid-Term Management Plan, NSK is working to further enhance
shareholder returns, and has thus established a dividend payout ratio of
30 – 50% and raised a target of ¥40 or higher for the per share dividend.
● ROE of 10% or more
Pursuit of capital
efficiency exceeding
the cost of capital
● Dividend payout ratio of 30 - 50%
¥40/share or more (6th MTP)
● Acquisition of treasury shares,
Agile capital policies
Total return ratio (3 years) approximately 50%
Growth with
Profitability
Stabilization
of Shareholder
Returns
Balance investment in
future growth with
shareholder returns under a
stable financial structure
Maintenance
in Stabilization
of Financial
Base
● Net D/E ratio of around 0.3 times
● Ratio of net worth to total capital of around 50%
Maintain an A-level credit rating to
support growth and enable the
Company to withstand cyclical impact
In addition to returning profits through dividends, NSK recognizes
that agile capital policy execution based on share buybacks is another
option. NSK intends to appropriately and flexibly execute share buybacks
taking into account its cash position and stock market trends. During the
three-year period covered by the 6th Mid-Term Management Plan, NSK is
targeting a total return ratio of 50%.
Earnings per
share growth
+ Stable dividend
Growth capacity
Profitability
Increase
shareholder value
Dividend growth +
( )
Rising stock price
Operational Excellence
Challenging Innovation
Management Strategies
Grow existing core
businesses
Grow new businesses and
fields
Build the business base
and strengthen resources
(Personnel, Technology,
Organization, Information)
ESG Management
The 6th Mid-Term
Management Plan Targets
●Net sales: ¥1 trillion
●Annual sales
growth rate: 2%
●Operating income
margin: 8% or more
●R&D expenses to
sales ratio: 3 – 4%
Major Reference Indicators
●Core sector ratio
●Number of new products
●Environmentally friendly
product developments
●Capital expenditures
●R&D ratio
●Unadjusted ratio
●Customer satisfaction level
●Number of patents held
●CO2 emissions
●Employee satisfaction level
●Lost-worktime injury
frequency rate
●Price earnings ratio (PER)
●Return on shareholders’
equity (ROE)
●Dividend payout ratio
●Acquisition of treasury shares
(agile capital policies)
●Minimized share price volatility
Appropriate
shareholder returns
Manage with an awareness
of capital cost
●Total return ratio: 50%
(3 year target)
Lower cost of capital
Sound fiscal standing
Maintain a stable financial
base that supports
sustainable growth
●A-level rating or higher
●Ratio of net worth to
total capital: 50％
●Free cash flows
●Net D/E ratio
Along with achieving an ROE that exceeds the cost of capital over the mid-term, increasing TSR acquired through dividends and a rising
stock price is also important.
Looking at the relatively short-term (one, three and five years), NSK’s TSR has been affected by demand adjustments over the most
recent period and a depressed stock price due to lower steering-related sales, which led the stock price to underperform the TOPIX and
the TOPIX machinery sector. Looking over the longer 10-year period, however, NSK recognizes that it has striven to realize stable
shareholder returns, improved share performance above both TOPIX and the TOPIX machinery sector and achieved a TSR that exceeds
the cost of capital over the mid- to long-term.
Investment Period
1-Year
3-Years
5-Years
10-Years
Cumulative/Annual Rate
Cumulative
Annual Rate
Cumulative
Annual Rate
Cumulative
Annual Rate
NSK
TOPIX
TOPIX Machinery
-24.5%
-5.0%
-12.9%
12.1%
26.2%
33.5%
3.9%
8.1%
10.1%
14.6%
47.1%
39.1%
2.8%
8.0%
6.8%
238.2%
153.3%
213.1%
13.0%
9.7%
12.1%
*TSR (Total Shareholders’ Return): Total return on investment including capital gains and dividends *Annual rate based on the geometric mean
*Created by the Company, based on Bloomberg data
NSK’s Share Price Trends (10-Year Period)
NSK
TOPIX
TOPIX Machinery
Share Price Trends by Fiscal Year
Fiscal Year High (Yen)
Low (Yen)
Fiscal Year-End
(Yen)
Volatility
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
750
836
815
758
1,360
1,815
2,120
1,739
1,916
1,488
366
495
458
414
646
1,023
910
691
1,261
885
738
717
637
715
1,062
1,758
1,030
1,592
1,426
1,037
47.6%
37.4%
36.7%
36.5%
45.7%
32.6%
39.0%
44.3%
28.5%
26.1%
(Index)
600
500
400
300
200
100
0
2009/3
2010/3
2011/3 2012/3
2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3
*Volatility refers to the standard deviation annualized rate based
*Share price index trends including dividends (March 31, 2009 = 100)
on the daily closing price.
Policy on Cross-Shareholding
NSK aims to reduce the cross-holding of shares deemed to have little benefit in increasing mid- to long-term corporate value.
Regarding the appropriateness of cross-shareholdings, NSK conducts quantitative and qualitative evaluations on an annual basis to
determine whether each individual shareholding is delivering acceptable benefits in relation to the Company’s capital cost. We will
sell any cross-shareholdings whose possession cannot be justified, taking into account stock prices and market trends.
The number of cross-shareholdings (disclosed in the Annual Securities Report) totaled 136 stocks as of the end of March 2010.
However, this number has been reduced to 79 stocks as of the end of March 2019 (reduction of 57 stocks over nine years).
32
NSK REPORT 2019
NSK REPORT 2019
33
Looking Back on the Financial Results of the 5th MTP
NSK Financial Logic Tree
Earnings per
share growth
+ Stable dividend
Growth capacity
Profitability
Increase
shareholder value
Dividend growth +
( )
Rising stock price
Operational Excellence
Challenging Innovation
Management Strategies
Grow existing core
businesses
Grow new businesses and
fields
Build the business base
and strengthen resources
(Personnel, Technology,
Organization, Information)
ESG Management
The 6th Mid-Term
Management Plan Targets
●Net sales: ¥1 trillion
●Annual sales
growth rate: 2%
●Operating income
margin: 8% or more
●R&D expenses to
sales ratio: 3 – 4%
Appropriate
shareholder returns
Manage with an awareness
of capital cost
●Total return ratio: 50%
(3 year target)
Lower cost of capital
Major Reference Indicators
●Core sector ratio
●Number of new products
●Environmentally friendly
product developments
●Capital expenditures
●R&D ratio
●Unadjusted ratio
●Customer satisfaction level
●Number of patents held
●CO2 emissions
●Employee satisfaction level
●Lost-worktime injury
frequency rate
●Price earnings ratio (PER)
●Return on shareholders’
equity (ROE)
●Dividend payout ratio
●Acquisition of treasury shares
(agile capital policies)
●Minimized share price volatility
Sound fiscal standing
Maintain a stable financial
base that supports
sustainable growth
●A-level rating or higher
●Ratio of net worth to
total capital: 50％
●Free cash flows
●Net D/E ratio
The 6th MTP Financial Strategy / Policy on Shareholder Returns Overview
Total Shareholders’ Return (TSR)
Along with achieving an ROE that exceeds the cost of capital over the mid-term, increasing TSR acquired through dividends and a rising
stock price is also important.
Looking at the relatively short-term (one, three and five years), NSK’s TSR has been affected by demand adjustments over the most
recent period and a depressed stock price due to lower steering-related sales, which led the stock price to underperform the TOPIX and
the TOPIX machinery sector. Looking over the longer 10-year period, however, NSK recognizes that it has striven to realize stable
shareholder returns, improved share performance above both TOPIX and the TOPIX machinery sector and achieved a TSR that exceeds
the cost of capital over the mid- to long-term.
Investment Period
NSK
TOPIX
TOPIX Machinery
1-Year
Cumulative/Annual Rate
-24.5%
-5.0%
-12.9%
3-Years
5-Years
10-Years
Cumulative
Annual Rate
Cumulative
Annual Rate
Cumulative
Annual Rate
12.1%
26.2%
33.5%
3.9%
8.1%
10.1%
14.6%
47.1%
39.1%
2.8%
8.0%
6.8%
238.2%
153.3%
213.1%
13.0%
9.7%
12.1%
*TSR (Total Shareholders’ Return): Total return on investment including capital gains and dividends *Annual rate based on the geometric mean
*Created by the Company, based on Bloomberg data
NSK’s Share Price Trends (10-Year Period)
Share Price Trends by Fiscal Year
Sustainable Growth Strategies
Financial Strategy / Policy on Shareholder Returns
The year ended March 2019 saw a decline in ROE due to lower profits. Despite this, NSK achieved its numerical targets of an ROE
of 10% or higher, an A-level credit rating and a net D/E ratio of 0.3 times, as raised in the 5th Mid-Term Management Plan.
The Company recognizes that it steadily and soundly improved its financial health during the 5th Mid-Term Management Plan.
The 4th MTP (Mar/2016) The 5th MTP (Mar/2019)
Comparison
Evaluation and Comments
Total assets
¥1,032.4 billion
¥1,086.5 billion
＋¥54.1 billion
Expanded business scale
Equity attributable to owners
of the parent (Shareholders’ equity)
¥454.7 billion
¥536.7 billion
＋¥82.0 billion
Increased due to profit accumulation
Cash and cash equivalents
¥175.5 billion
¥130.0 billion
-¥45.6 billion
Increased capital expenditures
Strengthened shareholder returns
Interest-bearing debt
¥278.2 billion
¥274.8 billion
-¥3.4 billion
Appropriate control of interest-bearing debt
Ratio of net worth to total capital
44.0％
49.4％
＋5.4
percentage points
Ensured financial stability
Net D/E ratio
0.23 times
0.27 times
Total return ratio (3 years)
ROE
26.3％
14.3％
56.9％
10.4％
＋0.04
＋30.6
Less than the MTP target of 0.3 times
Strengthened shareholder returns
Acquired treasury shares worth ¥35.0 billion
-3.9
Declined due to lower profits
percentage points
Achieved the MTP target of 10% or higher
(1) Growth with Profitability
Sustainably achieving “Growth with Profitability” is the most
important aspect for generating cash flows and making capital
expenditures and R&D investments that lead to future growth, as well
as for paying stable dividends to shareholders.
We believe achieving an ROE that exceeds the investment return
(cost of capital) expected by shareholders and investors can be
considered the “mission” of a publicly listed company. NSK has set a
target for ROE of at least 10% in our 6th Mid-Term Management Plan,
which exceeds our cost of capital as estimated based on past share
trends, business characteristics and the current state of the stock
market. We believe maintaining this target over the medium term
could contribute to further improvement in shareholder value.
(2) Maintenance in Stabilization of Financial Base
“Maintenance in Stabilization of Financial Base” is another critical
topic for supporting NSK’s sustainable growth and for withstanding
cyclical (economic fluctuation) impacts.
NSK has been able to steadily improve its ability to generate
cash flow compared with the past, and has also stabilized its financial
base. (Please see the 11-year summary on P. 16.) NSK recognizes
that continuing to keep its net D/E ratio around 0.3 times and
maintaining a ratio of net worth to total capital of around 50% will
enable the Company to ensure financial stability.
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.
Rating and Investment
Information, Inc. (R&I)
A
Japan Credit Rating Agency,
Ltd. (JCR)
A＋
● Dividend payout ratio of 30 - 50%
● ROE of 10% or more
¥40/share or more (6th MTP)
Pursuit of capital
efficiency exceeding
the cost of capital
● Acquisition of treasury shares,
Agile capital policies
Total return ratio (3 years) approximately 50%
Growth with
Profitability
Stabilization
of Shareholder
Returns
Balance investment in
future growth with
shareholder returns under a
stable financial structure
Maintenance
in Stabilization
of Financial
Base
● Net D/E ratio of around 0.3 times
● Ratio of net worth to total capital of around 50%
Maintain an A-level credit rating to
support growth and enable the
Company to withstand cyclical impact
(Index)
600
NSK
TOPIX
TOPIX Machinery
500
400
300
200
100
0
2009/3
2010/3
2011/3 2012/3
2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3
*Share price index trends including dividends (March 31, 2009 = 100)
Low (Yen)
Fiscal Year High (Yen)
366
750
2009
495
836
2010
458
815
2011
414
758
2012
646
1,360
2013
1,023
1,815
2014
910
2,120
2015
691
1,739
2016
1,261
1,916
2017
885
1,488
2018
*Volatility refers to the standard deviation annualized rate based
on the daily closing price.
Volatility
47.6%
37.4%
36.7%
36.5%
45.7%
32.6%
39.0%
44.3%
28.5%
26.1%
738
717
637
715
1,062
1,758
1,030
1,592
1,426
1,037
Fiscal Year-End
(Yen)
(3) Stabilization of Shareholder Returns
In addition to returning profits through dividends, NSK recognizes
One of NSK’s core management policies is “Stabilization of Shareholder
that agile capital policy execution based on share buybacks is another
Returns.”
option. NSK intends to appropriately and flexibly execute share buybacks
NSK indicated a numerical target of 30% for its dividend payout ratio
taking into account its cash position and stock market trends. During the
for the first time in the 5th Mid-Term Management Plan. As part of the
three-year period covered by the 6th Mid-Term Management Plan, NSK is
6th Mid-Term Management Plan, NSK is working to further enhance
targeting a total return ratio of 50%.
shareholder returns, and has thus established a dividend payout ratio of
30 – 50% and raised a target of ¥40 or higher for the per share dividend.
Policy on Cross-Shareholding
NSK aims to reduce the cross-holding of shares deemed to have little benefit in increasing mid- to long-term corporate value.
Regarding the appropriateness of cross-shareholdings, NSK conducts quantitative and qualitative evaluations on an annual basis to
determine whether each individual shareholding is delivering acceptable benefits in relation to the Company’s capital cost. We will
sell any cross-shareholdings whose possession cannot be justified, taking into account stock prices and market trends.
The number of cross-shareholdings (disclosed in the Annual Securities Report) totaled 136 stocks as of the end of March 2010.
However, this number has been reduced to 79 stocks as of the end of March 2019 (reduction of 57 stocks over nine years).
32
NSK REPORT 2019
NSK REPORT 2019
33
Sustainable Growth Strategies
Creating Value with Stakeholders
NSK’s business is founded on a trust relationship with all of our stakeholders, and we deeply feel the importance
of building even more fruitful relationships through two-way communication.
Together with each of our stakeholders we aim to generate a range of value, ultimately contributing to the
realization of a sustainable society while also achieving growth as a company.
Our Relationship with Stakeholders
Main Engagement
Channels
Primary Benefits/Values, Interests,
and Expectations of Stakeholders
Examples of Themes for
Further Value Creation
Relationships with Stakeholders
Main Engagement
Primary Benefits/Values, Interests,
Examples of Themes for
Channels
and Expectations of Stakeholders
Further Value Creation
s
r
e
m
o
t
s
u
C
s
e
e
y
o
l
p
m
E
s
r
e
i
l
p
p
u
S
NSK’s customers and sales destinations
encompass the machine manufacturers, auto
and automotive components makers, distributors
and sales outlets that purchase our products
directly, as well as the end users who utilize our
products in the various machines produced by
direct customers. Being recognized for our
experience and track record in QCDDSM, sales
strength, brand recognition, global development
capabilities, and reliability as a partner is what
leads to seizing new business and capturing
market share, and this is what enables
sustainable growth. In addition to deepening our
understanding of the needs of manufacturers,
distributors and sales outlets through everyday
sales activities and technological exchanges, we
also strive to address the expectations of end
users. By effectively incorporating direct
customer and end-user perspectives into our
business activities, products and services, NSK
aims to create values as a part of efforts to
realize an affluent society, promote
environmental conservation and establish an
advanced technological society.
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. 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.
NSK’s businesses, which reach all corners of
the globe, as well as the competitiveness they
possess, are underpinned by numerous
suppliers around the world through the
provision of superior components and raw
materials. 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, develop
new technologies, protect the environment,
and ensure that human rights are fully
respected. These sincere efforts are essential
for environmental conservation and mutual
prosperity along the entire global supply
chain.
34
NSK REPORT 2019
● Everyday sales activities
● Technological exchanges
● Guest engineers
● Showrooms
● Exhibitions
● Joint research/joint
development
● Information disclosure
through surveys, etc.
● NSK report
（Integrated report）
● Sustainability report
● Website
● Manager/team dialogue
● Objective-based
management, performance
review systems
● Internal financial results
briefings
● Intranet, internal
● Internal job posting,
Workplace and Career
Aspirations Survey
● Vision 2026 initiatives
● Training, self-improvement
seminars
● Employee awareness
surveys
● Labor union negotiations
● QC cycle/cell activities
● Improvement proposal
systems
● Internal whistleblowing
system
● Daily procurement activities
● Procurement Policy
Briefings
● NSK Supplier CSR
Guidelines “self-diagnosis
sheet”
● Conflict minerals surveys
● Green Procurement
Standards
● Regular meetings on
technology and quality
● Supplier Safety
Confirmation System
● Local supplier
audits/interactions
● VA/VE
● Joint research/joint
development
● Whistleblowing system
● NSK report
● Sustainability report
●Creating and
proposing new
value from an
end-user
perspective
●Proposals for
supply from
optimal locations
that leverage
global
production sites
● Q: Quality-Offering of
high-quality products,
high-quality services
● C: Cost-Appropriate pricing
● D: Delivery-Stability in delivery,
supply chain management,
and strict adherence to
laws and regulations
● D: Development-Leveraging
technology innovation,
finding solutions to issues,
development of partners
and development of
products and technologies
that contribute to the
environment
● S: Service-Support customers
at our global sites in each
region, reliability, security
and trouble shooting
● M: Management-Management
capabilities that support the
above
● Engaging workplaces
●Increase
(Respect of fundamental
rights at work, equal
opportunity, creating safe
and inspiring workplaces,
health and productivity
management)
workforce, diversity and
inclusion, work-life balance,
flexibility with working styles
● Providing opportunities for
growth, self-development
and educational
opportunities
opportunities for
dialogue with
management,
vitalize two-way
communication
●Review systems to
achieve more
diverse work
styles
●Promote
situational
understanding
and improvement
activities through
regular
awareness
surveys
●Further enhance
educational and
training programs
● Proper, fair and transparent
●Ongoing
transactions that give
consideration to society and
the environment
● Joint development
(materials, components,
grease, etc.)
● Support for enhanced quality
● Promoting CSR activities
throughout the supply chain
● Collaboration when
disasters occur
maintenance
and
strengthening of
favorable and
strong
relationships
●Enhance level of
CSR
management
throughout the
supply chain
toward realizing
a sustainable
society
newsletters, digital signage
● Leveraging a diverse
s
e
i
t
i
n
u
m
m
o
C
l
a
c
o
L
s
r
o
t
s
e
v
n
I
d
n
a
s
r
e
d
l
o
h
e
r
a
h
S
s
n
o
i
t
a
r
e
n
e
G
e
r
u
t
u
F
NSK’s globally expanding business
depends on building harmonious
● Activities to contribute to
● Mutual harmony and benefit
●Increasing the
local communities (donation
with communities
relationships with local communities,
drives, cleanup activities,
● Contributing to creation of
and fulfilling our corporate responsibility
etc.)
to contribute to the development of
● Plant festivals
employment/regional
development
those communities. NSK aims to grow
● Cooperating in community
● Preserving the global
as a company that is needed, loved, and
events, welfare programs
environment, local
respected by communities around the
● Information exchange with
environment
opportunities for
exchange so as to
promote an
understanding of
safety and security
and raise the degree
of trust
world. We strive to respect cultures,
customs, and needs by engaging,
communicating, and working closely
with each community to achieve
administrative bodies, local
public organizations, others
(understand and respond to
demands and expectations)
● Reducing environmental
●Ample activities to
impact (curbing emissions
from business activities)
● Consideration concerning
contribute to
communities
mutually beneficial development and the
● Exchange with industry
noise
protection of local environments.
groups
● Safe operations
● Improved Corporate Value
●Securing and raising
As providers of financial capital,
shareholders and investors 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.
● Proper stock prices
● Realizing shareholder
returns that exceed capital
● Providing information in a
proper, fair and timely
manner, and have sincere
dialogue
● Proactively taking initiatives
and making disclosures for
global social issues, and
CSR/ESG
＊The 158th Ordinary General
costs
● Set date to avoid periods
concentrated with the
shareholders’ meetings of
other companies
Meeting of Shareholders
- Number of shareholders
present: 154
- Ratio of shareholder voting
rights exercised: 83.9％
● Plant tours for shareholders
● Financial conferences
● President’s small meetings
● Roadshows outside Japan
● Securities firm-sponsored
conferences
● Interviews
● Engagement visits
● Business briefings
＊Total number of dialogue
opportunities in fiscal 2018:
527 companies
● Briefings for individual
investors
＊Total number of individual
investors participating in
fiscal 2018: 314 in 9 briefings
● NSK report
● Sustainability report
● Website
understanding and
agreement of capital
market participants
with regard to
management policy,
business strategy
and financial strategy
●Expanding support of
shareholders that
contributes to fair
determination of
share prices and
sustainable growth,
and realizing a
balanced
shareholder
composition
●Ample engagement
with shareholders
and investors, and
strengthening the
tools to accomplish
that
●Enhancing disclosure
and heightening
appeal of efforts with
regard to CSR/ESG
issues
Realizing a safe and prosperous society
● Joint research
● Generating and providing
●Ongoing
that will last long into the future is
● NSK Foundation for the
indispensable not only for NSK but also
Advancement of Mechatronics
● NSK Scholarship Foundation
● Providing products/technical
future
opportunities for the growth
of the next generation that
will be responsible for the
implementation of
support to nurture
the next generation
of human talent
generation that will be responsible for
● Science classes for children
importance of monozukuri
standpoint
materials
● Conveying the enjoyment and
from a long-term
● “Bearing Lab” display booth at
● Passing down a safe society
●Working through the
for the growth and development of
society as a whole. To support the
healthy development of the next
shaping future society, we conduct
science classes, offer internships, and
provide scholarships as efforts geared
the Science Museum (Tokyo,
and an abundant natural
Japan)
environment
toward long-term growth. Through these
● Internships
activities, we aim to realize a prosperous
● School visits, guest teachers
society for the future by not only
● Materials for children
conveying the enjoyment and importance
of monozukuri to children and students
but also by developing future
generations of human resources.
“The Secrets of the Bearings”
(comic book)
“Stories of the Bearings”
(picture book) (Japanese)
“Introduction to the Bearings”
(technology introduction)
(Japanese)
NSK Scholarship
Foundation to
provide aid in the
invigoration of the
Asian region by
supporting Asian
exchange students
and Japanese
nationals who will
play an active role
on the international
stage and contribute
to the world
NSK REPORT 2019
35
Sustainable Growth Strategies
Creating Value with Stakeholders
NSK’s business is founded on a trust relationship with all of our stakeholders, and we deeply feel the importance
of building even more fruitful relationships through two-way communication.
Together with each of our stakeholders we aim to generate a range of value, ultimately contributing to the
realization of a sustainable society while also achieving growth as a company.
NSK’s customers and sales destinations
encompass the machine manufacturers, auto
● Everyday sales activities
● Technological exchanges
and automotive components makers, distributors
● Guest engineers
and sales outlets that purchase our products
directly, as well as the end users who utilize our
● Showrooms
● Exhibitions
● Q: Quality-Offering of
high-quality products,
high-quality services
●Creating and
proposing new
value from an
● C: Cost-Appropriate pricing
● D: Delivery-Stability in delivery,
end-user
perspective
products in the various machines produced by
● Joint research/joint
supply chain management,
●Proposals for
direct customers. Being recognized for our
development
experience and track record in QCDDSM, sales
● Information disclosure
and strict adherence to
laws and regulations
strength, brand recognition, global development
through surveys, etc.
● D: Development-Leveraging
supply from
optimal locations
that leverage
global
production sites
capabilities, and reliability as a partner is what
● NSK report
leads to seizing new business and capturing
market share, and this is what enables
（Integrated report）
● Sustainability report
sustainable growth. In addition to deepening our
● Website
understanding of the needs of manufacturers,
distributors and sales outlets through everyday
sales activities and technological exchanges, we
also strive to address the expectations of end
users. By effectively incorporating direct
customer and end-user perspectives into our
business activities, products and services, NSK
aims to create values as a part of efforts to
realize an affluent society, promote
environmental conservation and establish an
advanced technological society.
technology innovation,
finding solutions to issues,
development of partners
and development of
products and technologies
that contribute to the
environment
● S: Service-Support customers
at our global sites in each
region, reliability, security
and trouble shooting
● M: Management-Management
capabilities that support the
above
The value created by NSK, including advanced
● Manager/team dialogue
technology and world class products, is
driven by a diverse team of employees
working all over the world. We strive to
● Objective-based
review systems
develop vibrant, motivating workplaces to fully
● Internal financial results
enable each employee’s potential. In addition
briefings
to fostering creativity and individuality, NSK is
● Intranet, internal
● Engaging workplaces
(Respect of fundamental
opportunity, creating safe
and inspiring workplaces,
health and productivity
management)
management, performance
rights at work, equal
working to revitalize a constructive
labor-management dialogue, employee
communications, and exchanges with
external stakeholders. Through these efforts,
Aspirations Survey
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
● Employee awareness
increase corporate value.
seminars
surveys
newsletters, digital signage
● Leveraging a diverse
● Internal job posting,
Workplace and Career
● Vision 2026 initiatives
workforce, diversity and
inclusion, work-life balance,
flexibility with working styles
● Providing opportunities for
● Training, self-improvement
growth, self-development
and educational
opportunities
● Labor union negotiations
● QC cycle/cell activities
● Improvement proposal
● Internal whistleblowing
systems
system
●Increase
opportunities for
dialogue with
management,
vitalize two-way
communication
●Review systems to
achieve more
diverse work
styles
●Promote
situational
understanding
and improvement
activities through
regular
awareness
surveys
●Further enhance
educational and
training programs
NSK’s businesses, which reach all corners of
● Daily procurement activities
● Proper, fair and transparent
●Ongoing
the globe, as well as the competitiveness they
● Procurement Policy
transactions that give
maintenance
possess, are underpinned by numerous
suppliers around the world through the
Briefings
● NSK Supplier CSR
consideration to society and
and
the environment
provision of superior components and raw
Guidelines “self-diagnosis
● Joint development
materials. Suppliers ask for close
collaboration in quality assurance and
technology development and require fair
transaction practices.
sheet”
● Conflict minerals surveys
● Green Procurement
Standards
NSK strives to develop mutually beneficial
relationships through frank and open
● Regular meetings on
technology and quality
exchange of opinions in daily procurement
● Supplier Safety
activities and mutual improvement initiatives.
Confirmation System
For example, NSK works with suppliers to
raise the level of quality assurance, develop
new technologies, protect the environment,
and ensure that human rights are fully
● Local supplier
audits/interactions
● VA/VE
● Joint research/joint
respected. These sincere efforts are essential
development
for environmental conservation and mutual
● Whistleblowing system
prosperity along the entire global supply
● NSK report
chain.
● Sustainability report
(materials, components,
grease, etc.)
● Support for enhanced quality
●Enhance level of
● Promoting CSR activities
CSR
throughout the supply chain
● Collaboration when
disasters occur
strengthening of
favorable and
strong
relationships
management
throughout the
supply chain
toward realizing
a sustainable
society
s
r
e
m
o
t
s
u
C
s
e
e
y
o
l
p
m
E
s
r
e
i
l
p
p
u
S
Our Relationship with Stakeholders
Main Engagement
Primary Benefits/Values, Interests,
Examples of Themes for
Channels
and Expectations of Stakeholders
Further Value Creation
Relationships with Stakeholders
Main Engagement
Channels
Primary Benefits/Values, Interests,
and Expectations of Stakeholders
Examples of Themes for
Further Value Creation
s
e
i
t
i
n
u
m
m
o
C
l
a
c
o
L
s
r
o
t
s
e
v
n
I
d
n
a
s
r
e
d
l
o
h
e
r
a
h
S
s
n
o
i
t
a
r
e
n
e
G
e
r
u
t
u
F
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.
As providers of financial capital,
shareholders and investors 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.
Realizing a safe and 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. To support the
healthy development of the next
generation that will be responsible for
shaping future society, 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.
● Activities to contribute to
● Mutual harmony and benefit
●Increasing the
local communities (donation
drives, cleanup activities,
etc.)
● Plant festivals
● Cooperating in community
events, welfare programs
● Information exchange with
administrative bodies, local
public organizations, others
(understand and respond to
demands and expectations)
● Exchange with industry
groups
with communities
● Contributing to creation of
employment/regional
development
● Preserving the global
environment, local
environment
● Reducing environmental
impact (curbing emissions
from business activities)
● Consideration concerning
noise
● Safe operations
● Improved Corporate Value
● Proper stock prices
● Realizing shareholder
returns that exceed capital
costs
● Providing information in a
proper, fair and timely
manner, and have sincere
dialogue
● Proactively taking initiatives
and making disclosures for
global social issues, and
CSR/ESG
opportunities for
exchange so as to
promote an
understanding of
safety and security
and raise the degree
of trust
●Ample activities to
contribute to
communities
●Securing and raising
understanding and
agreement of capital
market participants
with regard to
management policy,
business strategy
and financial strategy
●Expanding support of
shareholders that
contributes to fair
determination of
share prices and
sustainable growth,
and realizing a
balanced
shareholder
composition
●Ample engagement
with shareholders
and investors, and
strengthening the
tools to accomplish
that
●Enhancing disclosure
and heightening
appeal of efforts with
regard to CSR/ESG
issues
● Set date to avoid periods
concentrated with the
shareholders’ meetings of
other companies
＊The 158th Ordinary General
Meeting of Shareholders
- Number of shareholders
present: 154
- Ratio of shareholder voting
rights exercised: 83.9％
● Plant tours for shareholders
● Financial conferences
● President’s small meetings
● Roadshows outside Japan
● Securities firm-sponsored
conferences
● Interviews
● Engagement visits
● Business briefings
＊Total number of dialogue
opportunities in fiscal 2018:
527 companies
● Briefings for individual
investors
＊Total number of individual
investors participating in
fiscal 2018: 314 in 9 briefings
● NSK report
● Sustainability report
● Website
● Joint research
● NSK Foundation for the
Advancement of Mechatronics
● NSK Scholarship Foundation
● Providing products/technical
materials
● Science classes for children
● “Bearing Lab” display booth at
the Science Museum (Tokyo,
Japan)
● Internships
● School visits, guest teachers
● Materials for children
“The Secrets of the Bearings”
(comic book)
“Stories of the Bearings”
(picture book) (Japanese)
“Introduction to the Bearings”
(technology introduction)
(Japanese)
● Generating and providing
●Ongoing
opportunities for the growth
of the next generation that
will be responsible for the
future
● Conveying the enjoyment and
importance of monozukuri
● Passing down a safe society
and an abundant natural
environment
implementation of
support to nurture
the next generation
of human talent
from a long-term
standpoint
●Working through the
NSK Scholarship
Foundation to
provide aid in the
invigoration of the
Asian region by
supporting Asian
exchange students
and Japanese
nationals who will
play an active role
on the international
stage and contribute
to the world
34
NSK REPORT 2019
NSK REPORT 2019
35
Sustainable Growth Strategies
Risk Management
NSK works to build a risk management system based on clearly
stipulated fundamental principles aimed at effectively enabling global
Group management and internal control functions. Every year, all of
the business sites perform their own risk assessment, classifying,
analyzing and evaluating risks in accordance with changes in the
social environment, the frequency of risk occurrence, the size of
impact, and other factors to identify risks that should be addressed.
The Corporate Planning Division Headquarters and the Finance
Division Headquarters coordinate with business, regional and
functional headquarters with regard to risks at each division and each
business site, which are managed in accordance with prescribed
reporting systems. While putting in place preventive measures, the
Company devises steps to swiftly and appropriately take action in the
● Risk Management Flow
unfortunate event a risk should actually be manifested, and then
works to mitigate impact.
In addition, the internal audit division coordinates with the Audit
Committee to monitor the tasks carried out by executive divisions,
build an internal control system and audit operational status.
As NSK’s business activities spread to more areas, the range of
anticipated risks also widens. However, the Company has identified 10
types of representative risks deemed of high importance according to
what they entail and likelihood of occurring, their degree of impact
and mitigation measures. Among the risks we present, the three
types outlined in 1, 2, and 6 could lead to business opportunities for
NSK, and we include details concerning these as well.
Risk classification
Sorting, classifying
Risk response
Avoid, mitigate,
divert, acceptance
measures
Risk analysis
Analysis of likelihood
of occurrence,
frequency, impact
Risk evaluation
● Risk Management System
Evaluation of likelihood of occurrence, frequency, impact
Pursuit of underlying cause
(Execution)
CEO/CFO
(Internal audits)
CEO
Risk reporting
Risk response instructions
Reporting
Instruction
(Corporate risk management divisions)
Corporate Planning Division Headquarters
Finance Division Headquarters
Risk reporting
(Regular, immediately as required)
Avoid,
mitigation measures
Business, regional,
and functional division headquarters
● Risk Heat Map
g
n
i
r
o
t
i
n
o
m
k
s
i
R
Internal audit
Internal control evaluation as
related to financial reporting
Short-term risk: 1-2 years
Long-term risk: 10 years
High
t
c
a
p
m
I
9
2
5
1
6
3
4
8
10
7
High
t
c
a
p
m
I
5
6
9
2
1
3
4
8
7
10
Low
Likelihood of occurrence
High
Low
Likelihood of occurrence
High
● Representative Risks and Mitigation Measures
Risk Types
Details of Representative Risks
Risk Mitigation Measures
● Risk of delay in responding to market changes, as well as to
● Understand the needs through close relationships with
customers’ technology demands and technological innovation as
a broad range of customers
1
Risk associated with
changes to technology
innovation, and the market
or competitive landscape
with CASE and IoT
● Risk of being unable to respond to an increasingly competitive
market populated by rival companies and new market entrants
Opportunity
Generation and expansion of new businesses brought
about by the introduction of new products and new technology
(industrial machinery actuator, CMS, ball screws for automatic brakes,
EV speed reduction mechanisms, steer-by-wire, others)
PP. 26-31
● Pursue the Four Core Technologies plus One, and
utilization of digital technology
● Leverage open innovation and alliances
Risk related to local
situations and dependency
on specific region
2
Risk concerning safety,
and prevention of fire and
disaster
● Risk of change in economic environment of a specific region in
● Expand and enhance a balanced presence in other
which the Company conducts business, and of the impact of falling
regions
into political instability
● Get an early grasp of information on dangers by
● Risk associated with halt in operations on account of deteriorating
strengthening ability to gather information from each
public order, outbreak of riots or terrorism
region
● Risk associated with business continuity in the event the supply
● Leverage our global network that has the principle of
chain breaks down
● Risk of overemphasis on Asia, particularly China
Opportunity
Business expansion in important regions other than
China, such as ASEAN, Europe, others
PP. 44-45
local production, local procurement
● Obtain advice from the China Advisory Board
● Risk of major industrial accident occurring
● Risk of halt in operations due to lack of labor management
● Risk of halt in operations due to mistaken BCP measures to
● Strengthen and nurture safety awareness as a core value,
thoroughly educate and enlighten
● Share case studies from other locations introducing what went
address fires or natural disasters
right, and what went wrong
● Risk of being unable to secure a comfortable and safe working
environment in neighboring regions, or for employees
● Audit and evaluation of various levels from management to
operation staff as well as processes and systems, thorough
implementation of countermeasures
● Conduct simulations of anticipated scenarios, prepare disaster
countermeasures, formulate a business continuity plan
● Risk of compensation claims due to significant quality
● Secure high quality through process management that leverages
defects
the NSK Product Development System (NPDS)
Risk associated with quality
● Risk associated with insufficient response due to improper
● Realize zero defects by utilizing NSK Quality No. 1 (NQ1) activities
quality assurance system or quality control management
● Conduct auditing, monitoring based in the internal control
● Risk of spoofed, falsified quality data
system, strengthen support systems
Risk with regard to
compliance
● Risk of violation of relevant laws and regulations
● Risk of further losing the trust of society due to bearing
responsibility for criminal, civil and administrative acts
associated with the above
● Undertake education on strict adherence to laws and
regulations, create a corporate culture and atmosphere
interwoven with morals and manners
● Review compliance systems, policies, and related rules
on an as needed basis to strengthen and improve
● Promote specific measures related to strengthening
compliance, follow up to confirm on status of implementation
3
4
5
6
Risk concerning the
environment
Risk associated with
human resources and
7
labor
● Risk of not progressing toward attaining reduction in CO2
emissions (60% reduction in emissions in 2050) and other
● The Environmental Protection Committee formulates
environmental policy and environmental action plans
specific goals related to the environment
● Risk of being unable to respond to changes in
environment-related laws and systems, or to evolving
environment-related technologies and market needs
● Determine and implement specific response measures, and
understand information in order to conform to
environment-related laws and systems
● Acquire external certifications in the development, design,
Opportunity
Expand sales of environmentally friendly products
production and distribution divisions that pay careful attention
P. 47
to environment-related issues, and manage thoroughly
according to reviews by third-party institutions
● Risk of being unable to secure globally competent human
resources, consequently hindering business expansion and
execution of strategy
● Risk of impact on operations due to insufficient workforce
● Risk of impact on operations due to deteriorating labor
relations
● Make the most of diverse human resources (Realization Of
Diversity and Inclusion, Facilitating a work-life balance), Create
environments where employees can work with vitality (Respect
of fundamental Rights, Creating secure, safe, and comfortable
workplaces, Consideration to health). Engrain a basic policy of
providing opportunities and workplaces that foster the growth
of self-motivated employees (Realization of talent
management, offer education and training opportunities)
● Undertake measures to bolster engagement and systems, including
support for females, elderly and handicapped to play an active role,
conduct employee awareness surveys and Employee Relations (ER)
8
Risk with regard to
procurement
production capacity
components
● Risk of dependency on specific source of supply or
occurrence of quality problems that could hinder the supply
of raw materials or components due to partners’ insufficient
● Build a firm understanding of the Company’s basic policy through
procurement policy briefings, NSK Supplier CSR Guidelines,
procurement standards, use of whistleblowing system and other
● Risk of impact from rising costs for raw materials or
● Cultivate and educate new suppliers based on high and increasingly
measures
sophisticated assessed purchasing capabilities
● Risk of supply-related problems occurring with regard to
● Implement supplier BCP inspections, as well as audits of suppliers in
new technology or new products
terms of quality, environment, and CSR, strengthen and enhance
● Risk of not proceeding with initiatives related to CSR procurement
support structure to facilitate improvements
Risk associated with
sophistication of IT systems
technology and field trial deployment
● Risk of decline in competitiveness due to lagging
● Maintain and raise technology level by pursuing new IT system
9
information and
communication
technology (ICT)
10
Risk related to finance
● Risk of decline in business efficiency due to loss of stability
● Ensure stability through backup and redundancy of IT system
in IT system that underpins business operations
● Risk of halt in operations or loss of trust from society on
account of insufficient measures or lack of IT security to
defend against cyber-attacks and other external threats
platform, and standardize system support
● Build and strengthen a management structure relevant to cyber
security risks and educate and enhance knowledge internally with
regard to information security, acquire external certifications
● Risk relating to the collection of accounts receivable due to
● Gain an early understanding through the risk reporting
sales destination trust problems
system, conduct swift reaction to address through close
● Risk of cost burden from problems that arise related to
collaboration with relevant divisions
quality, litigation concerning business activities
● Risk of procurement of necessary funds, cash flow
● Risk related to mistakes in accounting procedures
● Perform Group management and strengthen
effectiveness based on the internal control system
36
NSK REPORT 2019
NSK REPORT 2019
37
PP. 44-45
Business expansion in important regions other than
Opportunity
China, such as ASEAN, Europe, others
● Representative Risks and Mitigation Measures
Risk Types
Details of Representative Risks
Risk Mitigation Measures
● Risk of delay in responding to market changes, as well as to
● Understand the needs through close relationships with
1
Risk associated with
changes to technology
innovation, and the market
or competitive landscape
customers’ technology demands and technological innovation as
with CASE and IoT
● Risk of being unable to respond to an increasingly competitive
market populated by rival companies and new market entrants
Generation and expansion of new businesses brought
Opportunity
about by the introduction of new products and new technology
(industrial machinery actuator, CMS, ball screws for automatic brakes,
EV speed reduction mechanisms, steer-by-wire, others)
PP. 26-31
a broad range of customers
● Pursue the Four Core Technologies plus One, and
utilization of digital technology
● Leverage open innovation and alliances
Risk related to local
situations and dependency
on specific region
2
● Risk of change in economic environment of a specific region in
● Expand and enhance a balanced presence in other
which the Company conducts business, and of the impact of falling
into political instability
● Risk associated with halt in operations on account of deteriorating
public order, outbreak of riots or terrorism
● Risk associated with business continuity in the event the supply
chain breaks down
● Risk of overemphasis on Asia, particularly China
regions
● Get an early grasp of information on dangers by
strengthening ability to gather information from each
region
● Leverage our global network that has the principle of
local production, local procurement
● Obtain advice from the China Advisory Board
Sustainable Growth Strategies
Risk Management
NSK works to build a risk management system based on clearly
unfortunate event a risk should actually be manifested, and then
stipulated fundamental principles aimed at effectively enabling global
works to mitigate impact.
Group management and internal control functions. Every year, all of
In addition, the internal audit division coordinates with the Audit
the business sites perform their own risk assessment, classifying,
Committee to monitor the tasks carried out by executive divisions,
analyzing and evaluating risks in accordance with changes in the
social environment, the frequency of risk occurrence, the size of
build an internal control system and audit operational status.
As NSK’s business activities spread to more areas, the range of
impact, and other factors to identify risks that should be addressed.
anticipated risks also widens. However, the Company has identified 10
The Corporate Planning Division Headquarters and the Finance
Division Headquarters coordinate with business, regional and
types of representative risks deemed of high importance according to
what they entail and likelihood of occurring, their degree of impact
functional headquarters with regard to risks at each division and each
and mitigation measures. Among the risks we present, the three
business site, which are managed in accordance with prescribed
types outlined in 1, 2, and 6 could lead to business opportunities for
reporting systems. While putting in place preventive measures, the
NSK, and we include details concerning these as well.
Company devises steps to swiftly and appropriately take action in the
● Risk Management Flow
Risk classification
Sorting, classifying
Risk response
Avoid, mitigate,
divert, acceptance
measures
Risk analysis
Analysis of likelihood
of occurrence,
frequency, impact
Risk evaluation
Evaluation of likelihood of occurrence, frequency, impact
Pursuit of underlying cause
● Risk Management System
(Execution)
CEO/CFO
(Internal audits)
CEO
Risk reporting
Risk response instructions
Reporting
Instruction
(Corporate risk management divisions)
Corporate Planning Division Headquarters
Finance Division Headquarters
Risk reporting
(Regular, immediately as required)
Avoid,
mitigation measures
Business, regional,
and functional division headquarters
g
n
i
r
o
t
i
n
o
m
k
s
i
R
Internal audit
Internal control evaluation as
related to financial reporting
Short-term risk: 1-2 years
Long-term risk: 10 years
● Risk Heat Map
High
t
c
a
p
m
I
9
2
5
1
6
3
4
8
10
7
5
6
9
2
1
High
t
c
a
p
m
I
3
4
8
7
10
Risk concerning safety,
and prevention of fire and
disaster
● Risk of major industrial accident occurring
● Risk of halt in operations due to lack of labor management
● Risk of halt in operations due to mistaken BCP measures to
● Strengthen and nurture safety awareness as a core value,
thoroughly educate and enlighten
● Share case studies from other locations introducing what went
address fires or natural disasters
● Risk of being unable to secure a comfortable and safe working
environment in neighboring regions, or for employees
right, and what went wrong
● Audit and evaluation of various levels from management to
operation staff as well as processes and systems, thorough
implementation of countermeasures
● Conduct simulations of anticipated scenarios, prepare disaster
countermeasures, formulate a business continuity plan
● Risk of compensation claims due to significant quality
● Secure high quality through process management that leverages
defects
the NSK Product Development System (NPDS)
Risk associated with quality
● Risk associated with insufficient response due to improper
quality assurance system or quality control management
● Realize zero defects by utilizing NSK Quality No. 1 (NQ1) activities
● Conduct auditing, monitoring based in the internal control
● Risk of spoofed, falsified quality data
system, strengthen support systems
3
4
5
Risk with regard to
compliance
● Risk of violation of relevant laws and regulations
● Risk of further losing the trust of society due to bearing
responsibility for criminal, civil and administrative acts
associated with the above
6
Risk concerning the
environment
● Risk of not progressing toward attaining reduction in CO2
emissions (60% reduction in emissions in 2050) and other
specific goals related to the environment
● Risk of being unable to respond to changes in
environment-related laws and systems, or to evolving
environment-related technologies and market needs
Opportunity
Expand sales of environmentally friendly products
P. 47
● Undertake education on strict adherence to laws and
regulations, create a corporate culture and atmosphere
interwoven with morals and manners
● Review compliance systems, policies, and related rules
on an as needed basis to strengthen and improve
● Promote specific measures related to strengthening
compliance, follow up to confirm on status of implementation
● The Environmental Protection Committee formulates
environmental policy and environmental action plans
● Determine and implement specific response measures, and
understand information in order to conform to
environment-related laws and systems
● Acquire external certifications in the development, design,
production and distribution divisions that pay careful attention
to environment-related issues, and manage thoroughly
according to reviews by third-party institutions
● Risk of being unable to secure globally competent human
● Make the most of diverse human resources (Realization Of
7
Risk associated with
human resources and
labor
resources, consequently hindering business expansion and
execution of strategy
● Risk of impact on operations due to insufficient workforce
● Risk of impact on operations due to deteriorating labor
relations
Diversity and Inclusion, Facilitating a work-life balance), Create
environments where employees can work with vitality (Respect
of fundamental Rights, Creating secure, safe, and comfortable
workplaces, Consideration to health). Engrain a basic policy of
providing opportunities and workplaces that foster the growth
of self-motivated employees (Realization of talent
management, offer education and training opportunities)
● Undertake measures to bolster engagement and systems, including
support for females, elderly and handicapped to play an active role,
conduct employee awareness surveys and Employee Relations (ER)
8
Risk with regard to
procurement
Risk associated with
information and
communication
technology (ICT)
9
10
Risk related to finance
● Risk of dependency on specific source of supply or
occurrence of quality problems that could hinder the supply
of raw materials or components due to partners’ insufficient
production capacity
● Build a firm understanding of the Company’s basic policy through
procurement policy briefings, NSK Supplier CSR Guidelines,
procurement standards, use of whistleblowing system and other
measures
● Risk of impact from rising costs for raw materials or
● Cultivate and educate new suppliers based on high and increasingly
components
sophisticated assessed purchasing capabilities
● Risk of supply-related problems occurring with regard to
● Implement supplier BCP inspections, as well as audits of suppliers in
new technology or new products
● Risk of not proceeding with initiatives related to CSR procurement
terms of quality, environment, and CSR, strengthen and enhance
support structure to facilitate improvements
● Risk of decline in competitiveness due to lagging
● Maintain and raise technology level by pursuing new IT system
sophistication of IT systems
technology and field trial deployment
● Risk of decline in business efficiency due to loss of stability
● Ensure stability through backup and redundancy of IT system
in IT system that underpins business operations
● Risk of halt in operations or loss of trust from society on
account of insufficient measures or lack of IT security to
defend against cyber-attacks and other external threats
platform, and standardize system support
● Build and strengthen a management structure relevant to cyber
security risks and educate and enhance knowledge internally with
regard to information security, acquire external certifications
● Risk relating to the collection of accounts receivable due to
sales destination trust problems
● Risk of cost burden from problems that arise related to
quality, litigation concerning business activities
● Risk of procurement of necessary funds, cash flow
● Risk related to mistakes in accounting procedures
● Gain an early understanding through the risk reporting
system, conduct swift reaction to address through close
collaboration with relevant divisions
● Perform Group management and strengthen
effectiveness based on the internal control system
Low
Likelihood of occurrence
High
Low
Likelihood of occurrence
High
36
NSK REPORT 2019
NSK REPORT 2019
37
Activity Report (Actual and Forecast)
Business Activities Report
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 mecha-
tronic products such as XY Tables and MEGATORQUE MOTORTM that
employ ultra-high precision positioning and controlling technolo-
gies. 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 the 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 plus One
● 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
Industrial Machinery Bearings
Precision Machinery and Parts
Sales Breakdown by Region (Year ended March 31, 2019)
Aftermarket
(Maintenance)
39%
Sales
¥210.3 billion
(Year ended
March 31, 2019)
General Machinery
OEM 42%
Other
40%
Sales
¥59.7 billion
(Year ended
March 31, 2019)
Machine Tools
and Injection
Molding Machines
35%
Other Asia 14%
China
22%
Japan
33%
Electrical and IT Equipment 19%
Semiconductor and
LCD Production Equipment 25%
Europe 17%
The Americas 14%
38
NSK REPORT 2019
NSK REPORT 2019
39
A Look Back at the Business Conditions for the Year ended March 31, 2019, and the Forecast for the Year ending March 31, 2020
A positive first half for the year ended March 31, 2019 contributed to increasing in both sales and profits.
In the year ending March 31, 2020, demand is expected to bottom out during the first half and recovers
during the second half.
Sales
(¥ Billions)
300
200
100
0
■ Industrial Machinery Bearings
■ Precision Machinery and Parts
Operating Income/Operating Income Margin
■ Operating Income (left)
- Operating Income Margin (right)
(¥ Billions)
243.4
41.7
226.9
42.7
266.2
270.0
265.0
57.4
59.7
55.0
201.7
184.3
208.9
210.3
210.0
12.2
32.9
10.9
29.0
10.6
28.3
8.3
20.2
6.5
14.7
(％)
15
12
9
6
3
0
60
50
40
30
20
10
0
16/3
17/3
18/3
19/3
20/3 (Forecast)
16/3
17/3
18/3
19/3
20/3 (Forecast)
The year ended March 31, 2019 saw strong demand for the
despite the negative impact of a slowdown in the
Company’s products continued through the first half of this period
smartphone-related market. In the Americas, despite strong
in response to increased capital expenditures in IoT, automation
demand from sectors including medical equipment, sales
and labor-saving measures. The second half of this period saw
demand transition to a period of adjustment with the
declined due to depreciation of emerging countries’ currencies,
including the Brazilian real. Sales in Europe decreased due to a
manifestation of impacts from the US-China trade dispute. For
decline in the electrical sector, including home appliances,
the full period, however, a positive first half contributed to
securing higher sales and profits year on year. In addition to
although sales in the wind power sector rose. In China, sales
grew due to an increase in the aftermarket, wind power and
higher sales, the results of cost reductions and pricing policies
machine tool sectors, despite weaker sales in the electrical
helped lead the operating income margin to recover to the 12%
sector, including electric tools and motors. In other Asian
level.
countries sales increased, primarily in India.
Looking at the segment’s results by geographic breakdown,
As a result, sales in the Industrial Machinery Business
sales in Japan increased, primarily in the aftermarket sector,
totaled ¥269,974 million (a year-on-year increase of 1.4%),
operating income totaled ¥32,887 million (a year-on-year increase
of 16.1%) and the operating income margin reached 12.2%.
The business environment for the upcoming period also
holds risks for a global economic slowdown, including US-China
trade friction and the UK’s withdrawal from the European Union.
As such, the future outlook remains unclear. However, capital
expenditures delayed during this period are expected to recover
from the second half of the upcoming period, with sales for the
year ending March 31, 2020 anticipated to total ¥265,000 million (a
year-on-year decrease of 1.8%), operating income to total ¥29,000
million (a year-on-year decrease of 11.8%) and the operating
income margin to reach 10.9%.
In this business, the Company will continue to flexibly
address changes in demand trends. Moreover, as social needs for
IoT, robotics and renewable energy increase, the Company is
working to expand its mid- to long-term presence in the market
and expand businesses that add to sales by building a new
business foundation that addresses these growth areas.
Activity Report (Actual and Forecast)
Business Activities Report
Industrial Machinery Business
Business Overview
The Industrial Machinery Business is involved in operations related
such as vacuum cleaners and washing machines.
to two product categories, namely industrial machinery bearings
Meanwhile, the precision machinery and parts business
and precision machinery and parts. The industrial machinery
bearings business comprises three subsegments: general
supplies linear motion parts including ball screws and NSK Linear
GuidesTM that play an important role in linear motion and mecha-
machinery, which manufactures bearings for applications in a wide
tronic products such as XY Tables and MEGATORQUE MOTORTM that
range of industries such as machine tools, steel plant facilities,
employ ultra-high precision positioning and controlling technolo-
railcars, construction machinery, chemical plants, industrial pumps
gies. In this way, the Company supports a wide range of fields,
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
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
ultra-small motors to bearings with an outer diameter of more than
well as sophisticated solutions based on CMS (Condition Monitoring
2 m that are utilized in wind turbines. The typical household
System) for greater machinery and equipment reliability and for
contains around 100 bearings, which are used in general appliances
preventive maintenance.
Specific Features of the 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 plus One
● 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
A Look Back at the Business Conditions for the Year ended March 31, 2019, and the Forecast for the Year ending March 31, 2020
A positive first half for the year ended March 31, 2019 contributed to increasing in both sales and profits.
In the year ending March 31, 2020, demand is expected to bottom out during the first half and recovers
during the second half.
Sales
(¥ Billions)
300
200
100
0
■ Industrial Machinery Bearings
■ Precision Machinery and Parts
Operating Income/Operating Income Margin
(¥ Billions)
■ Operating Income (left)
- Operating Income Margin (right)
(％)
15
243.4
41.7
226.9
42.7
266.2
270.0
265.0
57.4
59.7
55.0
201.7
184.3
208.9
210.3
210.0
16/3
17/3
18/3
19/3
20/3 (Forecast)
60
50
40
30
20
10
0
12.2
32.9
10.6
28.3
8.3
20.2
6.5
14.7
10.9
12
29.0
9
6
3
0
16/3
17/3
18/3
19/3
20/3 (Forecast)
The year ended March 31, 2019 saw strong demand for the
Company’s products continued through the first half of this period
in response to increased capital expenditures in IoT, automation
and labor-saving measures. The second half of this period saw
demand transition to a period of adjustment with the
manifestation of impacts from the US-China trade dispute. For
the full period, however, a positive first half contributed to
securing higher sales and profits year on year. In addition to
higher sales, the results of cost reductions and pricing policies
helped lead the operating income margin to recover to the 12%
level.
Looking at the segment’s results by geographic breakdown,
sales in Japan increased, primarily in the aftermarket sector,
Industrial Machinery Bearings
Precision Machinery and Parts
Sales Breakdown by Region (Year ended March 31, 2019)
Aftermarket
(Maintenance)
39%
Sales
¥210.3 billion
(Year ended
March 31, 2019)
General Machinery
OEM 42%
Other
40%
Sales
¥59.7 billion
(Year ended
March 31, 2019)
Machine Tools
and Injection
Molding Machines
35%
Other Asia 14%
China
22%
Japan
33%
Electrical and IT Equipment 19%
Semiconductor and
LCD Production Equipment 25%
Europe 17%
The Americas 14%
despite the negative impact of a slowdown in the
smartphone-related market. In the Americas, despite strong
demand from sectors including medical equipment, sales
declined due to depreciation of emerging countries’ currencies,
including the Brazilian real. Sales in Europe decreased due to a
decline in the electrical sector, including home appliances,
although sales in the wind power sector rose. In China, sales
grew due to an increase in the aftermarket, wind power and
machine tool sectors, despite weaker sales in the electrical
sector, including electric tools and motors. In other Asian
countries sales increased, primarily in India.
As a result, sales in the Industrial Machinery Business
totaled ¥269,974 million (a year-on-year increase of 1.4%),
operating income totaled ¥32,887 million (a year-on-year increase
of 16.1%) and the operating income margin reached 12.2%.
The business environment for the upcoming period also
holds risks for a global economic slowdown, including US-China
trade friction and the UK’s withdrawal from the European Union.
As such, the future outlook remains unclear. However, capital
expenditures delayed during this period are expected to recover
from the second half of the upcoming period, with sales for the
year ending March 31, 2020 anticipated to total ¥265,000 million (a
year-on-year decrease of 1.8%), operating income to total ¥29,000
million (a year-on-year decrease of 11.8%) and the operating
income margin to reach 10.9%.
In this business, the Company will continue to flexibly
address changes in demand trends. Moreover, as social needs for
IoT, robotics and renewable energy increase, the Company is
working to expand its mid- to long-term presence in the market
and expand businesses that add to sales by building a new
business foundation that addresses these growth areas.
38
NSK REPORT 2019
NSK REPORT 2019
39
Activity Report (Actual and Forecast)
Business Activities Report
Automotive Business
Business Overview
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 automo-
biles 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 sophisti-
cated 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) and 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 the 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 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
● Development capabilities/technological response capabilities for advances in automobile functions
● Global management systems to focus on meeting overseas demand
Automotive Bearings
Automotive Components
Sales Breakdown by Region (Year ended March 31, 2019)
Other
51%
Sales
¥348.9 billion
(Year ended
March 31, 2019)
Hub Unit Bearings
29%
Automatic
Transmission
Components
24%
Sales
¥340.8 billion
(Year ended
March 31, 2019)
Other Asia 15%
China
19%
Japan
37%
Needle Roller Bearings
20%
Steering Products 76%
Europe 12%
The Americas 17%
40
NSK REPORT 2019
NSK REPORT 2019
41
Sales
(¥ Billions)
800
600
400
200
0
A Look Back at the Business Conditions for the Year ended March 31, 2019, and the Forecast for the Year ending March 31, 2020
A market slowdown and decline in EPS led to lower sales and profits year on year during the year ended March 31, 2019.
In the year ending March 31, 2020, despite a continued slowdown in EPS, NSK aims to achieve growth in bearings and
products for the AT that surpasses the markets growth.
■ Automotive Bearings
■ Automotive Components
Operating Income/Operating Income Margin
■ Operating Income (left)
Operating Income Margin (right)
705.5
696.3
723.6
689.7
650.0
374.8
368.3
372.6
340.8
297.5
(¥ Billions)
10.0
100
9.3
9.1
70.8
64.6
66.0
80
60
40
20
0
6.5
44.9
5.1
33.0
(％)
10
8
6
4
2
0
330.7
328.0
350.9
348.9
352.5
16/3
17/3
18/3
19/3
20/3(Forecast)
16/3
17/3
18/3
19/3
20/3(Forecast)
The year ended March 31, 2019 saw higher sales of products for
due to a reactionary decline from special tax incentives for
automatic transmission (AT) systems and needle roller
compact cars which ended last year, as well as lower EPS
bearings. On the other hand, sales declined year-on-year as a
sales. In other Asian countries, overall sales decreased due to
result of a slowdown in the global automotive market and lower
the impact of exchange rate fluctuations, although sales in India
electric power steering (EPS) sales due to the impact of model
increased.
changes.
Looking at the segment’s results by geographic
As a result, sales in the Automotive Business declined to
¥689,658 million (a year-on-year decrease of 4.7%). Meanwhile,
breakdown, sales in Japan decreased due to lower sales in the
operating income slipped to ¥44,949 million (a year-on-year
EPS business despite robust sales of products for AT systems.
decrease of 31.9%) and the operating income margin fell to
In the Americas, sales increased mainly due to solid sales of
6.5% as a result of lower volume, higher steel prices and labor
products for AT systems. In Europe, sales decreased due to
costs, and increased technological development expenses
lower vehicle production stemming from new exhaust gas
emission testing methods (WLTP). Sales in China decreased
targeted at future growth.
Automotive Business demand trends for the year ending
March 31, 2020 are expected to remain unclear due to ongoing
uncertainty regarding a conclusion to US-China trade friction
and the UK’s withdrawal from the European Union. Moreover,
although NSK aims to achieve growth in products for AT
systems and bearings that surpasses that of the market, given
the continued decline in EPS sales due to the impact of model
changes, sales are expected to fall to ¥650,000 million
(year-on-year decrease of 5.8%), operating income to ¥33,000
million (year-on-year decrease of 26.6%), and the operating
income margin to 5.1%.
In this business, the Company will work to expand
operations with a focus on products for AT systems, for which
demand is expected to continue increasing, and aims to restart
growth in the EPS business. Moreover, NSK will contribute to
electrification, autonomous driving, and other
automobile-related technical innovations by employing existing
technologies and new technologies to be developed in the
future. NSK will also work to improve profitability by raising
productivity and reducing fixed costs.
A Look Back at the Business Conditions for the Year ended March 31, 2019, and the Forecast for the Year ending March 31, 2020
A market slowdown and decline in EPS led to lower sales and profits year on year during the year ended March 31, 2019.
In the year ending March 31, 2020, despite a continued slowdown in EPS, NSK aims to achieve growth in bearings and
products for the AT that surpasses the markets growth.
■ Automotive Bearings
■ Automotive Components
Operating Income/Operating Income Margin
■ Operating Income (left)
Operating Income Margin (right)
Activity Report (Actual and Forecast)
Business Activities Report
Automotive Business
Business Overview
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 automo-
biles have evolved, automotive bearings have come to demand a
wide range of core functional components, including electric power
steering (EPS) and 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
greater level of performance, including less friction loss, smaller size,
demand against the backdrop of improved safety.
lighter weight, higher speed and less noise. Through more sophisti-
cated automotive bearings, including bearing grease and seals that
leverage its core technologies of tribology, materials and numerical
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
simulation, NSK continues to develop products that contribute to the
accelerating. By building on the elemental technologies the Company
evolution of 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 the 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 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
● Global supply capabilities
● Diverse business relationships/customer base among automakers and first-tier auto parts makers
● Development capabilities/technological response capabilities for advances in automobile functions
● Global management systems to focus on meeting overseas demand
Hub Unit Bearings
29%
Automatic
Transmission
Components
24%
Other
51%
Sales
¥348.9 billion
(Year ended
March 31, 2019)
Sales
¥340.8 billion
(Year ended
March 31, 2019)
Needle Roller Bearings
20%
The year ended March 31, 2019 saw higher sales of products for
automatic transmission (AT) systems and needle roller
bearings. On the other hand, sales declined year-on-year as a
result of a slowdown in the global automotive market and lower
electric power steering (EPS) sales due to the impact of model
changes.
Looking at the segment’s results by geographic
breakdown, sales in Japan decreased due to lower sales in the
EPS business despite robust sales of products for AT systems.
In the Americas, sales increased mainly due to solid sales of
products for AT systems. In Europe, sales decreased due to
lower vehicle production stemming from new exhaust gas
emission testing methods (WLTP). Sales in China decreased
Automotive Bearings
Automotive Components
Sales Breakdown by Region (Year ended March 31, 2019)
Other Asia 15%
China
19%
Japan
37%
Steering Products 76%
Europe 12%
The Americas 17%
705.5
696.3
723.6
689.7
650.0
374.8
368.3
372.6
340.8
297.5
330.7
328.0
350.9
348.9
352.5
16/3
17/3
18/3
19/3
20/3(Forecast)
Sales
(¥ Billions)
800
600
400
200
0
(¥ Billions)
100
10.0
9.3
9.1
80
60
40
20
0
70.8
64.6
66.0
6.5
44.9
5.1
33.0
16/3
17/3
18/3
19/3
20/3(Forecast)
(％)
10
8
6
4
2
0
due to a reactionary decline from special tax incentives for
compact cars which ended last year, as well as lower EPS
sales. In other Asian countries, overall sales decreased due to
the impact of exchange rate fluctuations, although sales in India
increased.
As a result, sales in the Automotive Business declined to
¥689,658 million (a year-on-year decrease of 4.7%). Meanwhile,
operating income slipped to ¥44,949 million (a year-on-year
decrease of 31.9%) and the operating income margin fell to
6.5% as a result of lower volume, higher steel prices and labor
costs, and increased technological development expenses
targeted at future growth.
Automotive Business demand trends for the year ending
March 31, 2020 are expected to remain unclear due to ongoing
uncertainty regarding a conclusion to US-China trade friction
and the UK’s withdrawal from the European Union. Moreover,
although NSK aims to achieve growth in products for AT
systems and bearings that surpasses that of the market, given
the continued decline in EPS sales due to the impact of model
changes, sales are expected to fall to ¥650,000 million
(year-on-year decrease of 5.8%), operating income to ¥33,000
million (year-on-year decrease of 26.6%), and the operating
income margin to 5.1%.
In this business, the Company will work to expand
operations with a focus on products for AT systems, for which
demand is expected to continue increasing, and aims to restart
growth in the EPS business. Moreover, NSK will contribute to
electrification, autonomous driving, and other
automobile-related technical innovations by employing existing
technologies and new technologies to be developed in the
future. NSK will also work to improve profitability by raising
productivity and reducing fixed costs.
40
NSK REPORT 2019
NSK REPORT 2019
41
Activity Report (Actual and Forecast)
Core Technologies and Taking Up the Challenge of Creating New Value
Establishment of the Needle Development Center
NSK’s Four Core Technologies, and Giving them Shape is Manufacturing Engineering
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.
Then there is manufacturing engineering, another important technology and strength of NSK that gives shape to our Core Technologies.
The technologies and products that have been created based on our Four Core Technologies, with the “plus One” of manufacturing
engineering, 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.
Four Core Technologies + 1
Tribology
Studying, Clarifying and Controlling Friction
Materials
Unrelenting Pursuit of Performance Durability and Reliability
Tribology is the study of friction and wear of contact surfaces in
relative motion, such as rotating parts that endure enormous
forces with a thin oil film.
Severe operating conditions
are mitigated through
lubrication and surface
treatments developed by
NSK, resulting in superior
performance for
applications requiring low
friction, high-speed
rotation, quiet operation, or
enhanced durability.
Friction on the bearing’s ball surface
Materials research and development affects nearly every
aspect of product performance. Through careful selection of
material composition, heat treatment, and ceramic
materials, NSK enables
optimization of application
performance. This may
result from improvements
in function, endurance, or
reliability, or through
advancements in
cost-effectiveness or
production efficiency.
Durability testing machines
Four Core
Technologies
Numerical Simulation
Simulated Recreation in Cyberspace to Predict Performance
In the past, accuracy and reliability in product development
were achieved with experience-based design and longer
testing periods. NSK’s
simulation technology
allows virtual validation to
accelerate design and
production. Extreme
conditions or innovative
designs that defy previous
expectations can also be
evaluated and analyzed.
Simulated example of an automotive component
+1
Manufacturing Engineering
Giving Shape to Four Core Technologies
Mechatronics
Technology Supports People for a Convenient,
Safe and Comfortable Future
Mechatronics integrates machine elements technology with
control technology. By combining bearings, ball screws and
linear guides, together with motors, sensors and computers,
greater mechanical functionality is elicited with computer
control. This technology
applies new functions and
performance to a range of
industrial machinery, such
as for automobiles and
bio-medicine. It also
contributes to greater
reliability, as well as to
convenience and safety in
daily life.
Manipulation system for
bio-medicine
Contributing to the environment and heightening safety and security through our Four Core
Technologies requires something to breathe life into these technologies. In addition, it is essential
to consistently produce with high quality. NSK tackles these issues by applying AI to its equipment,
utilizing IoT, and optimizing its overall production framework while it works to realize the creation
of smart factories that economize on space, save on energy, and reduce manpower requirements.
Cheonan Plant in South Korea
A Fusion of Product Technology and
Manufacturing Engineering to Address New Needs
The business environment that surrounds needle roller bearing products is seeing an ongoing expansion in demand with automatic transmission (AT) systems, while diverse
sources of power, as typified by a shift toward electrification and EVs, are driving higher performance demands for parts that are lighter, more space saving, faster and
quieter. Moreover, customer development periods are becoming shorter, and that requires technologies and structures that can keep pace with such development speed.
To address such changing needs in a timely manner we established the Needle Development Center in 2018, our seventh R&D center in Japan and 16th worldwide.
In the No. 3 Building at our newly constructed Haruna Plant (Gunma, Japan) we have brought together product design, press technology, die development, mass production
method development, prototype processing, as well as evaluation and inspection functions. On that same floor we have developed an environment in which we can move
forward on development through close collaboration between the design and development divisions, together with the manufacturing engineering divisions.
Needle bearing demand expansion for multistep AT
Technical innovation representative
(eight or more speeds)
of the shift to EVs
Further raising needle
Expanding the product range
Timely introduction of new
competitiveness
that addresses new needs
products to the market
New product development structure
“Needle Development Center”
Product design
Advance development technology
● Collaboration with advance
development divisions
● Propose press technology application
products that anticipate needs
Press technology
Evaluation and
inspection
Prototype
processing
Core Technology
Manufacturing Engineering
● Realize further advanced press
technology application products
Plants
Die development
Each product’s technology division
● Collaboration with manufacturing
technologies at each plant
● Bring manufacture of externally
produced parts in-house
● Support for early prototyping
Production method
development
● Steadily taking an early approach
to the needs/seeds of press
technology application products
Fusion of product technology and manufacturing engineering
Aim
Boost new product development capability
Enhance mass manufacturing engineering capabilities
Raise development speed
Develop new production method
Significantly shorten prototype delivery
Product introduction
Low-noise thrust needle roller bearing
This bearing contributes to creating a
more comfortable driving experience
when using the electric motor in EVs
and in plug-in hybrid vehicles (PHVs).
42
NSK REPORT 2019
NSK REPORT 2019
43
NSK’s Four Core Technologies, and Giving them Shape is Manufacturing Engineering
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.
Then there is manufacturing engineering, another important technology and strength of NSK that gives shape to our Core Technologies.
The technologies and products that have been created based on our Four Core Technologies, with the “plus One” of manufacturing
engineering, 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.
Four Core Technologies + 1
Tribology
Materials
Studying, Clarifying and Controlling Friction
Unrelenting Pursuit of Performance Durability and Reliability
Tribology is the study of friction and wear of contact surfaces in
Materials research and development affects nearly every
relative motion, such as rotating parts that endure enormous
aspect of product performance. Through careful selection of
material composition, heat treatment, and ceramic
Friction on the bearing’s ball surface
Durability testing machines
Four Core
Technologies
Numerical Simulation
Mechatronics
Simulated Recreation in Cyberspace to Predict Performance
Technology Supports People for a Convenient,
In the past, accuracy and reliability in product development
Mechatronics integrates machine elements technology with
were achieved with experience-based design and longer
control technology. By combining bearings, ball screws and
linear guides, together with motors, sensors and computers,
greater mechanical functionality is elicited with computer
forces with a thin oil film.
Severe operating conditions
are mitigated through
lubrication and surface
treatments developed by
NSK, resulting in superior
performance for
applications requiring low
friction, high-speed
rotation, quiet operation, or
enhanced durability.
testing periods. NSK’s
simulation technology
allows virtual validation to
accelerate design and
production. Extreme
conditions or innovative
designs that defy previous
expectations can also be
evaluated and analyzed.
materials, NSK enables
optimization of application
performance. This may
result from improvements
in function, endurance, or
reliability, or through
advancements in
cost-effectiveness or
production efficiency.
control. This technology
applies new functions and
performance to a range of
industrial machinery, such
as for automobiles and
bio-medicine. It also
contributes to greater
reliability, as well as to
convenience and safety in
daily life.
Activity Report (Actual and Forecast)
Core Technologies and Taking Up the Challenge of Creating New Value
Establishment of the Needle Development Center
A Fusion of Product Technology and
Manufacturing Engineering to Address New Needs
The business environment that surrounds needle roller bearing products is seeing an ongoing expansion in demand with automatic transmission (AT) systems, while diverse
sources of power, as typified by a shift toward electrification and EVs, are driving higher performance demands for parts that are lighter, more space saving, faster and
quieter. Moreover, customer development periods are becoming shorter, and that requires technologies and structures that can keep pace with such development speed.
To address such changing needs in a timely manner we established the Needle Development Center in 2018, our seventh R&D center in Japan and 16th worldwide.
In the No. 3 Building at our newly constructed Haruna Plant (Gunma, Japan) we have brought together product design, press technology, die development, mass production
method development, prototype processing, as well as evaluation and inspection functions. On that same floor we have developed an environment in which we can move
forward on development through close collaboration between the design and development divisions, together with the manufacturing engineering divisions.
Needle bearing demand expansion for multistep AT
(eight or more speeds)
Technical innovation representative
of the shift to EVs
Further raising needle
competitiveness
Expanding the product range
that addresses new needs
Timely introduction of new
products to the market
Safe and Comfortable Future
Plants
Die development
Advance development technology
● Collaboration with advance
development divisions
● Propose press technology application
products that anticipate needs
Press technology
New product development structure
“Needle Development Center”
Product design
Evaluation and
inspection
Prototype
processing
Production method
development
Core Technology
Manufacturing Engineering
● Realize further advanced press
technology application products
Each product’s technology division
● Steadily taking an early approach
to the needs/seeds of press
technology application products
● Collaboration with manufacturing
technologies at each plant
● Bring manufacture of externally
produced parts in-house
● Support for early prototyping
Fusion of product technology and manufacturing engineering
Aim
Boost new product development capability
Raise development speed
Enhance mass manufacturing engineering capabilities
Develop new production method
Significantly shorten prototype delivery
Simulated example of an automotive component
Manipulation system for
bio-medicine
+1
Manufacturing Engineering
Giving Shape to Four Core Technologies
Contributing to the environment and heightening safety and security through our Four Core
Technologies requires something to breathe life into these technologies. In addition, it is essential
to consistently produce with high quality. NSK tackles these issues by applying AI to its equipment,
utilizing IoT, and optimizing its overall production framework while it works to realize the creation
of smart factories that economize on space, save on energy, and reduce manpower requirements.
Cheonan Plant in South Korea
Product introduction
Low-noise thrust needle roller bearing
This bearing contributes to creating a
more comfortable driving experience
when using the electric motor in EVs
and in plug-in hybrid vehicles (PHVs).
42
NSK REPORT 2019
NSK REPORT 2019
43
Activity Report (Actual and Forecast)
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. In addition, the Company has made contributing to the
development of each country and region the highest priority while emphasizing such issues as job creation and environmental protection. Looking ahead, NSK
will give exhaustive consideration to being a good corporate citizen and will also endeavor 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, 2019, the Company had a total of 208 production, sales
and technology sites in operation in 30 countries and regions under six
regional headquarters.
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)
Other Asia
14%
(Year ended March 31, 2019)
Japan
37%
China
20%
¥ 991.4
billion
Europe
13%
The Americas
16%
Number of Employees Breakdown by Region (consolidated)
Asia
12,377
Japan
11,755
31,484
Europe 4,259
The Americas 3,093
Global Management
Organizations That Support Global Management
Underpinned by the two Industrial Machinery and Automotive
business axes, NSK employs a “matrix”-type organizational
structure supported by regional headquarters that execute
operations in each region and functional headquarters that buoy
business in a cross-sectional manner from a functional
standpoint.
From the business execution standpoint, a regional
headquarters is positioned to oversee a region under each
business headquarters, and each business site is positioned
beneath each regional headquarters. Orders and directions on
business planning and strategy implementation flow from the
business headquarters to regional headquarters and then to
individual sites. On the other hand, each functional headquarters
located at headquarters in Japan supervises and supports
shared Groupwide functions such as human resources, legal
affairs and accounting at sites worldwide from the perspective of
policy and standardization.
Adopting this type of organization is aimed at effectively
1) reducing overlapping operations and costs under a policy of
making shared Groupwide functions consistent and 2) speeding
up business execution responsiveness by entrusting
decision-making to lower-tier organizations based on a broad
framework decided by upper-tier organizations.
Automotive Business
Division Headquarters
Industrial Machinery Business
Division Headquarters
Japan
The
Americas
Europe
China
ASEAN
India
South
Korea
Functional Headquarters
*Individual sites are divided by regions it has a presence in: Japan,
The Americas, Europe, China, ASEAN, India and South Korea.
Global Management Evolution
NSK has worked to localize management with the aim of
building a system able to undertake locally oriented, agile
business management in each region as it expands
Committee (IMC) meeting, where top regional managers
discuss mid-term management plans, business
strategies, and fiscal year business budgets biannually at
operations overseas. Currently, the Company is expanding
the Tokyo headquarters. The IMC goes beyond simply
business under local leadership by placing numerous
local employees in key posts that include regional
managers.
strengthening collaboration across regions and
headquarters to serve as a platform for all regions to
participate in global management. IMC meetings have
With the perspective of fostering global management
been held for around 30 years and the 60th is scheduled
cooperation, NSK has held the International Management
for March 2020.
U.K.
4
U.K.
Poland
4
China
11
Germany
1
India
5
India
China
Japan
South Korea
2
Japan
20
Thailand
2
2
Malaysia
： Headquarters
： Number of Production Sites
0
Singapore
Indonesia
3
U.S.A.
7
U.S.A.
Mexico
2
Functional Headquarters Global Management
Brazil
1
Functional headquarters support the smooth execution of business plans outlined by headquarters across the Group, thus
making coordination of these various functions indispensable. Each functional headquarters builds structures able to
realize robust global coordination in such areas as finance, legal affairs, human resources and ICT, as it holds global
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
（●）
1
1
1
1
Production
Sites
Sales
Sites
Representative
Offices
R&D
Centers
7
2
1
10
4
1
4
9
9
2
1
5
1
1
19
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
（●）
1
1
1
1
4
6
Production
Sites
Sales
Sites
Representative
Offices
R&D
Centers
20
3
2
2
11
2
5
45
64
31
2
2
5
4
18
3
2
2
10
4
1
84
118
1
1
2
4
7
1
1
1
1
11
16
208 locations in 30 countries and regions
(As of March 31, 2019)
meetings on a regular basis.
Functional Headquarters Key Roles
● Formulate strategies on specific functions in line with
business plans outlined by the headquarters
● Propose measures necessary for business operations
across the Group and take an optimal leadership role
for overall Group management
Key Objectives of Global Meetings
● Groupwide policy/strategy discussions, sharing,
● Mutual support to verify the implementation of and
vector coordination
to complete plans
● Increase shared measures in each region, raise
functions by spreading best practices to all regions
● Measures to exchange information on matters of
concern, adjust strategies, and improve speed
● Form mutual (human) networks
Functions
e
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Tech
6
2
0
n 2
Visio
Meeting frequency
1-4 times annually
Meeting locations
Japan (Tokyo headquarters) or each region on a rotating basis
Meeting duration
2-3 days
Represented regions
All regions
Attendee positions
Regional headquarters function managers and responsible officers
Number of attendees
a total of 10-50 persons
1-3 persons from each region + 5-30 from the host country for
44
NSK REPORT 2019
NSK REPORT 2019
45
Activity Report (Actual and Forecast)
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. In addition, the Company has made contributing to the
development of each country and region the highest priority while emphasizing such issues as job creation and environmental protection. Looking ahead, NSK
will give exhaustive consideration to being a good corporate citizen and will also endeavor to further enhance and strengthen its global business foundation.
Global Sites
Background to Globalization
Sales Breakdown by Region (based on Customer Location)
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, 2019, the Company had a total of 208 production, sales
and technology sites in operation in 30 countries and regions under six
regional headquarters.
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.
U.K.
4
U.K.
Poland
4
Germany
1
India
5
India
： Headquarters
0
： Number of Production Sites
Singapore
Indonesia
3
China
11
China
South Korea
2
Japan
20
Japan
Thailand
2
2
Malaysia
6 countries and regions Total
10
19
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
2
1
5
1
1
2
2
1
1
1
1
3
1
1
1
1
11 countries and regions Total
1
15
2
44
NSK REPORT 2019
1
1
2
1
1
1
3
Other Asia
14%
(Year ended March 31, 2019)
Japan
37%
China
20%
¥ 991.4
billion
Europe
13%
The Americas
16%
Number of Employees Breakdown by Region (consolidated)
Asia
12,377
Japan
11,755
31,484
Europe
4,259
The Americas
3,093
U.S.A.
7
U.S.A.
Mexico
2
Japan
Singapore
Indonesia
Thailand
Malaysia
China
Taiwan
South Korea
Philippines
Vietnam
India
Australia
New Zealand
13 countries and regions Total
Global
Total
11
18
Sites
20
3
2
2
2
5
45
64
31
2
2
5
4
3
2
2
10
4
1
84
118
1
1
1
1
4
6
Brazil
1
1
1
2
4
7
1
1
1
1
11
16
208 locations in 30 countries and regions
(As of March 31, 2019)
Headquarters
Production
Sites
Sales
Sites
Representative
R&D
Offices
Centers
Asia/Oceania
（●）
Headquarters
Production
Sales
Sites
Representative
Offices
R&D
Centers
Global Management
Organizations That Support Global Management
Underpinned by the two Industrial Machinery and Automotive
business axes, NSK employs a “matrix”-type organizational
structure supported by regional headquarters that execute
operations in each region and functional headquarters that buoy
business in a cross-sectional manner from a functional
standpoint.
From the business execution standpoint, a regional
headquarters is positioned to oversee a region under each
business headquarters, and each business site is positioned
beneath each regional headquarters. Orders and directions on
business planning and strategy implementation flow from the
business headquarters to regional headquarters and then to
individual sites. On the other hand, each functional headquarters
located at headquarters in Japan supervises and supports
shared Groupwide functions such as human resources, legal
affairs and accounting at sites worldwide from the perspective of
policy and standardization.
Adopting this type of organization is aimed at effectively
1) reducing overlapping operations and costs under a policy of
making shared Groupwide functions consistent and 2) speeding
up business execution responsiveness by entrusting
decision-making to lower-tier organizations based on a broad
framework decided by upper-tier organizations.
Automotive Business
Division Headquarters
Industrial Machinery Business
Division Headquarters
Japan
The
Americas
Europe
China
ASEAN
India
South
Korea
Functional Headquarters
*Individual sites are divided by regions it has a presence in: Japan,
The Americas, Europe, China, ASEAN, India and South Korea.
Global Management Evolution
NSK has worked to localize management with the aim of
building a system able to undertake locally oriented, agile
business management in each region as it expands
operations overseas. Currently, the Company is expanding
business under local leadership by placing numerous
local employees in key posts that include regional
managers.
With the perspective of fostering global management
cooperation, NSK has held the International Management
Committee (IMC) meeting, where top regional managers
discuss mid-term management plans, business
strategies, and fiscal year business budgets biannually at
the Tokyo headquarters. The IMC goes beyond simply
strengthening collaboration across regions and
headquarters to serve as a platform for all regions to
participate in global management. IMC meetings have
been held for around 30 years and the 60th is scheduled
for March 2020.
Functional Headquarters Global Management
Functional headquarters support the smooth execution of business plans outlined by headquarters across the Group, thus
making coordination of these various functions indispensable. Each functional headquarters builds structures able to
realize robust global coordination in such areas as finance, legal affairs, human resources and ICT, as it holds global
meetings on a regular basis.
Functional Headquarters Key Roles
● Formulate strategies on specific functions in line with
business plans outlined by the headquarters
● Propose measures necessary for business operations
across the Group and take an optimal leadership role
for overall Group management
Key Objectives of Global Meetings
● Groupwide policy/strategy discussions, sharing,
vector coordination
● Mutual support to verify the implementation of and
to complete plans
● Increase shared measures in each region, raise
functions by spreading best practices to all regions
● Measures to exchange information on matters of
concern, adjust strategies, and improve speed
● Form mutual (human) networks
Functions
e
c
n
a
Fin
s
al affair
g
e
L
blic relatio
s
n
s
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rc
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m
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Q
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n
a
r
u
s
s
evelo
gy d
olo
n
Tech
6
2
0
n 2
Visio
Meeting frequency
1-4 times annually
Meeting locations
Japan (Tokyo headquarters) or each region on a rotating basis
Meeting duration
2-3 days
Represented regions
All regions
Attendee positions
Regional headquarters function managers and responsible officers
Number of attendees
1-3 persons from each region + 5-30 from the host country for
a total of 10-50 persons
NSK REPORT 2019
45
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Environmental Management
Why Environmental Management Matters
The realization of a sustainable society in which we find solutions to the advance of climate change and other environmental issues, and where
economic development and environmental protection coexist is a pressing issue facing all of humanity. Accordingly, NSK has positioned the
environment as one of its core values, and is working to strengthen measures aimed at maximizing the environmental contribution through its
products and minimizing the environmental impact from business activities while striving to enhance sustainable corporate value.
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 is working 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.
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 Negative 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.
Environmental Management
NSK has established a Global Environment Protection Committee as its highest
decision-making body for environmental management. Chaired by the president
and composed of the officers involved, such as from business division
headquarters and technology development divisions, the Global Environment
Protection 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
division and each business site work together to promote environmental efforts.
Held three times in fiscal 2018, the Global Environment Protection
Committee deliberated on the environmental goals of the 6th Mid-Term
Management Plan and the fiscal 2050 reduction targets for greenhouse gases,
and also confirmed the progress of the activities performed by each of the
specialized subcommittees.
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
Figures within parentheses indicate fiscal 2017 results
INPUT (Global)
Input and Output of Global Business Activities (FY2018)
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
758 × 103 tons (756×103 tons)
Materials and parts
21 × 103 tons (21×103 tons)
17,224TJ (17,088TJ)
Oils and greases
Energy
Energy
Steel
Fuel
2,455TJ (2,426TJ)
Suppliers
Components/
raw materials
Reduction of
Reduction of
environmental impact
environmental impact
Minimization of the
environmental
impact from
business activities
NSK
Development
Design
Procurement
progress with
environmental measures,
such as energy
conservation and resource
saving, at each stage of its
business activities, from
development and design to
manufacturing and
distribution, the Company is
working on initiatives
together with suppliers and
customers in its aim to
reduce the environmental
impact on society as a
whole.
Electricity and heat
14,769TJ (14,662TJ)
Water supply
Water
4,700 × 103 m3 (4,713 × 103 m3)
Manufacturing
Groundwater
2,011 × 103 m3 (1,869 × 103 m3)
General water
2,194 × 103 m3 (2,325 × 103 m3)
Distribution
Industrial water
495 × 103 m3 (519 × 103 m3)
Reduction of
Reduction of
environmental impact
environmental impact
Materials and parts
(Environmentally harmful substances)
Customers
Products/services
BOD
Maximization of an
environmental
contribution
through products
OUTPUT (Global)
Atmospheric gases
Greenhouse gases (CO2 equivalent)*
Fuel combustion (Scope 1)*
Electric power/heat use (Scope 2)*
(Reference) Indirect emissions (Scope 3)*
NOx
SOx
978×103 tons (997×103 tons)
142×103 tons (143×103 tons)
836×103 tons (854×103 tons)
2,705×103 tons (2,039×103 tons)
128 tons (132 tons)
42 tons (50 tons)
Waste
Total waste
230×103 tons (224×103 tons)
(Japan 113×103 tons (112×103 tons), outside Japan 117×103 tons (112×103 tons)
Recycled
208×103 tons (205×103 tons)
4×103 tons (3×103 tons)
18×103 tons (16×103 tons)
Incinerated waste and water treatment
Landfill waste
Water quantity
Discharged water
Rivers
Sewage system
3,159×103 m3 (3,040×103 m3)
729×103 m3 (453×103 m3)
2,430×103 m3 (2,587×103 m3)
1.4 tons (1.3 tons)
Environmentally harmful
substances
PRTR-designated substances (Japan)
72 tons (105 tons)
139 tons (154 tons)
* 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. 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.
PRTR-designated substances (Japan)
464 tons (490 tons)
VOC
Developing Environmentally Friendly Products
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 that make the most of the Company’s Four Core Technologies (tribology, materials, numerical simulation, and mechatronics),
plus one, namely manufacturing engineering. By delivering these products 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 stage-from R&D and design, to production, usage, and
disposal-by upholding the following standards:
1. Each product should contribute toward the energy and resource conservation of the machine in which it is installed.
2. The amount of energy and resources required during product manufacturing should be minimal.
3. Environmentally harmful substances should not be used in products or manufacturing processes.
4. Products should contribute to the health and safety of end users by having low vibration levels and low noise and dust emissions.
Initiatives to Maximize CO2 Emissions Reduction through Our Products
NSK aims to accelerate its contributions to the environment through its
products, and has formulated guidelines in order to calculate CO2 emissions
avoided at the customer use stage.
NSK’s work to improve upon the bearings and other products it produces
reduces friction loss and saves on weight, and this leads to energy savings for
products such as automobiles and appliances. In addition, advancing the
development of bearings for wind turbines functions to expand the use of
renewable energy. This is why NSK formulated guidelines that take into
account two different perspectives with regard to calculating CO2 emissions
avoided, namely contributing by improving base performance of products, and
contributing to energy diversification applications. As a result of the
calculations, in fiscal 2018 CO2 emissions avoided through NSK products
amounted to 1.39 million tons, exceeding the 980 thousand tons* in emissions
produced from our business activities. NSK is working to improve upon these
efforts and aims to avoid CO2 emissions of two million tons by fiscal 2021.
* The total of scope 1 and scope 2 greenhouse gas emissions (volumes of CO2, others)
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.
For example, with a bearing, 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 a cumulative total of 226 environmentally friendly products by fiscal 2018.
Environmentally Friendly Products Developed in Fiscal 2018
Maximize reductions of CO2 emissions
Contribution to energy diversification applications
Contribution by improving base performance
High efficiency
Shift toward electric
Shift toward electric
(vehicles)
(vehicles)
Renewable
energy
Long (operating)
life
Bearings
Compact and
lightweight
Precision
Precision
machinery
machinery
and parts
and parts
Automotive
Automotive
components
components
Neco = Product value V (product life, performance, other)
Environmental impact E
(product weight, power consumption, other)
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
Products
Technology Developed by NSK
Benefits for Customers Neco
High-Efficiency
Motor Bearings
https://www.nsk.com/company/news/2018/1025b.html
High-Durability Precision
Ball Screws for
high-accuracy machine
tools
● Loss reduction
The application of an appropriate amount of
specialized grease, developed by NSK, reduces
stirring resistance and cuts loss by 60%
● Extending product life
Specialized grease curtails friction in the
bearing interior and extends product life
(by more than 2.7 times)
● Energy savings
Lower motor power
consumption for industrial
machinery
● Resource conservation
Reduction of resource
consumption by extending
product lifespan
● Extending bearing accuracy lifespan
Use of a proprietary surface modification technology
enhances oil film formation characteristics, which
suppresses raceway surface friction and leads to
maintaining accuracy over a lengthy period
● Reducing frictional torque during low-speed running*
● Improved reliability
Prevention of deterioration in
machining accuracy for highly
accurate machine tools
● Maintenance cycle extension
Lower maintenance frequency
Frictional torque is reduced as an oil film is formed
● Energy savings
during low-speed running that causes severe
Lower frictional torque
contributes to energy savings
2.5
1.5
https://www.nsk.com/company/news/2018/1030a.html
conditions
* Friction is reduced during rotations, making lighter power rotations possible
Other related environmental
management information
NSK’s Website: Home＞Sustainability＞Environmental activities https://www.nsk.com/sustainability/environment/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
46
NSK REPORT 2019
NSK REPORT 2019
47
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Environmental Management
Why Environmental Management Matters
The realization of a sustainable society in which we find solutions to the advance of climate change and other environmental issues, and where
economic development and environmental protection coexist is a pressing issue facing all of humanity. Accordingly, NSK has positioned the
environment as one of its core values, and is working to strengthen measures aimed at maximizing the environmental contribution through its
products and minimizing the environmental impact from business activities while striving to enhance sustainable corporate value.
NSK’s Approach
NSK adheres to the principle that global environmental protection, as
Environmental Management
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 is working 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.
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 Negative 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.
NSK has established a Global Environment Protection Committee as its highest
decision-making body for environmental management. Chaired by the president
and composed of the officers involved, such as from business division
headquarters and technology development divisions, the Global Environment
Protection 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
division and each business site work together to promote environmental efforts.
Held three times in fiscal 2018, the Global Environment Protection
Committee deliberated on the environmental goals of the 6th Mid-Term
Management Plan and the fiscal 2050 reduction targets for greenhouse gases,
and also confirmed the progress of the activities performed by each of the
specialized subcommittees.
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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Global environmental management
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NSK business activities in all regions/divisions
Input and Output of Global Business Activities (FY2018)
Figures within parentheses indicate fiscal 2017 results
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
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
manufacturing and
distribution, the Company is
working on initiatives
together with suppliers and
customers in its aim to
reduce the environmental
impact on society as a
whole.
INPUT (Global)
Materials and parts
Steel
758 × 103 tons (756×103 tons)
Oils and greases
21 × 103 tons (21×103 tons)
Energy
Suppliers
Components/
raw materials
Reduction of
Reduction of
environmental impact
environmental impact
Minimization of the
environmental
impact from
business activities
NSK
Development
Fuel
2,455TJ (2,426TJ)
Design
Electricity and heat
14,769TJ (14,662TJ)
Procurement
Water supply
Groundwater
2,011 × 103 m3 (1,869 × 103 m3)
General water
2,194 × 103 m3 (2,325 × 103 m3)
Distribution
Industrial water
495 × 103 m3 (519 × 103 m3)
Reduction of
Reduction of
environmental impact
environmental impact
Materials and parts
(Environmentally harmful substances)
Customers
PRTR-designated substances (Japan)
464 tons (490 tons)
Products/services
BOD
Maximization of an
environmental
contribution
through products
OUTPUT (Global)
Atmospheric gases
Greenhouse gases (CO2 equivalent)*
978×103 tons (997×103 tons)
Fuel combustion (Scope 1)*
142×103 tons (143×103 tons)
Electric power/heat use (Scope 2)*
836×103 tons (854×103 tons)
(Reference) Indirect emissions (Scope 3)*
2,705×103 tons (2,039×103 tons)
NOx
SOx
128 tons (132 tons)
42 tons (50 tons)
Waste
Total waste
230×103 tons (224×103 tons)
(Japan 113×103 tons (112×103 tons), outside Japan 117×103 tons (112×103 tons)
Recycled
Landfill waste
208×103 tons (205×103 tons)
4×103 tons (3×103 tons)
Water quantity
Discharged water
Rivers
Sewage system
3,159×103 m3 (3,040×103 m3)
729×103 m3 (453×103 m3)
2,430×103 m3 (2,587×103 m3)
1.4 tons (1.3 tons)
Environmentally harmful
substances
PRTR-designated substances (Japan)
VOC
72 tons (105 tons)
139 tons (154 tons)
Water
4,700 × 103 m3 (4,713 × 103 m3)
Manufacturing
Incinerated waste and water treatment
18×103 tons (16×103 tons)
* 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. 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.
46
NSK REPORT 2019
Developing Environmentally Friendly Products
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 that make the most of the Company’s Four Core Technologies (tribology, materials, numerical simulation, and mechatronics),
plus one, namely manufacturing engineering. By delivering these products 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 stage-from R&D and design, to production, usage, and
disposal-by upholding the following standards:
1. Each product should contribute toward the energy and resource conservation of the machine in which it is installed.
2. The amount of energy and resources required during product manufacturing should be minimal.
3. Environmentally harmful substances should not be used in products or manufacturing processes.
4. Products should contribute to the health and safety of end users by having low vibration levels and low noise and dust emissions.
Initiatives to Maximize CO2 Emissions Reduction through Our Products
NSK aims to accelerate its contributions to the environment through its
products, and has formulated guidelines in order to calculate CO2 emissions
avoided at the customer use stage.
NSK’s work to improve upon the bearings and other products it produces
reduces friction loss and saves on weight, and this leads to energy savings for
products such as automobiles and appliances. In addition, advancing the
development of bearings for wind turbines functions to expand the use of
renewable energy. This is why NSK formulated guidelines that take into
account two different perspectives with regard to calculating CO2 emissions
avoided, namely contributing by improving base performance of products, and
contributing to energy diversification applications. As a result of the
calculations, in fiscal 2018 CO2 emissions avoided through NSK products
amounted to 1.39 million tons, exceeding the 980 thousand tons* in emissions
produced from our business activities. NSK is working to improve upon these
efforts and aims to avoid CO2 emissions of two million tons by fiscal 2021.
* The total of scope 1 and scope 2 greenhouse gas emissions (volumes of CO2, others)
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.
For example, with a bearing, 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 a cumulative total of 226 environmentally friendly products by fiscal 2018.
Environmentally Friendly Products Developed in Fiscal 2018
Maximize reductions of CO2 emissions
Contribution to energy diversification applications
Contribution by improving base performance
High efficiency
Shift toward electric
Shift toward electric
(vehicles)
(vehicles)
Renewable
energy
Long (operating)
life
Bearings
Compact and
lightweight
Precision
Precision
machinery
machinery
and parts
and parts
Automotive
Automotive
components
components
Neco = Product value V (product life, performance, other)
Environmental impact E
(product weight, power consumption, other)
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
emissions that it generates.
Energy
17,224TJ (17,088TJ)
Products
Technology Developed by NSK
Benefits for Customers Neco
High-Efficiency
Motor Bearings
https://www.nsk.com/company/news/2018/1025b.html
High-Durability Precision
Ball Screws for
high-accuracy machine
tools
https://www.nsk.com/company/news/2018/1030a.html
● Loss reduction
The application of an appropriate amount of
specialized grease, developed by NSK, reduces
stirring resistance and cuts loss by 60%
● Extending product life
Specialized grease curtails friction in the
bearing interior and extends product life
(by more than 2.7 times)
● Energy savings
Lower motor power
consumption for industrial
machinery
● Resource conservation
Reduction of resource
consumption by extending
product lifespan
● Extending bearing accuracy lifespan
Use of a proprietary surface modification technology
enhances oil film formation characteristics, which
suppresses raceway surface friction and leads to
maintaining accuracy over a lengthy period
● Reducing frictional torque during low-speed running*
Frictional torque is reduced as an oil film is formed
during low-speed running that causes severe
conditions
● Improved reliability
Prevention of deterioration in
machining accuracy for highly
accurate machine tools
● Maintenance cycle extension
Lower maintenance frequency
● Energy savings
Lower frictional torque
contributes to energy savings
2.5
1.5
* Friction is reduced during rotations, making lighter power rotations possible
Other related environmental
management information
NSK’s Website: Home＞Sustainability＞Environmental activities https://www.nsk.com/sustainability/environment/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
NSK REPORT 2019
47
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Safety Management
Why Safety Management Matters
Promoting a safe and secure workplace is tied to the vitality of employees and the offering of exceptional products and services.
NSK has positioned safety as one of its core values, and works to raise the level of its activities globally, while heightening employee
awareness.
Raising the quality of the products and services a company offers greatly affects credibility among its customers and society, and is
linked to increase in corporate value. This is why 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 customers and suppliers.
NSK’s Approach
To protect the safety and health of each and every employee, NSK
approaches the issue of safety by undertaking 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.”
Maintaining safe workplaces means taking measures to
keep equipment safe and promoting global standards of safety
management, together with actively encouraging information
sharing, and by fostering a culture where employees watch out
for each other’s safety.
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 labor and safety-related regulations and
international standards, and we strive to foster a corporate
culture of “safety first” 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.
We are conducting activities globally with the intention of
obtaining the international standard covering occupational health
and safety management systems. Following our acquisition of
ISO 45001* at three production sites in Japan in fiscal 2019, we
plan to progressively proceed with acquisitions going forward.
* The international standard covering occupational health and
safety management systems issued by ISO in March 2018.
Announcement of safety and
health policy by management
Act
Do
Plan
Continuous
improvement
Spiral up
Check
Review
Basic elements
of system
● Reflect opinions
of employees
● Upgrade systems
● Document
procedures
● Control records
Lost-Time Injury Frequency Rate*1
In Japan
Outside Japan
Global
FY2016
FY2017
FY2018
0.28
0.89
0.68
0.26*2
0.79
0.60*2
0.30
0.41
0.37
*1 Lost-time injury frequency rate = Number of work accidents
resulting in one or more days of work absence/total actual
working hours × 1,000,000.
*2 Retroactively corrected to improve accuracy.
Initiatives to Prevent Occupational Accidents
NSK incorporates safety measures into its equipment from the design stage, and then conducts evaluations to raise the level of
equipment safety as we strive to prevent occupational damage due to human error or machinery malfunction. To this end, in its
equipment development divisions the Company develops “Safety Sub-assessors” who are highly knowledgeable and possess
capabilities concerning safety.
The Company also performs risk assessments on existing equipment at its production sites, and works to raise the level of its
safety measures. Aiming to realize this, from 2016 the Company implemented full-fledged training of safety sub-assessors, and their
number had grown to 471 individuals by fiscal 2018.
Initiatives to Raise Safety Awareness
NSK has compiled a manual which brings together procedures
used in its Safety Dojo* so that from fiscal 2018 we could roll out
this training, currently being implemented at a limited number
of plants, to production sites in countries around the world.
We have also created a safety and fire prevention portal on
our internal intranet to introduce throughout the Group disaster
information and safety measure resources that can be accessed
by employees through easy-to-understand videos and photos.
* Safety Dojo: Training area designed to help employees gain
awareness of safety hazards and the importance of work rules by
experiencing simulated accidents.
Other related safety
management information
NSK’s Website: Home＞Sustainability＞Creating a Dynamic Work Environment https://www.nsk.com/sustainability/hr/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
Super Safety Dojo at the NSK Fukushima Plant (Japan)
48
NSK REPORT 2019
Quality Management
Why Quality Management Matters
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 delivers-not 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.
Quality Assurance Vision 2026
NSK put in place 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 working to achieve the level of
“NSK Quality” that contributes to customer safety, security, and
confidence. 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 is deploying globally its innovative quality management system, NPDS (NSK Product Development System), 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, dedicated staff perform stringent checks to 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
Can it be processed and
and assembled
according to the
design?
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 divisions, including production, design development, production technology, quality assurance, sales and logistics,
NQ1 (NSK Quality No.1) activities aim to achieve zero defects in stable production, and are designed to optimize the flow of goods and information
throughout the 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 thoroughly carries out various improvements targeting zero defects on a test line. Results are then
rolled out horizontally to other lines and manufacturing sites.
Quality that Contributes to Safety and Security from the Perspective of Markets and Customers
NSK endeavors to satisfy the needs of its customers with regard to quality, and in
tandem with this, we work to grasp the needs from the perspective of the end user of
that product which contains the items we produce as we seek to construct a framework
in which we can continue to propose products and services that fully provide the quality
that society demands.
To this end, we take the issues we learn of through daily interactions with
customers and other exchanges of information, analyze that from the perspective of
quality assessments, and identify issues for improvement. In addition, we conduct
monitoring of the quality of products after they have been introduced to the market, and
then aggregate and analyze information on defects and other problems. By providing
feedback on issues to divisions involved in development, design, manufacturing, sales
and other areas, we enhance the level of products and services, and together with this,
endeavor to prevent quality problems before they occur.
Customer Commendations on Quality
NSK receives commendations from customers in recognition of is efforts.
January 2019 “Award for Excellence” from Ogura Clutch Co., Ltd.
February 2019 “Award for Quality Control Excellence” from Toyota Motor
Corporation
March 2019 “Quality Control Award” from Hino Motors, Ltd.
March 2019 “Excellence in Quality” from Toyota Motor Corporation, Kinu-ura Plant
April 2019
“REGIONAL AWARD for excellence in Quality” from
Yamaha Motor Co., Ltd.
Other related quality
management information
NSK’s Website: Home＞Sustainability＞Creating Quality to Earn the Confidence of Society https://www.nsk.com/sustainability/qa/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
NSK REPORT 2019
49
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Promoting a safe and secure workplace is tied to the vitality of employees and the offering of exceptional products and services.
NSK has positioned safety as one of its core values, and works to raise the level of its activities globally, while heightening employee
Announcement of safety and
health policy by management
Act
Do
Plan
Continuous
improvement
Spiral up
Check
Review
Basic elements
of system
● Reflect opinions
of employees
● Upgrade systems
● Document
procedures
● Control records
Lost-Time Injury Frequency Rate*1
In Japan
Outside Japan
Global
FY2016
FY2017
FY2018
0.28
0.89
0.68
0.26*2
0.79
0.60*2
0.30
0.41
0.37
*1 Lost-time injury frequency rate = Number of work accidents
resulting in one or more days of work absence/total actual
working hours × 1,000,000.
*2 Retroactively corrected to improve accuracy.
Initiatives to Prevent Occupational Accidents
NSK incorporates safety measures into its equipment from the design stage, and then conducts evaluations to raise the level of
equipment safety as we strive to prevent occupational damage due to human error or machinery malfunction. To this end, in its
equipment development divisions the Company develops “Safety Sub-assessors” who are highly knowledgeable and possess
capabilities concerning safety.
The Company also performs risk assessments on existing equipment at its production sites, and works to raise the level of its
safety measures. Aiming to realize this, from 2016 the Company implemented full-fledged training of safety sub-assessors, and their
number had grown to 471 individuals by fiscal 2018.
Safety Management
Why Safety Management Matters
awareness.
NSK’s Approach
To protect the safety and health of each and every employee, NSK
approaches the issue of safety by undertaking 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.”
Maintaining safe workplaces means taking measures to
keep equipment safe and promoting global standards of safety
management, together with actively encouraging information
sharing, and by fostering a culture where employees watch out
for each other’s safety.
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 labor and safety-related regulations and
international standards, and we strive to foster a corporate
culture of “safety first” that fully engages all employees at each
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
of our sites.
measures.
We are conducting activities globally with the intention of
obtaining the international standard covering occupational health
and safety management systems. Following our acquisition of
ISO 45001* at three production sites in Japan in fiscal 2019, we
plan to progressively proceed with acquisitions going forward.
* The international standard covering occupational health and
safety management systems issued by ISO in March 2018.
Initiatives to Raise Safety Awareness
NSK has compiled a manual which brings together procedures
used in its Safety Dojo* so that from fiscal 2018 we could roll out
this training, currently being implemented at a limited number
of plants, to production sites in countries around the world.
We have also created a safety and fire prevention portal on
our internal intranet to introduce throughout the Group disaster
information and safety measure resources that can be accessed
by employees through easy-to-understand videos and photos.
* Safety Dojo: Training area designed to help employees gain
awareness of safety hazards and the importance of work rules by
experiencing simulated accidents.
Quality Management
Why Quality Management Matters
Raising the quality of the products and services a company offers greatly affects credibility among its customers and society, and is
linked to increase in corporate value. This is why 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 customers and suppliers.
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 delivers-not 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.
Quality Assurance Vision 2026
NSK put in place 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 working to achieve the level of
“NSK Quality” that contributes to customer safety, security, and
confidence. 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
NPDS: Quality Management System
NSK is deploying globally its innovative quality management system, NPDS (NSK Product Development System), 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, dedicated staff perform stringent checks to 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.
Action Guidelines
● Put the customer first ● Be honest
● Provide 100% good products and services
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 divisions, including production, design development, production technology, quality assurance, sales and logistics,
NQ1 (NSK Quality No.1) activities aim to achieve zero defects in stable production, and are designed to optimize the flow of goods and information
throughout the 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 thoroughly carries out various improvements targeting zero defects on a test line. Results are then
rolled out horizontally to other lines and manufacturing sites.
Quality that Contributes to Safety and Security from the Perspective of Markets and Customers
NSK endeavors to satisfy the needs of its customers with regard to quality, and in
tandem with this, we work to grasp the needs from the perspective of the end user of
that product which contains the items we produce as we seek to construct a framework
in which we can continue to propose products and services that fully provide the quality
that society demands.
Customer Commendations on Quality
NSK receives commendations from customers in recognition of is efforts.
January 2019 “Award for Excellence” from Ogura Clutch Co., Ltd.
February 2019 “Award for Quality Control Excellence” from Toyota Motor
Other related safety
management information
NSK’s Website: Home＞Sustainability＞Creating a Dynamic Work Environment https://www.nsk.com/sustainability/hr/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
Super Safety Dojo at the NSK Fukushima Plant (Japan)
To this end, we take the issues we learn of through daily interactions with
customers and other exchanges of information, analyze that from the perspective of
quality assessments, and identify issues for improvement. In addition, we conduct
monitoring of the quality of products after they have been introduced to the market, and
then aggregate and analyze information on defects and other problems. By providing
feedback on issues to divisions involved in development, design, manufacturing, sales
and other areas, we enhance the level of products and services, and together with this,
endeavor to prevent quality problems before they occur.
Corporation
March 2019 “Quality Control Award” from Hino Motors, Ltd.
March 2019 “Excellence in Quality” from Toyota Motor Corporation, Kinu-ura Plant
April 2019
“REGIONAL AWARD for excellence in Quality” from
Yamaha Motor Co., Ltd.
48
NSK REPORT 2019
Other related quality
management information
NSK’s Website: Home＞Sustainability＞Creating Quality to Earn the Confidence of Society https://www.nsk.com/sustainability/qa/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
NSK REPORT 2019
49
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Human Resource Management
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 is an essential component for the sustainable growth of the
Company as a whole. This is why we are committed to creating an equal opportunity workplace that embraces diversity and inspires
each and every employee to put their best effort forward.
Basic 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 creating a “fair workplace that empowers the
individual.” This commitment features three key areas of focus:
leveraging a diverse workforce, building more engaging workplaces, and
providing opportunities for 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.
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,
utilizing their skills and encouraging their creativity and individuality” in
our Management Principles, 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.
Leveraging
a diverse workforce
Diversity
and inclusion
Work-life balance
A Fair Workplace
that Empowers the Individual
Building more
engaging workplaces
Respecting fundamental
rights at work
Creating safe
and inspiring workplaces
Improving health
and wellness
Providing opportunities
for growth
Talent management
Self-development
and educational
opportunities
Leveraging a Diverse Workforce
2026 Diversity Roadmap
NSK is promoting diversity and inclusion in a three-phase initiative lasting from 2016 to 2026.
2016
2019
2022
2026
Raising Awareness
Ingraining New Attitudes
Changing Behaviors
Transforming the Culture
Stage ❶
2019
Stage ❷
2022
Stage ❸
2026
Objectives
Employees recognize the
importance of diversity and are
accepting of our differences
Employees recognize the
importance of diversity and respect
those with diverse backgrounds
The organization is empowered by
respecting and promoting diversity
Promoting Diversity and Inclusion
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 (SOGI)* 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. SOGI stands for sexual orientation and gender identity.
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.
Female Employee Rate
and Female Manager Rate*
FY2016 FY2017 FY2018
We conduct training for female managerial candidates to prepare them with the
Female employees
10.7%
10.5%
Female managers
1.2%
1.6%
10.6％
1.6%
skills and mindset they will need to excel as leaders.
We also hold events to give female university students in the sciences an
opportunity to experience firsthand how a career in engineering can be a great option
for them. Through these programs, we hope to develop female leaders of the future.
50
NSK REPORT 2019
* Includes employees of NSK Ltd. and major NSK Group
companies in Japan
Other related human resource
NSK’s Website: Home＞Sustainability＞Creating a Dynamic Work Environment https://www.nsk.com/sustainability/hr/index.html
management information
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
NSK REPORT 2019
51
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)
Japanese Law
Up to 2 years old
(unpaid)
Reduced hours for
working parents
Through end of March
of child’s 6th grade year
Up to 3 years old
Caregiver leave
Reduced hours for
working caregivers
Up to 1 year
Up to 3 years
(eligible for extension)
Up to 93 days
Up to 3 years
Exemption from
half-day limit
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
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 also take 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 services on working public
holidays when regular daycare facilities are closed. 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.
We are also currently trialing seminars to support employees as
they make the transition back to work after parental leave. In addition,
we have published and widely distributed support guidebooks to help
ease concern and promote workplace communication on these issues
―one for working mothers, another for caregivers, and a third for
managers of working parents.
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. An improvement in employee productivity will lead to an improvement in their ability to produce quality work, which
will ultimately cultivate a more fulfilling life both at work and at home. For this reason, NSK strives to better manage employee working hours,
to encourage employees to take their annual paid leave, and to provide a variety of work style options like flextime to fit their diverse lifestyles.
We are also trialing telecommuting options̶from home or satellite office̶to offer new ways of working and lessen the burden of a commute.
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.
Providing Opportunities for Growth
Leveraging Global Talent
in roles around the world.
Human Resource Development Programs
At NSK, we are constantly looking for ways to best leverage our global talent. This is why we have worked with regional HR departments to
standardize rules and policies across regions, and to create programs aimed at developing a workforce that spans the globe. We have designed
NSK core competencies, which are used in leadership training and employee reviews. Our succession plan serves as a guide for the systematic
promotion of managers. We also operate a global mobility guideline that supports assignment across regions, allowing our workforce to thrive
To develop the talent necessary to support sustainable growth, NSK employs strategic assignment to ensure that all employees can realize
their full potential. We are also working to promote career advancement and boost employee motivation by orchestrating 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 both the Japan
Management College and the Global Management College, which provide selective training for future leaders of the organization. NSK has
also begun offering opportunities to participate in external education and liberal arts programs, with an aim to broaden horizons and develop
the well-rounded character required to succeed in global business.
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 NSK’s engineers. In addition, we have been focusing on language training in order to equip employees with the skills they need to
communicate effectively with people from around the world.
In fiscal 2018, we invested approximately ¥86,000 per person (non-consolidated) in employee development, allowing us to improve the
quality of our education and training programs and make them available to more employees.
Building More Engaging Workplaces
Health and Wellness Initiatives (Japan)
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.
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 2018, we 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.
In 2018, NSK was 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. We have worked to maintain our certification in 2019 as well.
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Human Resource Management
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 is an essential component for the sustainable growth of the
Company as a whole. This is why we are committed to creating an equal opportunity workplace that embraces diversity and inspires
each and every employee to put their best effort forward.
Basic 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 creating a “fair workplace that empowers the
individual.” This commitment features three key areas of focus:
leveraging a diverse workforce, building more engaging workplaces, and
providing opportunities for 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.
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,
utilizing their skills and encouraging their creativity and individuality” in
our Management Principles, 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.
Leveraging a Diverse Workforce
2026 Diversity Roadmap
Leveraging
a diverse workforce
Diversity
and inclusion
Work-life balance
A Fair Workplace
that Empowers the Individual
Building more
engaging workplaces
Respecting fundamental
rights at work
Creating safe
and inspiring workplaces
Improving health
and wellness
Providing opportunities
for growth
Talent management
Self-development
and educational
opportunities
NSK is promoting diversity and inclusion in a three-phase initiative lasting from 2016 to 2026.
2016
2019
2022
2026
Raising Awareness
Transforming the Culture
Ingraining New Attitudes
Changing Behaviors
Stage ❶
2019
Stage ❷
2022
Stage ❸
2026
Objectives
Employees recognize the
importance of diversity and are
accepting of our differences
Employees recognize the
importance of diversity and respect
those with diverse backgrounds
The organization is empowered by
respecting and promoting diversity
Promoting Diversity and Inclusion
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 (SOGI)* 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. SOGI stands for sexual orientation and gender identity.
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.
Female Employee Rate
and Female Manager Rate*
FY2016 FY2017 FY2018
We conduct training for female managerial candidates to prepare them with the
Female employees
10.7%
10.5%
skills and mindset they will need to excel as leaders.
We also hold events to give female university students in the sciences an
opportunity to experience firsthand how a career in engineering can be a great option
for them. Through these programs, we hope to develop female leaders of the future.
Female managers
1.2%
1.6%
* Includes employees of NSK Ltd. and major NSK Group
companies in Japan
10.6％
1.6%
Support Programs to Provide Flexibility
for Working Parents and Caregivers*
Parental leave
Reduced hours for
working parents
Caregiver leave
Reduced hours for
working caregivers
Exemption from
half-day limit
NSK
Through end of April following
child’s third birthday
(first five days are paid)
Through end of March
of child’s 6th grade year
Japanese Law
Up to 2 years old
(unpaid)
Up to 3 years old
Up to 1 year
Up to 93 days
Up to 3 years
(eligible for extension)
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
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 also take 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 services on working public
holidays when regular daycare facilities are closed. 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.
We are also currently trialing seminars to support employees as
they make the transition back to work after parental leave. In addition,
we have published and widely distributed support guidebooks to help
ease concern and promote workplace communication on these issues
―one for working mothers, another for caregivers, and a third for
managers of working parents.
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. An improvement in employee productivity will lead to an improvement in their ability to produce quality work, which
will ultimately cultivate a more fulfilling life both at work and at home. For this reason, NSK strives to better manage employee working hours,
to encourage employees to take their annual paid leave, and to provide a variety of work style options like flextime to fit their diverse lifestyles.
We are also trialing telecommuting options̶from home or satellite office̶to offer new ways of working and lessen the burden of a commute.
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.
Providing Opportunities for Growth
Leveraging Global Talent
At NSK, we are constantly looking for ways to best leverage our global talent. This is why we have worked with regional HR departments to
standardize rules and policies across regions, and to create programs aimed at developing a workforce that spans the globe. We have designed
NSK core competencies, which are used in leadership training and employee reviews. Our succession plan serves as a guide for the systematic
promotion of managers. We also operate a global mobility guideline that supports assignment across regions, allowing our workforce to thrive
in roles around the world.
Human Resource Development Programs
To develop the talent necessary to support sustainable growth, NSK employs strategic assignment to ensure that all employees can realize
their full potential. We are also working to promote career advancement and boost employee motivation by orchestrating 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 both the Japan
Management College and the Global Management College, which provide selective training for future leaders of the organization. NSK has
also begun offering opportunities to participate in external education and liberal arts programs, with an aim to broaden horizons and develop
the well-rounded character required to succeed in global business.
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 NSK’s engineers. In addition, we have been focusing on language training in order to equip employees with the skills they need to
communicate effectively with people from around the world.
In fiscal 2018, we invested approximately ¥86,000 per person (non-consolidated) in employee development, allowing us to improve the
quality of our education and training programs and make them available to more employees.
Building More Engaging Workplaces
Health and Wellness Initiatives (Japan)
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.
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 2018, we 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.
In 2018, NSK was 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. We have worked to maintain our certification in 2019 as well.
Other related human resource
management information
NSK’s Website: Home＞Sustainability＞Creating a Dynamic Work Environment https://www.nsk.com/sustainability/hr/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
50
NSK REPORT 2019
NSK REPORT 2019
51
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Supply Chain Management
Why Supply Chain Management Matters
NSK’s business is supported by many suppliers. We strive to build trusting relationships and grow continuously with them
by improving our technical expertise as well as product quality. However, there are various issues, including human rights and
environmental protection, in our global supply chain, that could pose risks to our business continuity. NSK has been tackling these
issues in an effort to minimize risks, and help achieve a sustainable society.
NSK’s Approach
NSK has formulated NSK Group Basic Policy for Procurement with
the aim of engaging in procurement practices that are fair,
environment friendly and care for society. We share this policy
with suppliers, while promoting CSR and Green procurement
throughout the global supply chain. Our goal is to realize a
sustainable society.
Holds Procurement Policy Briefings
Every year, NSK holds a supplier
conference with major suppliers.
Through this opportunity, we share
the procurement policy and ask
suppliers to implement more
CSR-conscious management.
At the last conference held in
January 2019 at NSK’s headquarters,
we raised issues regarding cybersecurity, appropriate terms of
employment / working conditions for foreign workers, and the
importance of continuously improving CSR activities 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.
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.
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.
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.
Strong Awareness of Human Rights in Procurement Activities
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 of suppliers of parts and materials used in NSK products.
Surveys to date 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. We put more effort on human rights protection throughout the supply
chain, as society urges global manufacturers do more in this area (for example, the Modern Slavery Act 2015 UK). Accordingly, we
revised the NSK Supplier CSR Guidelines along with the CSR self-assessment checklist.
Promoting and Enhancing CSR Activities
NSK distributes NSK Supplier CSR Guidelines and NSK Group Green Procurement
Standards, asking 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, for CSR self-assessments conducted in Japan and China in
2018 we added assessment items that include the status of compliance to
labor and environmental laws as well as the listing of environmental pollution
and labor accidents, while feeding back evaluation results to suppliers in an
effort to spread these activities and improve their performance. NSK has also
begun an initiative to introduce CSR audits based on its new objective
standards.
CSR Self-Assessment Results (2018 Japan)
Supply chain
implementation
Information
disclosure
Compliance
100％
80％
60％
40％
20％
0％
Human rights/
Labor
Environment
Risk mitigation
Local communities
(Replies: 426 companies)
Other related supply chain
information
NSK’s Website: Home＞Sustainability＞Supply Chain Management https://www.nsk.com/sustainability/supplier/index.html
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
All NSK Group Employees
52
NSK REPORT 2019
NSK REPORT 2019
53
Compliance
NSK’s Approach
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.
● Formulates and revises the “Rules for Compliance with the
(1) Strengthening NSK’s Compliance Systems
① Compliance Committee
Competition Law,” “Operational Rules of Hotline,” “Anti-Bribery
Standards,” “Personal Information Management Regulations” and
NSK established this committee in March 2012 and holds it
“Internal Regulation for Preventing Insider Trading,”
three-four times a year.
Manager Meetings
② Global Legal and Compliance Meetings; Global Legal Department
● Regularly distributes the president’s message calling for stringent compliance
● Implements compliance-related e-learning for officers and employees
NSK has held these meetings with the members responsible for
● Conducts compliance training at sales divisions, plants,
compliance from regional headquarters biannually since August 2012.
engineering sections and Group companies
In fiscal 2018, meetings were held in the United Kingdom in the first
● Designated July 26 as “NSK Corporate Philosophy Day” during
half and Japan in the second half. A meeting solely for legal department
which various special events are held
managers at key locations was held once in Japan in August.
● Conducts a compliance slogan contest during compliance month
(3) Strengthening Education and Awareness Raising Activities
③ Compliance Conferences
(July 26 -August 31)
NSK has held these conferences with the compliance
● Internally shares compliance violation information
representatives from each division and Group companies in Japan
(4) Strengthening Monitoring
twice a year since December 2012.
(2) Establishing Relevant Regulations & Systems
● Conducts internal audits of sales divisions relating to
Antimonopoly Act compliance
● Operates a system for examining whether to participate in
● Evaluates internal control related to compliance for the NSK Group
meetings attended by competitors
● Conducts a compliance awareness survey for the NSK Group
● Distributes the“ NSK Compliance Guidebook” (revised in 2018)
● Operates a whistleblowing system (hotline) in each region
Examples of Key Initiatives in Fiscal 2018
(1) Preventing Violations of the Competition Law
discussion on the Corporate Philosophy. Overseas, after speeches by facility
We work to realize fair and free transactions by raising awareness of
managers, each site held its own events that included lectures by outside
adherence to the Competition Law. In fiscal 2018, we conducted training on
experts and discussions on the Corporate Philosophy and compliance.
the Competition Law and compliance which was provided to 2,960 people
(3) Compliance Awareness Surveys
through 207 sessions mainly at sales divisions both in and outside Japan. It
NSK has commissioned an outside survey agency to conduct a compliance
took around 60 minutes per person (including compliance training).
awareness survey since 2014.
(2) NSK Corporate Philosophy Day
The fifth survey held in fiscal 2018 was conducted as employee
In order to revisit the lessons learned from the past incidents, reconfirm the
engagement survey in cooperation with the Human Resources Department
resolve of all employees that no anti-competitive incident will ever occur
and 15,538 executives and employees in Japan participated in it.
again, and to ensure that all NSK Group employees review the Corporate
In fiscal 2019, we will continue to undertake initiatives to address issues
Philosophy and make it their own code of conduct, the date of July 26 has
brought to light in survey results (such as enhancing compliance in
been designated “NSK Corporate Philosophy Day.”
manufacturing divisions and further improving the reliability of a
In fiscal 2018, the president gave a speech that was broadcasted to NSK
whistleblowing system) and activities to raise and spread compliance
facilities in Japan and overseas. In Japan, several executives held a panel
awareness.
NSK Group Compliance System (As of August 2019)
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
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Supply Chain Management
Why Supply Chain Management Matters
NSK’s business is supported by many suppliers. We strive to build trusting relationships and grow continuously with them
by improving our technical expertise as well as product quality. However, there are various issues, including human rights and
environmental protection, in our global supply chain, that could pose risks to our business continuity. NSK has been tackling these
issues in an effort to minimize risks, and help achieve a sustainable society.
NSK’s Approach
NSK has formulated NSK Group Basic Policy for Procurement with
the aim of engaging in procurement practices that are fair,
environment friendly and care for society. We share this policy
with suppliers, while promoting CSR and Green procurement
throughout the global supply chain. Our goal is to realize a
sustainable society.
Holds Procurement Policy Briefings
Every year, NSK holds a supplier
conference with major suppliers.
Through this opportunity, we share
the procurement policy and ask
suppliers to implement more
CSR-conscious management.
At the last conference held in
January 2019 at NSK’s headquarters,
we raised issues regarding cybersecurity, appropriate terms of
employment / working conditions for foreign workers, and the
importance of continuously improving CSR activities 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.
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.
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.
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.
Strong Awareness of Human Rights in Procurement Activities
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 of suppliers of parts and materials used in NSK products.
Surveys to date 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. We put more effort on human rights protection throughout the supply
chain, as society urges global manufacturers do more in this area (for example, the Modern Slavery Act 2015 UK). Accordingly, we
revised the NSK Supplier CSR Guidelines along with the CSR self-assessment checklist.
Promoting and Enhancing CSR Activities
CSR Self-Assessment Results (2018 Japan)
NSK distributes NSK Supplier CSR Guidelines and NSK Group Green Procurement
Standards, asking 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, for CSR self-assessments conducted in Japan and China in
2018 we added assessment items that include the status of compliance to
labor and environmental laws as well as the listing of environmental pollution
and labor accidents, while feeding back evaluation results to suppliers in an
effort to spread these activities and improve their performance. NSK has also
begun an initiative to introduce CSR audits based on its new objective
standards.
Compliance
100％
80％
60％
40％
20％
0％
Supply chain
implementation
Human rights/
Labor
Information
disclosure
Environment
Risk mitigation
Local communities
(Replies: 426 companies)
Compliance
NSK’s Approach
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
① Compliance Committee
NSK established this committee in March 2012 and holds it
three-four times a year.
② Global Legal and Compliance Meetings; Global Legal Department
Manager Meetings
NSK has held these meetings with the members responsible for
compliance from regional headquarters biannually since August 2012.
In fiscal 2018, meetings were held in the United Kingdom in the first
half and Japan in the second half. A meeting solely for legal department
managers at key locations was held once in Japan in August.
③ Compliance Conferences
NSK has held these conferences with the compliance
representatives from each division and Group companies 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)
Examples of Key Initiatives in Fiscal 2018
(1) Preventing Violations of the Competition Law
We work to realize fair and free transactions by raising awareness of
adherence to the Competition Law. In fiscal 2018, we conducted training on
the Competition Law and compliance which was provided to 2,960 people
through 207 sessions mainly at sales divisions both in and outside Japan. It
took around 60 minutes per person (including compliance training).
(2) NSK Corporate Philosophy Day
In order to revisit the lessons learned from the past incidents, reconfirm the
resolve of all employees that no anti-competitive incident will ever occur
again, and to ensure that all NSK Group 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.”
In fiscal 2018, the president gave a speech that was broadcasted to NSK
facilities in Japan and overseas. In Japan, several executives held a panel
NSK Group Compliance System (As of August 2019)
● Formulates and revises the “Rules for Compliance with the
Competition Law,” “Operational Rules of Hotline,” “Anti-Bribery
Standards,” “Personal Information Management 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
● Implements compliance-related e-learning for officers and employees
● Conducts compliance training at sales divisions, plants,
engineering sections and Group companies
● Designated July 26 as “NSK Corporate Philosophy Day” during
which various special events are held
● 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 whistleblowing system (hotline) in each region
discussion on the Corporate Philosophy. Overseas, after speeches by facility
managers, each site held its own events that included lectures by outside
experts and discussions on the Corporate Philosophy and compliance.
(3) Compliance Awareness Surveys
NSK has commissioned an outside survey agency to conduct a compliance
awareness survey since 2014.
The fifth survey held in fiscal 2018 was conducted as employee
engagement survey in cooperation with the Human Resources Department
and 15,538 executives and employees in Japan participated in it.
In fiscal 2019, we will continue to undertake initiatives to address issues
brought to light in survey results (such as enhancing compliance in
manufacturing divisions and further improving the reliability of a
whistleblowing system) and activities to raise and spread compliance
awareness.
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
Other related supply chain
NSK’s Website: Home＞Sustainability＞Supply Chain Management https://www.nsk.com/sustainability/supplier/index.html
information
Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
All NSK Group Employees
52
NSK REPORT 2019
NSK REPORT 2019
53
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Corporate Governance
NSK’s approach
NSK believes that the establishment and maintenance of systems that ensure transparent, fair and timely decision making is essential
in order to achieve sustainable growth and increase our mid- to long-term corporate value. To realize this objective, we are working to
construct our corporate governance systems based on the following four guiding principles.
Policy on Development of Corporate Governance Systems
We aim:
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 ensure that supervisory organizations have oversight of executive organizations by clearly separating the two.
3 To strengthen supervisory organizations’ oversight of the executive organizations by ensuring cooperation between the two.
4 To improve the fairness of management by strengthening compliance systems.
Corporate Governance Systems
Current Systems and Operating Status
NSK has adopted a Company with Three Committees (Nomination,
Audit and Compensation) as its form of corporate organization to
better achieve the basic approach. NSK’s Board of Directors
determines basic management policies, etc. with the aim of
achieving the Group’s sustainable growth and increasing mid-to
long-term corporate value. The Board proactively delegates
decision-making authority regarding business execution to executive
organizations, while supervising the status of implementation in an
appropriate manner. The CEO has the ultimate authority and
responsibility for all decision-making and operational executive
functions delegated by the Board. Under the direction of the CEO,
executive officers are responsible for executing their respective
duties in accordance with the division of duties.
NSK’s Corporate Governance Structure
Shareholders Meeting
(Executive Organizations)
Election & dismissal of Directors
Proposal & Report
(Supervisory Organizations)
Initiatives to Further Enhance Effectiveness of the Board of Directors
President & Representative Executive Officer/CEO
Report
Direction
Report
Report
Report
Compliance Committee
CSR Division HQ
Compliance Enhancement Office
Operating
Committee
Inquiry
Executive
Officers Meeting
Cooperation
Disclosure Committee
Direction
Crisis Management
Committee
Crisis Management
Office
Direction
Internal Audit Department
Direction
Cooperation
Election & dismissal
of Executive Officers
Delegation of
authority Supervision
Report
Board of Directors
Election & dismissal
of each committee
member
Report
Nomination
Committee
Compensation
Committee
Audit Committee
Roles and Structure of Supervisory Organizations
(As of August 2019)
Internal
director
Outside director
(Men)
Outside director
(Women)
Organizations
Board of Directors
Nomination Committee
Compensation Committee
Audit Committee
Structure
Chair
Chair
Chair
Chair
12 members
(7 internal directors, 5 outside directors)
● At least one third of Board are
outside directors
3 members
(2 outside directors, 1 internal director)
● Majority outside directors
● Chair : Outside director
3 members
(2 outside directors, 1 internal director)
● Majority outside directors
● Chair : Outside director
3 members
(2 outside directors, 1 internal director)
● Majority outside directors
● Chair : Outside director
Objectives
and
Authority
Secretariat
Number of
times convened
in FY2018
● Passes resolutions related to
basic management policies, etc.
(including delegation of duties to
executive officers)
● Supervises execution of duties by
executive officers
● Determines the content of
proposals submitted to the
Shareholders Meeting
regarding the appointment or
dismissal of directors
● Determines policies on the
compensation of directors and
executive officers
● Determines the individual
● Audits the duties of directors and
executive officers
● Creates audit reports
● Determines the content of proposals
compensation provided to directors and
executive officers, and others matters
related to appointment or dismissal of
the accounting auditor, and other matters
Corporate Planning
Division Headquarters,
Secretariat Office
Corporate Planning Division Headquarters,
Human Resources Management
Division Headquarters
Human Resources Management
Division Headquarters
Internal Audit Department
10
7
8
14
54
NSK REPORT 2019
NSK REPORT 2019
55
Changes to NSK’s Corporate Governance Systems
1999～
2004～
2006～
2015～
Form of
Corporate
Organization
1999
system
● Adopted an executive officer
● Transitioned to a Company
● Transitioned to a Company with
2004
● Transitioned to a Company
with Committees System
2006
with Committees
2015
1999
2004
● (Voluntary) Established a
Compensation Committee
● (Voluntary) Established a
Nomination Committee
Committee
2003
● (Voluntary) Established an Audit Committee
● Established Nomination, Compensation and
Audit committees based on the Companies Act of Japan
1999
2003
● One outside
● Two outside
director
directors
2004
2005
● Three outside
● Four outside
directors
directors
Three Committees
(Nomination, Audit and Compensation)
2018
● Chairs of three committees
all outside directors
2018
● Five outside
directors
2010
directors
● Established criteria for the independence of NSK’s outside
● Each of the Company’s outside directors registered
with the Tokyo Stock Exchange as an independent director
2002
● Established the Crisis
Management Committee
2004
● Established the Internal Audit Office (current
Internal Audit Department) to undertake auditing
functions and monitor the operations of the
Company
2005
2012
● Established the Compliance Committee
● Established the Information Disclosure Team (current Disclosure Committee)
2006
● Established the Internal Control Project Team (later merged into
the current Internal Audit Department)
Outside
Director
Others
Officer Training
Active Board Deliberations
NSK provides training to its directors and executive officers to
enhance their knowledge regarding relevant laws such as the
Companies Act of Japan, corporate governance, its business
and financial status.
We also hold executive sessions several times a year
related to the direction of our business strategies and CSR/ESG
management-related topics.
To achieve active Board deliberations, NSK believes that it is
important to provide information to directors in advance of the
meeting date. We provide information in an appropriate manner,
including distributing materials to all directors in advance, and
prior explanation by officers and the Board secretariat. NSK’s
Board of Directors meetings are around three hours long and
feature active discussion from all participants.
Evaluation of Effectiveness of the Board of Directors
To help further improve corporate value, NSK is taking steps to improve the effectiveness of its Board of Directors by further deepening
discussion of mid- to long-term management issues and direction. To this end, evaluations of the Board of Directors have been carried
out every year since fiscal 2015 to verify whether the functions of the Board are being properly fulfilled.
Meanwhile, outside experts have been charged with the responsibility of carrying out evaluations to maintain objectivity and fulfill
this responsibility by conducting questionnaires and interviews.
The main content of the questionnaire conducted in fiscal 2018 is outlined below.
● Role of the Board of Directors (including deliberating on management strategies, monitoring
Main Content
of Questionnaire
operation of internal control systems)
● Composition and balance of the Board of Directors
● Operation of the Board of Directors
● Operation of advisory committees (Nomination/Compensation/Audit Committees)
Results
of Evaluation
An assessment in fiscal 2018 by external experts found that the Board of Directors maintained a high
level of effectiveness. Details are as follows:
● The Board of Directors appropriately delegated authority to executive organizations and
appropriately monitored the execution of duties by executive officers, etc.
● Outside directors gave useful opinions based on their extensive knowledge of and experience in
corporate management, finance and accounting at Board of Directors’ meetings.
● Advisory committees maintained their independence and their reporting to the Board of Directors
was appropriate.
directors
2018
● Five outside
directors
● Each of the Company’s outside directors registered
Audit committees based on the Companies Act of Japan
with the Tokyo Stock Exchange as an independent director
2002
● Established the Crisis
Management Committee
2003
● (Voluntary) Established an Audit Committee
2010
● Established criteria for the independence of NSK’s outside
Outside
Director
Others
1999
● (Voluntary) Established a
Compensation Committee
Committee
1999
● One outside
director
2003
● Two outside
directors
2004
● Three outside
directors
2005
● Four outside
directors
2004
● (Voluntary) Established a
Nomination Committee
● Established Nomination, Compensation and
2015
● Transitioned to a Company with
Three Committees
(Nomination, Audit and Compensation)
2018
● Chairs of three committees
all outside directors
Form of
Corporate
Organization
1999
● Adopted an executive officer
system
2004
● Transitioned to a Company
with Committees System
2006
● Transitioned to a Company
with Committees
Changes to NSK’s Corporate Governance Systems
1999～
2004～
2006～
2015～
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Corporate Governance
NSK’s approach
NSK believes that the establishment and maintenance of systems that ensure transparent, fair and timely decision making is essential
in order to achieve sustainable growth and increase our mid- to long-term corporate value. To realize this objective, we are working to
construct our corporate governance systems based on the following four guiding principles.
Policy on Development of Corporate Governance Systems
We aim:
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 ensure that supervisory organizations have oversight of executive organizations by clearly separating the two.
3 To strengthen supervisory organizations’ oversight of the executive organizations by ensuring cooperation between the two.
4 To improve the fairness of management by strengthening compliance systems.
Corporate Governance Systems
Current Systems and Operating Status
NSK has adopted a Company with Three Committees (Nomination,
Audit and Compensation) as its form of corporate organization to
better achieve the basic approach. NSK’s Board of Directors
determines basic management policies, etc. with the aim of
achieving the Group’s sustainable growth and increasing mid-to
long-term corporate value. The Board proactively delegates
decision-making authority regarding business execution to executive
organizations, while supervising the status of implementation in an
appropriate manner. The CEO has the ultimate authority and
responsibility for all decision-making and operational executive
functions delegated by the Board. Under the direction of the CEO,
executive officers are responsible for executing their respective
duties in accordance with the division of duties.
NSK’s Corporate Governance Structure
Shareholders Meeting
President & Representative Executive Officer/CEO
Board of Directors
Report
Direction
Report
Report
Report
authority Supervision
Election & dismissal
of each committee
member
Report
Compliance Committee
CSR Division HQ
Compliance Enhancement Office
Operating
Committee
Inquiry
Executive
Officers Meeting
Disclosure Committee
Direction
Crisis Management
Committee
Crisis Management
Office
Direction
Internal Audit Department
Election & dismissal
of Executive Officers
Delegation of
Report
Cooperation
Direction
Cooperation
Nomination
Committee
Compensation
Committee
Audit Committee
Roles and Structure of Supervisory Organizations
(As of August 2019)
Internal
director
Outside director
(Men)
Outside director
(Women)
Organizations
Board of Directors
Nomination Committee
Compensation Committee
Audit Committee
Structure
Chair
12 members
Chair
3 members
Chair
3 members
Chair
3 members
(7 internal directors, 5 outside directors)
(2 outside directors, 1 internal director)
(2 outside directors, 1 internal director)
(2 outside directors, 1 internal director)
● At least one third of Board are
outside directors
● Majority outside directors
● Chair : Outside director
● Majority outside directors
● Chair : Outside director
● Majority outside directors
● Chair : Outside director
● Passes resolutions related to
basic management policies, etc.
(including delegation of duties to
● Determines the content of
proposals submitted to the
Shareholders Meeting
● Determines policies on the
compensation of directors and
executive officers
● Audits the duties of directors and
executive officers
● Creates audit reports
regarding the appointment or
● Determines the individual
● Determines the content of proposals
● Supervises execution of duties by
dismissal of directors
executive officers)
executive officers
compensation provided to directors and
executive officers, and others matters
related to appointment or dismissal of
the accounting auditor, and other matters
Corporate Planning
Division Headquarters,
Secretariat Office
Corporate Planning Division Headquarters,
Human Resources Management
Division Headquarters
Human Resources Management
Division Headquarters
Internal Audit Department
10
7
8
14
Objectives
and
Authority
Secretariat
Number of
times convened
in FY2018
54
NSK REPORT 2019
(Executive Organizations)
Election & dismissal of Directors
Proposal & Report
(Supervisory Organizations)
Initiatives to Further Enhance Effectiveness of the Board of Directors
2006
● Established the Internal Control Project Team (later merged into
the current Internal Audit Department)
Officer Training
NSK provides training to its directors and executive officers to
enhance their knowledge regarding relevant laws such as the
Companies Act of Japan, corporate governance, its business
and financial status.
We also hold executive sessions several times a year
related to the direction of our business strategies and CSR/ESG
management-related topics.
Active Board Deliberations
To achieve active Board deliberations, NSK believes that it is
important to provide information to directors in advance of the
meeting date. We provide information in an appropriate manner,
including distributing materials to all directors in advance, and
prior explanation by officers and the Board secretariat. NSK’s
Board of Directors meetings are around three hours long and
feature active discussion from all participants.
Evaluation of Effectiveness of the Board of Directors
To help further improve corporate value, NSK is taking steps to improve the effectiveness of its Board of Directors by further deepening
discussion of mid- to long-term management issues and direction. To this end, evaluations of the Board of Directors have been carried
out every year since fiscal 2015 to verify whether the functions of the Board are being properly fulfilled.
Meanwhile, outside experts have been charged with the responsibility of carrying out evaluations to maintain objectivity and fulfill
this responsibility by conducting questionnaires and interviews.
Main Content
of Questionnaire
The main content of the questionnaire conducted in fiscal 2018 is outlined below.
● Role of the Board of Directors (including deliberating on management strategies, monitoring
operation of internal control systems)
● Composition and balance of the Board of Directors
● Operation of the Board of Directors
● Operation of advisory committees (Nomination/Compensation/Audit Committees)
Results
of Evaluation
An assessment in fiscal 2018 by external experts found that the Board of Directors maintained a high
level of effectiveness. Details are as follows:
● The Board of Directors appropriately delegated authority to executive organizations and
appropriately monitored the execution of duties by executive officers, etc.
● Outside directors gave useful opinions based on their extensive knowledge of and experience in
corporate management, finance and accounting at Board of Directors’ meetings.
● Advisory committees maintained their independence and their reporting to the Board of Directors
was appropriate.
NSK REPORT 2019
55
2005
● Established the Information Disclosure Team (current Disclosure Committee)
Internal Audit Department) to undertake auditing
functions and monitor the operations of the
Company
2004
● Established the Internal Audit Office (current
2012
● Established the Compliance Committee
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Outside Directors
Selection Standards
NSK expects outside directors to contribute to enhancing and
reinforcing the Company’s corporate governance, achieving
sustainable growth and increasing mid-to long-term corporate
value. When electing outside directors, we verify requirement as
follows:
・ Persons who have neither a special interest with the Company
nor a conflict of interest with regular shareholders
・ Persons who meet NSK’s criteria for independence
・ Persons who have considerable experience and deep insight as
a corporate executive or as experts
・ Persons who can devote sufficient time to perform duties as an
outside director of NSK
The Nomination Committee determines outside director
candidates who meet the above criteria. The criteria for the
independence of NSK’s outside directors can be found on the
website below:
https://www.nsk.com/company/governance/index.html
These criteria satisfy those of the Tokyo Stock Exchange, Inc.
Provision of Information Regarding Business Execution
NSK provides opportunities for outside directors to attend
operating organizations and visit business facilities in Japan and
overseas that enables them to learn directly about the status of
business execution in order to deepen their understanding of
NSK’s business and matters specific to NSK.
In addition, the Company holds meetings comprised solely
of outside directors on an as-needed basis to facilitate
information exchange and foster shared understanding. While
respecting the objective of these meetings as an opportunity to
freely share opinions, the Board secretariat follows up any
relevant matters as appropriate to improve the effectiveness of
the Board of Directors.
Outside Director Attendance and the Three Committee Systems
●：Chair
Name
Date Appointed
as Director
Attendance at Board of Directors
and Committee Meetings in FY2018
Composition of Each Committee
from June 2019
Board
Nomination
Compensation
Audit
Nomination Compensation
Audit
Teruhiko Ikeda
June 2015
Hajime Bada
June 2018
Akemi Mochizuki
July 2018
Toshio Iwamoto
June 2019
Yoshitaka Fujita
June 2019
◎
100%
(10/10)
◎
100%
(7/7)
◎
100%
(6/6)
ｰ
ｰ
●
100%
(8/8)
◎
100%
(10/10)
●
◎
◎
100%
(6/6)
ｰ
ｰ
ｰ
ｰ
●
◎
◎
100%
(10/10)
ｰ
ｰ
●
◎
Notes: 1. Each of the outside directors has been registered with the Tokyo Stock Exchange as an independent director.
2. On June 22, 2018, Teruhiko Ikeda and Hajime Bada were appointed to the Audit Committee and Board of Directors/Nomination Committee,
respectively. On July 1, 2018, Akemi Mochizuki was appointed to the Board of Directors and Audit Committee. Accordingly, the number of meetings of
the Board of Directors and the three committees and the number of meetings subject to attendance in fiscal 2018 differ.
Internal Control
NSK is working to strengthen its Group-wide internal control
systems, including formulating a basic policy on the
establishment of internal control systems to ensure effective
global Group management and internal control functions. This
basic policy stipulates duties that must be performed by the
Audit Committee, as well as matters required to develop
systems for ensuring that the NSK Group’s operations are
conducted in an appropriate manner and that Executive Officers
comply with laws, regulations and the Articles of Incorporation
when performing their duties.
The Board formulates a basic policy on the establishment
of internal control systems in accordance with the Companies
Act and relevant laws. Executive Officers are required to
construct and operate legally required internal control systems
in accordance with the basic policy determined by resolution of
the Board in order to ensure compliance, risk management,
business efficiency, and the reliability of financial reporting
(decision-making mechanisms in the NSK Group, structure of
the reporting system and establishment of a regulatory
framework). The Internal Audit Department reports directly to
the CEO and is responsible for conducting audits to determine
the legality, adequacy, and efficiency etc. of operations from an
independent standpoint from the auditees. It is also responsible
for overseeing the evaluation of the effectiveness of internal
controls over financial reporting.
The Audit Committee utilizes the internal control system to
audit the performance of operations, and conducts audits to
ensure that the internal control system is constructed and
operated in a satisfactory manner. The Internal Audit
Department shall collaborate with and receive orders from the
Audit Committee and provide support to audits conducted by the
Audit Committee.
Response to Japan’s Corporate Governance Code
NSK complies with all principles of the Corporate Governance Code and outlines its policies in the Corporate Governance Report that it
submits to the Tokyo Stock Exchange, Inc. Please access the website below for NSK’s corporate governance reports in English.
English: https://www.nsk.com/company/governance/index.html
Directors/Officers’ Compensation
Compensation for Directors and Executive Officers, Policy on Determining Compensation Amounts and Calculation Methods
NSK has changed indicators for performance-based compensation (short-term performance-based compensation) for executive
officers starting in March 2020 as well as changed the stock-based compensation system for executive officers to a mid- to long-term
performance-based stock compensation system. However, the stock compensation program for directors will be operated as previously
as a stock compensation program with no added incentive for business performance, in consideration of the supervisory role of
directors. For directors who also serve as executive officers, stock-based compensation will not be provided for the director position.
The revised compensation for directors and executive officers, the policy on determining compensation amounts and the
calculation methods are as follows. Compensation for directors and executive officers, the policy on determining compensation
amounts and the calculation methods prior to these revisions are listed in the Fiscal 2018 Integrated Report
(https://www.nsk.com/jp/investors/library/pdf/nsk_report/ir201803.pdf).
NSK makes decisions on the executive compensation structure, compensation levels, and individual compensation, etc. at a
Compensation Committee meeting chaired by an outside director, and based on advice from external consultants as well as objective
information on compensation levels and trends at other companies.
NSK separately determines “directors’ compensation” and “executive officers’ compensation”. When a director also serves as an
executive officer, the total of each compensation amount shall be paid.
(1) Executive/Officers’ Compensation
The compensation package for executive officers consists of
a fixed basic compensation and a performance-based
compensation that fluctuates with performance. The
Company will target a compensation ratio of roughly 4:6 of
fixed compensation to performance-based compensation.
【Reference: Executive officer compensation package】
Basic compensation
Performance-based compensation
Short-term
performance-bas
ed compensation
Mid to long-term
performance-based
stock compensation
4
6
① Basic compensation
between executive officer compensation and the mid- to
long-term stock price, the Company has introduced in the fiscal
year ending March 2020 a performance-based stock
compensation program using a Board Benefit Trust system.
Through the system, points are fixed after three years based on a
relative evaluation of the Company’s total shareholder return
(TSR) through a comparison with the TOPIX growth rate, the
equivalent for which Company shares are then distributed upon
retirement. However, for a certain portion of the above, the NSK
will compensate executive officers with the equivalent amount
acquired by converting shares into cash.
(2) Directors’ Compensation
The compensation package for directors consists of a fixed
basic compensation and fluctuating stock compensation.
① Basic compensation
The amount of basic compensation is determined according to
the title of the executive officer. Moreover, an additional amount
will be paid to executive officers with representation rights.
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 Performance-based compensation
② Stock compensation
The performance-based compensation consists of a
short-term performance-based compensation and a mid- to
long-term performance-based stock compensation.
1) Short-term performance-based compensation
The short-term performance-based compensation will be
determined based on metrics consistent with management goals
to increase profitability, raise efficiency of shareholders’ equity,
and improve corporate value: metrics related to the operating
income margin, ROE and cash flow, as well as an achievement
target for ESG goals for CO2 emission reductions and safety and
quality improvement. The individual’s level of achievement in their
designated job duties is also evaluated when determining the
amount of compensation paid to each executive officer.
2) Mid- to long-term performance-based stock compensation
To further incentivize contributions to the sustainable
improvement of corporate value, to ensure they share the
interests of shareholders and to further reinforce the link
To further incentivize contributions to the sustainable
improvement of corporate value and to ensure they share the
interests of shareholders, the Company has introduced a stock
compensation program using a Board Benefit Trust system. The
system distributes Company shares upon retirement based on
points allocated each fiscal year, of which separate amounts are
given for outside and internal directors. However, for a certain
portion of the above, the Company will compensate executive
officers with the equivalent amount acquired by converting
shares into cash. For directors who also serve as executive
officers, stock-based compensation will not be provided for the
director position.
(3) Other
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.
Compensation Total by Classification of Directors/Officers and Compensation Type and No. of Directors/Officers
The amount of compensation for directors and executive officers between April 1, 2018, and March 31, 2019, was as follows.
Classification
Directors (internal)
Directors (outside)
Executive Officers
Compensation, etc., Total
(￥Millions)
Basic Compensation
Performance-Based Compensation
Stock Compensation
No. of Directors/
Officers
Amount
(￥Millions)
No. of Directors/
Officers
Amount
(￥Millions)
No. of Directors/
Officers
Amount
(￥Millions)
81
71
1,867
9
6
32
74
54
833
–
–
30
–
–
411
1
6
36
7
17
622
Notes: 1. Compensation (excluding stock compensation) for directors (internal) includes compensation for directors who also serve as executive officers.
2. The amount of performance-based compensation is the planned payment amount as of July 1, 2019, based on the results for the year ended March 31, 2019.
The amount of performance-based compensation as of July 2, 2018, based on the results for the year ended March 31, 2018, was ¥802 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 ended March
31, 2019 and booked as costs in the fiscal year ended March 31, 2019.
4. Figures listed above are rounded down to one million yen.
Directors/Officers Receiving a Total of ¥100 Million or More in Consolidated Compensation
The amount of compensation for directors and executive officers between April 1, 2018, and March 31, 2019, was as follows.
Name
Title
Company
Consolidated
Compensation, etc.,
Total (￥Millions)
Amount for Each Item of Consolidated Compensation, etc.
Basic
Compensation
(￥Millions)
Performance-Based
Compensation
(￥Millions)
Stock
Compensation
(￥Millions)
Retirement
Benefit
(￥Millions)
Toshihiro Uchiyama
Adrian Browne
Steven Beckman
153
106
134
Director
Executive Officer
Executive Officer
NSK
NSK
NSK
CEO
NSK Americas, Inc.
7
43
90
71
–
35
11
22
66
–
4
4
–
–
–
37
56
NSK REPORT 2019
NSK REPORT 2019
57
Activity Report (Actual and Forecast)
Initiatives to Strengthen CSR/ESG Management
Outside Directors
Selection Standards
NSK expects outside directors to contribute to enhancing and
reinforcing the Company’s corporate governance, achieving
sustainable growth and increasing mid-to long-term corporate
value. When electing outside directors, we verify requirement as
follows:
・ Persons who have neither a special interest with the Company
nor a conflict of interest with regular shareholders
・ Persons who meet NSK’s criteria for independence
・ Persons who have considerable experience and deep insight as
a corporate executive or as experts
・ Persons who can devote sufficient time to perform duties as an
outside director of NSK
The Nomination Committee determines outside director
candidates who meet the above criteria. The criteria for the
independence of NSK’s outside directors can be found on the
website below:
https://www.nsk.com/company/governance/index.html
These criteria satisfy those of the Tokyo Stock Exchange, Inc.
Provision of Information Regarding Business Execution
NSK provides opportunities for outside directors to attend
operating organizations and visit business facilities in Japan and
overseas that enables them to learn directly about the status of
business execution in order to deepen their understanding of
NSK’s business and matters specific to NSK.
In addition, the Company holds meetings comprised solely
of outside directors on an as-needed basis to facilitate
information exchange and foster shared understanding. While
respecting the objective of these meetings as an opportunity to
freely share opinions, the Board secretariat follows up any
relevant matters as appropriate to improve the effectiveness of
the Board of Directors.
Outside Director Attendance and the Three Committee Systems
●：Chair
Name
Date Appointed
as Director
Attendance at Board of Directors
and Committee Meetings in FY2018
Composition of Each Committee
from June 2019
Board
Nomination
Compensation
Audit
Nomination Compensation
Audit
Teruhiko Ikeda
June 2015
●
◎
◎
100%
(10/10)
◎
100%
(7/7)
◎
100%
(6/6)
ｰ
ｰ
●
100%
(8/8)
◎
100%
(10/10)
◎
100%
(6/6)
ｰ
ｰ
ｰ
ｰ
●
◎
◎
100%
(10/10)
ｰ
ｰ
●
◎
Notes: 1. Each of the outside directors has been registered with the Tokyo Stock Exchange as an independent director.
2. On June 22, 2018, Teruhiko Ikeda and Hajime Bada were appointed to the Audit Committee and Board of Directors/Nomination Committee,
respectively. On July 1, 2018, Akemi Mochizuki was appointed to the Board of Directors and Audit Committee. Accordingly, the number of meetings of
the Board of Directors and the three committees and the number of meetings subject to attendance in fiscal 2018 differ.
Hajime Bada
June 2018
Akemi Mochizuki
July 2018
Toshio Iwamoto
June 2019
Yoshitaka Fujita
June 2019
Internal Control
NSK is working to strengthen its Group-wide internal control
systems, including formulating a basic policy on the
establishment of internal control systems to ensure effective
global Group management and internal control functions. This
basic policy stipulates duties that must be performed by the
Audit Committee, as well as matters required to develop
systems for ensuring that the NSK Group’s operations are
conducted in an appropriate manner and that Executive Officers
comply with laws, regulations and the Articles of Incorporation
when performing their duties.
The Board formulates a basic policy on the establishment
of internal control systems in accordance with the Companies
Act and relevant laws. Executive Officers are required to
construct and operate legally required internal control systems
in accordance with the basic policy determined by resolution of
the Board in order to ensure compliance, risk management,
business efficiency, and the reliability of financial reporting
(decision-making mechanisms in the NSK Group, structure of
the reporting system and establishment of a regulatory
framework). The Internal Audit Department reports directly to
the CEO and is responsible for conducting audits to determine
the legality, adequacy, and efficiency etc. of operations from an
independent standpoint from the auditees. It is also responsible
for overseeing the evaluation of the effectiveness of internal
controls over financial reporting.
The Audit Committee utilizes the internal control system to
audit the performance of operations, and conducts audits to
ensure that the internal control system is constructed and
operated in a satisfactory manner. The Internal Audit
Department shall collaborate with and receive orders from the
Audit Committee and provide support to audits conducted by the
Audit Committee.
Response to Japan’s Corporate Governance Code
NSK complies with all principles of the Corporate Governance Code and outlines its policies in the Corporate Governance Report that it
submits to the Tokyo Stock Exchange, Inc. Please access the website below for NSK’s corporate governance reports in English.
English: https://www.nsk.com/company/governance/index.html
56
NSK REPORT 2019
Directors/Officers’ Compensation
Compensation for Directors and Executive Officers, Policy on Determining Compensation Amounts and Calculation Methods
NSK has changed indicators for performance-based compensation (short-term performance-based compensation) for executive
officers starting in March 2020 as well as changed the stock-based compensation system for executive officers to a mid- to long-term
performance-based stock compensation system. However, the stock compensation program for directors will be operated as previously
as a stock compensation program with no added incentive for business performance, in consideration of the supervisory role of
directors. For directors who also serve as executive officers, stock-based compensation will not be provided for the director position.
The revised compensation for directors and executive officers, the policy on determining compensation amounts and the
calculation methods are as follows. Compensation for directors and executive officers, the policy on determining compensation
amounts and the calculation methods prior to these revisions are listed in the Fiscal 2018 Integrated Report
(https://www.nsk.com/jp/investors/library/pdf/nsk_report/ir201803.pdf).
NSK makes decisions on the executive compensation structure, compensation levels, and individual compensation, etc. at a
Compensation Committee meeting chaired by an outside director, and based on advice from external consultants as well as objective
information on compensation levels and trends at other companies.
NSK separately determines “directors’ compensation” and “executive officers’ compensation”. When a director also serves as an
executive officer, the total of each compensation amount shall be paid.
(1) Executive/Officers’ Compensation
The compensation package for executive officers consists of
a fixed basic compensation and a performance-based
compensation that fluctuates with performance. The
Company will target a compensation ratio of roughly 4:6 of
fixed compensation to performance-based compensation.
【Reference: Executive officer compensation package】
Basic compensation
Performance-based compensation
Mid to long-term
performance-based
stock compensation
Short-term
performance-bas
ed compensation
4
6
① Basic compensation
The amount of basic compensation is determined according to
the title of the executive officer. Moreover, an additional amount
will be paid to executive officers with representation rights.
between executive officer compensation and the mid- to
long-term stock price, the Company has introduced in the fiscal
year ending March 2020 a performance-based stock
compensation program using a Board Benefit Trust system.
Through the system, points are fixed after three years based on a
relative evaluation of the Company’s total shareholder return
(TSR) through a comparison with the TOPIX growth rate, the
equivalent for which Company shares are then distributed upon
retirement. However, for a certain portion of the above, the NSK
will compensate executive officers with the equivalent amount
acquired by converting shares into cash.
(2) Directors’ Compensation
The compensation package for directors consists of a fixed
basic compensation and fluctuating 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 Performance-based compensation
② Stock compensation
The performance-based compensation consists of a
short-term performance-based compensation and a mid- to
long-term performance-based stock compensation.
1) Short-term performance-based compensation
The short-term performance-based compensation will be
determined based on metrics consistent with management goals
to increase profitability, raise efficiency of shareholders’ equity,
and improve corporate value: metrics related to the operating
income margin, ROE and cash flow, as well as an achievement
target for ESG goals for CO2 emission reductions and safety and
quality improvement. The individual’s level of achievement in their
designated job duties is also evaluated when determining the
amount of compensation paid to each executive officer.
2) Mid- to long-term performance-based stock compensation
To further incentivize contributions to the sustainable
improvement of corporate value, to ensure they share the
interests of shareholders and to further reinforce the link
To further incentivize contributions to the sustainable
improvement of corporate value and to ensure they share the
interests of shareholders, the Company has introduced a stock
compensation program using a Board Benefit Trust system. The
system distributes Company shares upon retirement based on
points allocated each fiscal year, of which separate amounts are
given for outside and internal directors. However, for a certain
portion of the above, the Company will compensate executive
officers with the equivalent amount acquired by converting
shares into cash. For directors who also serve as executive
officers, stock-based compensation will not be provided for the
director position.
(3) Other
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.
Compensation Total by Classification of Directors/Officers and Compensation Type and No. of Directors/Officers
The amount of compensation for directors and executive officers between April 1, 2018, and March 31, 2019, was as follows.
Classification
Compensation, etc., Total
(￥Millions)
Basic Compensation
Amount
(￥Millions)
No. of Directors/
Officers
Performance-Based Compensation
No. of Directors/
Officers
Amount
(￥Millions)
Stock Compensation
Amount
(￥Millions)
No. of Directors/
Officers
Directors (internal)
Directors (outside)
Executive Officers
Notes: 1. Compensation (excluding stock compensation) for directors (internal) includes compensation for directors who also serve as executive officers.
81
71
1,867
74
54
833
–
–
411
9
6
32
–
–
30
1
6
36
7
17
622
2. The amount of performance-based compensation is the planned payment amount as of July 1, 2019, based on the results for the year ended March 31, 2019.
The amount of performance-based compensation as of July 2, 2018, based on the results for the year ended March 31, 2018, was ¥802 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 ended March
31, 2019 and booked as costs in the fiscal year ended March 31, 2019.
4. Figures listed above are rounded down to one million yen.
Directors/Officers Receiving a Total of ¥100 Million or More in Consolidated Compensation
The amount of compensation for directors and executive officers between April 1, 2018, and March 31, 2019, was as follows.
Name
Consolidated
Compensation, etc.,
Total (￥Millions)
Title
Company
Amount for Each Item of Consolidated Compensation, etc.
Basic
Compensation
(￥Millions)
Performance-Based
Compensation
(￥Millions)
Stock
Compensation
(￥Millions)
Retirement
Benefit
(￥Millions)
Toshihiro Uchiyama
Adrian Browne
Steven Beckman
153
106
134
Director
Executive Officer
Executive Officer
CEO
NSK
NSK
NSK
NSK Americas, Inc.
7
43
90
71
–
35
11
22
–
66
4
4
–
–
–
37
NSK REPORT 2019
57
Activity Report (Actual and Forecast)
Interview with NSK’s Outside Directors
Hajime Bada
Akemi Mochizuki
Teruhiko Ikeda
Outside Director,
Independent Director
Outside Director,
Independent Director
Honorary Advisor of JFE Holdings, Inc.
Outside Director of Mitsui Chemicals, Inc.
External Auditor of Asagami Corporation
Certified Public Accountant
Employee of Akahoshi Audit Corporation
Outside Director of Tsumura & Co.
Outside Director,
Independent Director
Advisor of Mizuho Trust & Banking Co., Ltd.
NSK has been working on strengthening corporate governance since 1999. However, the governance
that shareholders and investors expect has changed since the establishment of Japan’s Corporate
Governance Code in 2015.
NSK has adopted a Company with Three Committees system as its form of corporate organization.
In this report, we asked the outside directors who are the chairpersons of the three committees to talk
about the role of outside directors, the operational status of the Board of Directors and committees, and
the issues that NSK faces.
Q1
Mr.
Ikeda
What do you think is expected of you as
an NSK outside director?
I believe that an important point in the Corporate
Governance Code is that outside directors are to
“appropriately represent the views of minority shareholders
and other stakeholders in the boardroom from a standpoint
independent of the management and controlling
shareholders.” I am conscious that the role required of
outside directors is that of a monitoring function in which
we supervise the management of the Company and assess
progress on management plans, acting as a spokesperson
for the diverse range of shareholders and other
stakeholders.
Accordingly, I keep two points in mind. The first is to
understand the actual situation of the Company from an
external viewpoint. I have been doing this for four years, and
I make an effort to visit plants, sales sites, technology
development centers, and other locations inside and outside
of Japan to hold discussions with employees on site and
learn about the actual circumstances of the Company to the
best of my ability. The second point is to ask questions and
share my opinions in Board of Directors meetings,
Mr.
Bada
committee meetings, and other meetings, always being
conscious of maintaining an external point of view. I state
my opinions and ask questions being mindful to keep a
balanced partnership with upper management that is
based on a healthy tension and mutual trust.
I was appointed as an NSK outside director just last year.
Outside directors are required to work to understand
meeting discussion items as comprehensively as possible
and engage in the dialogue, even if they have no practical
experience with the topic. Furthermore, it is necessary for
outside directors to state their opinions as a third party
based on their own experience.
NSK has adopted a Company with Three Committees
structure, and has five outside directors at present, each
of whom comes from a different parent organization.
I believe that it is extremely beneficial that we have
differing fields of expertise and have led different careers
up until now. The backbone of my experience lies in the
manufacturing industry and engineering, as well as
corporate management. I feel that my role is to use that
experience to make suggestions and provide guidance
from my unique perspective.
Ms.
As a Certified Public Accountant, my career has been
Mochizuki
focused in financial auditing. I think I have accumulated
knowledge of corporations and developed my ability to
understand a company’s situation through studying the
figures in financial statements and the status of internal
controls over the years. I believe that kind of valuable
experience and perspective is expected of an outside
director.
I have seen all sorts of companies, but this is actually
my first time with a component manufacturer like NSK. To
be honest, the impression I was left with after this year is
how different a company is when you are looking at it from
the inside as opposed to the outside. Moving forward, I
would like to gain a little more understanding of internal
activities and thought processes, and delve in even deeper
while still maintaining an outside perspective to make
contributions that prevent issues from arising within the
company itself, or from changes in the environment that
surrounds it.
Q2
Mr.
Ikeda
Ms.
Mochizuki
NSK has long adopted a Company with
Three Committees governance structure.
What are some of the strengths of this
structure, and what should be improved?
NSK introduced the executive officer system in 1999. At that
time, the Company invited directors from outside the
company onto its board, and voluntarily established the
Compensation Committee. I believe NSK is a cutting-edge
Japanese company that is highly conscious of corporate
governance reform, having adopted a Company with Three
Committees structure in 2004.
Nevertheless, I think that NSK still has challenges left
to face. The Board of Directors has both a management and
a monitoring function, and despite having adopted a
Company with Three Committees structure, NSK’s approach
is to place an importance on the management function in
order for the Board of Directors to operate effectively.
Accordingly, the heads of functional division headquarters
and business division headquarters are on the Board.
However, if NSK is to further strengthen the monitoring
function of the Board of Directors moving forward, I think
that the structure, namely the ratio of internal to outside
directors, as well as the qualifications and expertise required
of those directors, will have to change. Furthermore, the CEO
is currently acting as the chairperson of the Board of
Directors, which will also present a challenge.
One thing that I have felt particularly strongly about this year
has been the challenges related to global governance.
Although I believe that this is a weak point for many
Japanese companies, a company’s approach to the foreign
market is extremely important. To that effect, I think that
NSK still has underdeveloped areas in employee
development and personnel distribution, as well as the
systems and processes necessary to exercise control globally
across all Group companies. NSK has to shift its focus
globally while revising its current structures, systems, and
processes. However, I think it is also necessary to focus on
personnel training and development to increase everyone’s
level of experience.
Mr.
Bada
This is my first experience with a Company with Three
Committees structure. Shortly after being appointed as an
outside director, I attended the International Management
Committee (IMC) meeting for two days. There, I felt that
I am conscious that the role required of
outside directors is that of a monitoring
function in which we supervise the
management of the Company and assess
progress on management plans, acting as a
spokesperson for the diverse range of
shareholders and other stakeholders.
discussions were conducted very openly and also
included the opinions of regional entities.
The requirements of external standards including
the Corporate Governance Code grow stricter year by
year, but NSK has been commended as a pioneer among
its competitors for its efforts to conform to them. When
considering whether governance can be resolutely
achieved simply by putting standards in place, we
understand that this is not necessarily the case,
considering recent corporate scandals. I think that the
elements not written into laws or rules, such as a sense
of ethics, good faith, and confidence, are important.
What concerns me in that regard is the disparity in
the level of employee engagement on the production
shop floor and at Group companies, as evidenced by the
results of the Employee Awareness Survey. I think that
embedding governance across all companies and all
Groups is a challenge for NSK. Discussions at Board of
Directors meetings are just the start―in the end, the
real question is to what extent does the NSK Group as a
whole understand this challenge, and can it properly
engage with it.
Q3
Concerning the effectiveness of the Board of
Directors, it has been mentioned that a
monitoring and checking function is needed.
Please comment on how information is
communicated and how items are discussed
in Board of Directors meetings.
Mr.
Ikeda
Explanations of the current situation of the Company
given prior to Board of Directors meetings and each
committee meeting are carried out very thoroughly. I have
experience as an outside director and outside auditor
with a number of companies, but communication at NSK
has been the most thorough and detailed. In addition,
opportunities are also created for the Board to visit plants
and other locations in order to learn about the actual
circumstances of business operations. I have been to the
majority of NSK plants in Japan, as well as plants, sales
58
NSK REPORT 2019
NSK REPORT 2019
59
sites, warehouses, and other locations in China, ASEAN and
South Korea where I was able to have discussions with
employees at actual business sites.
As the Board of Directors is a group of people who
possess a wide range of experience and knowledge, all manner
of opinions are brought forth during meetings, creating an open
and lively atmosphere. There are also times when topics have
been deferred to the next meeting because the discussion gets
heated and a conclusion cannot be reached.
I also think that we receive sufficient information. In my one
year as an outside director, I have felt that the variance analysis
of results against the annual plan, as well as discussions on
course correcting, have been conducted with considerable
depth. Strictly speaking about this one year, I feel that there
were few discussions on acquisition projects, large-scale
CAPEX projects, and future research and development projects.
I think that we need to increase such discussions related to the
future direction of the Company.
It is necessary to begin discussions on large-scale
projects and long-term technology development early on and
develop them because they take a long period of three to five
years from launch to completion. I would also like to further
expand discussions on whether NSK’s investment in
management resources concerning research and development
is appropriate compared to its competitors, and what kind of
resources are necessary moving forward.
Since I was originally engaged in financial auditing, I often
request site visits as a member of the Audit Committee. I am
able to go to regional subsidiaries and plants when I can work it
into my schedule, but I would like to have more in-depth
interactions and discussions with employees on the shop floor.
Although we have active discussions in Board of Directors
meetings, I think that there is a common pattern in which the
internal directors end up having to give a lot of explanations in
response to questions from the outside directors. I want to
know what kind of discussions the people actually carrying out
the work at actual business sites are having, and to what extent
discussion takes place internally prior to something being
raised as an item to be discussed or reported in Board of
Directors meetings.
Activity Report (Actual and Forecast)
Interview with NSK’s Outside Directors
Hajime Bada
Akemi Mochizuki
Teruhiko Ikeda
Outside Director,
Independent Director
Outside Director,
Independent Director
Honorary Advisor of JFE Holdings, Inc.
Outside Director of Mitsui Chemicals, Inc.
External Auditor of Asagami Corporation
Certified Public Accountant
Employee of Akahoshi Audit Corporation
Outside Director of Tsumura & Co.
Outside Director,
Independent Director
Advisor of Mizuho Trust & Banking Co., Ltd.
NSK has been working on strengthening corporate governance since 1999. However, the governance
that shareholders and investors expect has changed since the establishment of Japan’s Corporate
Governance Code in 2015.
NSK has adopted a Company with Three Committees system as its form of corporate organization.
In this report, we asked the outside directors who are the chairpersons of the three committees to talk
about the role of outside directors, the operational status of the Board of Directors and committees, and
the issues that NSK faces.
What do you think is expected of you as
Q1
an NSK outside director?
Mr.
Ikeda
I believe that an important point in the Corporate
Governance Code is that outside directors are to
committee meetings, and other meetings, always being
conscious of maintaining an external point of view. I state
my opinions and ask questions being mindful to keep a
balanced partnership with upper management that is
based on a healthy tension and mutual trust.
“appropriately represent the views of minority shareholders
and other stakeholders in the boardroom from a standpoint
independent of the management and controlling
shareholders.” I am conscious that the role required of
outside directors is that of a monitoring function in which
we supervise the management of the Company and assess
progress on management plans, acting as a spokesperson
for the diverse range of shareholders and other
stakeholders.
Accordingly, I keep two points in mind. The first is to
understand the actual situation of the Company from an
external viewpoint. I have been doing this for four years, and
I make an effort to visit plants, sales sites, technology
development centers, and other locations inside and outside
of Japan to hold discussions with employees on site and
learn about the actual circumstances of the Company to the
best of my ability. The second point is to ask questions and
share my opinions in Board of Directors meetings,
Mr.
Bada
I was appointed as an NSK outside director just last year.
Outside directors are required to work to understand
meeting discussion items as comprehensively as possible
and engage in the dialogue, even if they have no practical
experience with the topic. Furthermore, it is necessary for
outside directors to state their opinions as a third party
based on their own experience.
NSK has adopted a Company with Three Committees
structure, and has five outside directors at present, each
of whom comes from a different parent organization.
I believe that it is extremely beneficial that we have
differing fields of expertise and have led different careers
up until now. The backbone of my experience lies in the
manufacturing industry and engineering, as well as
corporate management. I feel that my role is to use that
experience to make suggestions and provide guidance
from my unique perspective.
Ms.
Mochizuki
As a Certified Public Accountant, my career has been
focused in financial auditing. I think I have accumulated
knowledge of corporations and developed my ability to
understand a company’s situation through studying the
figures in financial statements and the status of internal
controls over the years. I believe that kind of valuable
experience and perspective is expected of an outside
director.
I have seen all sorts of companies, but this is actually
my first time with a component manufacturer like NSK. To
be honest, the impression I was left with after this year is
how different a company is when you are looking at it from
the inside as opposed to the outside. Moving forward, I
would like to gain a little more understanding of internal
activities and thought processes, and delve in even deeper
while still maintaining an outside perspective to make
contributions that prevent issues from arising within the
company itself, or from changes in the environment that
surrounds it.
Q2
Mr.
Ikeda
Ms.
Mochizuki
NSK has long adopted a Company with
Three Committees governance structure.
What are some of the strengths of this
structure, and what should be improved?
NSK introduced the executive officer system in 1999. At that
time, the Company invited directors from outside the
company onto its board, and voluntarily established the
Compensation Committee. I believe NSK is a cutting-edge
Japanese company that is highly conscious of corporate
governance reform, having adopted a Company with Three
Committees structure in 2004.
Nevertheless, I think that NSK still has challenges left
to face. The Board of Directors has both a management and
a monitoring function, and despite having adopted a
Company with Three Committees structure, NSK’s approach
is to place an importance on the management function in
order for the Board of Directors to operate effectively.
Accordingly, the heads of functional division headquarters
and business division headquarters are on the Board.
However, if NSK is to further strengthen the monitoring
function of the Board of Directors moving forward, I think
that the structure, namely the ratio of internal to outside
directors, as well as the qualifications and expertise required
of those directors, will have to change. Furthermore, the CEO
is currently acting as the chairperson of the Board of
Directors, which will also present a challenge.
One thing that I have felt particularly strongly about this year
has been the challenges related to global governance.
Although I believe that this is a weak point for many
Japanese companies, a company’s approach to the foreign
market is extremely important. To that effect, I think that
NSK still has underdeveloped areas in employee
development and personnel distribution, as well as the
systems and processes necessary to exercise control globally
across all Group companies. NSK has to shift its focus
globally while revising its current structures, systems, and
processes. However, I think it is also necessary to focus on
personnel training and development to increase everyone’s
level of experience.
Mr.
Bada
This is my first experience with a Company with Three
Committees structure. Shortly after being appointed as an
outside director, I attended the International Management
Committee (IMC) meeting for two days. There, I felt that
I am conscious that the role required of
outside directors is that of a monitoring
function in which we supervise the
management of the Company and assess
progress on management plans, acting as a
spokesperson for the diverse range of
shareholders and other stakeholders.
discussions were conducted very openly and also
included the opinions of regional entities.
The requirements of external standards including
the Corporate Governance Code grow stricter year by
year, but NSK has been commended as a pioneer among
its competitors for its efforts to conform to them. When
considering whether governance can be resolutely
achieved simply by putting standards in place, we
understand that this is not necessarily the case,
considering recent corporate scandals. I think that the
elements not written into laws or rules, such as a sense
of ethics, good faith, and confidence, are important.
What concerns me in that regard is the disparity in
the level of employee engagement on the production
shop floor and at Group companies, as evidenced by the
results of the Employee Awareness Survey. I think that
embedding governance across all companies and all
Groups is a challenge for NSK. Discussions at Board of
Directors meetings are just the start―in the end, the
real question is to what extent does the NSK Group as a
whole understand this challenge, and can it properly
engage with it.
Q3
Mr.
Ikeda
Concerning the effectiveness of the Board of
Directors, it has been mentioned that a
monitoring and checking function is needed.
Please comment on how information is
communicated and how items are discussed
in Board of Directors meetings.
Explanations of the current situation of the Company
given prior to Board of Directors meetings and each
committee meeting are carried out very thoroughly. I have
experience as an outside director and outside auditor
with a number of companies, but communication at NSK
has been the most thorough and detailed. In addition,
opportunities are also created for the Board to visit plants
and other locations in order to learn about the actual
circumstances of business operations. I have been to the
majority of NSK plants in Japan, as well as plants, sales
58
NSK REPORT 2019
NSK REPORT 2019
59
sites, warehouses, and other locations in China, ASEAN and
South Korea where I was able to have discussions with
employees at actual business sites.
As the Board of Directors is a group of people who
possess a wide range of experience and knowledge, all manner
of opinions are brought forth during meetings, creating an open
and lively atmosphere. There are also times when topics have
been deferred to the next meeting because the discussion gets
heated and a conclusion cannot be reached.
I also think that we receive sufficient information. In my one
year as an outside director, I have felt that the variance analysis
of results against the annual plan, as well as discussions on
course correcting, have been conducted with considerable
depth. Strictly speaking about this one year, I feel that there
were few discussions on acquisition projects, large-scale
CAPEX projects, and future research and development projects.
I think that we need to increase such discussions related to the
future direction of the Company.
It is necessary to begin discussions on large-scale
projects and long-term technology development early on and
develop them because they take a long period of three to five
years from launch to completion. I would also like to further
expand discussions on whether NSK’s investment in
management resources concerning research and development
is appropriate compared to its competitors, and what kind of
resources are necessary moving forward.
Since I was originally engaged in financial auditing, I often
request site visits as a member of the Audit Committee. I am
able to go to regional subsidiaries and plants when I can work it
into my schedule, but I would like to have more in-depth
interactions and discussions with employees on the shop floor.
Although we have active discussions in Board of Directors
meetings, I think that there is a common pattern in which the
internal directors end up having to give a lot of explanations in
response to questions from the outside directors. I want to
know what kind of discussions the people actually carrying out
the work at actual business sites are having, and to what extent
discussion takes place internally prior to something being
raised as an item to be discussed or reported in Board of
Directors meetings.
Activity Report (Actual and Forecast)
Interview with NSK’s Outside Directors
sites, warehouses, and other locations in China, ASEAN and
South Korea where I was able to have discussions with
employees at actual business sites.
As the Board of Directors is a group of people who
possess a wide range of experience and knowledge, all manner
of opinions are brought forth during meetings, creating an open
and lively atmosphere. There are also times when topics have
been deferred to the next meeting because the discussion gets
heated and a conclusion cannot be reached.
Q4
Mr.
Bada
Mr.
Bada
Ms.
Mochizuki
I also think that we receive sufficient information. In my one
year as an outside director, I have felt that the variance analysis
of results against the annual plan, as well as discussions on
course correcting, have been conducted with considerable
depth. Strictly speaking about this one year, I feel that there
were few discussions on acquisition projects, large-scale
CAPEX projects, and future research and development projects.
I think that we need to increase such discussions related to the
future direction of the Company.
It is necessary to begin discussions on large-scale
projects and long-term technology development early on and
develop them because they take a long period of three to five
years from launch to completion. I would also like to further
expand discussions on whether NSK’s investment in
management resources concerning research and development
is appropriate compared to its competitors, and what kind of
resources are necessary moving forward.
Since I was originally engaged in financial auditing, I often
request site visits as a member of the Audit Committee. I am
able to go to regional subsidiaries and plants when I can work it
into my schedule, but I would like to have more in-depth
interactions and discussions with employees on the shop floor.
Although we have active discussions in Board of Directors
meetings, I think that there is a common pattern in which the
internal directors end up having to give a lot of explanations in
response to questions from the outside directors. I want to
know what kind of discussions the people actually carrying out
the work at actual business sites are having, and to what extent
discussion takes place internally prior to something being
raised as an item to be discussed or reported in Board of
Directors meetings.
Mr.
Ikeda
Ms.
Mochizuki
Please tell us about the activities being
carried out by the three committees.
An outside director has been appointed as the
chairperson of the Nomination Committee, which had
been a role taken on by the company president since last
year. The key task among the duties of the Nomination
Committee is to select the next company president and
directors. In addition to selection, discussions are held
on what kind of training and development should be
carried out for candidates. Education and training are
conducted systematically over a long period of
approximately 10 years.
Although outside directors can carry out individual
performance evaluations and career path monitoring,
I think it is difficult for us to judge an individual’s
qualifications or eligibility for a position. I think that
these are points to be thoroughly examined and judged
internally, particularly by the Company president. I think
that the validity of the selection process,
appropriateness of training, and equality of opportunity
should be carefully discussed in the Nomination
Committee.
The appointment and compensation of senior
management is said to be the most critical governance
function. I have been acting as the Chairperson of the
Compensation Committee for the past four years, and
launched a review of the executive compensation
program from the first year of my appointment. Three
years ago, we did away with retirement benefits and
stock options, and introduced a stock compensation
program, which is quite early on for a Japanese
company. Last fiscal year, in addition to further
enhancing the correlation between performance and
compensation, we reviewed the compensation program
to incorporate ESG metrics so that incentives are more
effective from this fiscal year. For example, CO2
emissions reduction targets by fiscal year and various
safety indicators are used as ESG metrics when
evaluating performance. Although NSK was already
pushing forward with ESG initiatives, we set KPIs and
began linking officers’ compensation to these to further
accelerate our efforts.
The Audit Committee has a full-time non-executive
director, which sets it apart from the other two
committees. In addition, the committee is supported by
the Internal Audit Department and receives monthly
reports on the status of internal risks and issues that
arise. We have meetings with members of the Internal
Audit Department twice a month to share and discuss
information. I don’t know about other companies, but
these meetings are quite frequent and productive.
Concerning risk management, the Audit Committee
receives information on risks earlier than other
committees, so a mechanism to share that information
with other directors may be necessary.
Explanations of the current situation of the Company
given prior to Board of Directors meetings and each
committee meeting are carried out very thoroughly. I have
experience as an outside director and outside auditor
with a number of companies, but communication at NSK
has been the most thorough and detailed. In addition,
opportunities are also created for the Board to visit plants
and other locations in order to learn about the actual
circumstances of business operations. I have been to the
majority of NSK plants in Japan, as well as plants, sales
The backbone of my experience lies in the
manufacturing industry and engineering,
as well as corporate management. I feel
that my role is to use that experience to
make suggestions and provide guidance
from my unique perspective.
60
NSK REPORT 2019
NSK REPORT 2019
61
Q5
In looking toward the next 100 years,
what efforts would you like to see NSK
undertake in areas such as business
growth and its contribution to society?
Mr.
Ikeda
100 years ago, NSK began as the first domestic producer
of bearings, and its progress on developing bearings and
other technology in related fields is what has brought
NSK to where is today. I do not think that will
fundamentally change. Perhaps moving forward NSK
will develop new business areas. To do so, further
cultivation of open innovation is essential.
NSK has actively pursued open innovation up until
now, but there is a need to accelerate these efforts.
People who can make that happen are vital. Personnel
development is crucial, and I think that when setting
one’s sights on the next 100 years, the key is how to be a
company that amasses skilled and capable personnel,
or how to develop such personnel. NSK should focus its
efforts on hiring and developing resources that have
foresight, a mind for innovation, and the potential for
growth.
Mr.
Bada
Nobody knows what it will be like 100 years from now,
but we can be certain that the world will change
significantly. Digital innovation such as AI and 5G has
already begun, and there is a possibility that the
business environment, the social structure, and social
norms will change substantially along with it. Society
and the corporate world will be required to anticipate
those changes, and creating new products will become
even more important than before in the manufacturing
industry.
Accordingly, open innovation and M&A are vital. To
expand business areas and develop new products ahead
of competitors, M&A and collaboration with appropriate
partners based on a careful selection process is
necessary, rather than going it alone.
I believe that diversity in human resources is also
crucial. It is not simply about race and gender, but the
Company must also be tolerant of diversity in ways of
thinking. As such, I think that the relationship between
individuals and the Company will have to change into
something a little more different than the family-like
relationship that has existed until now.
Ms.
Shifting perspectives, component manufacturers
Mochizuki
unfortunately find themselves in an extremely
unobtrusive position. But we should not get caught up
on that. If NSK becomes a company that is recognized as
offering value to the world through its bearings, I think
that the Company will change from being in the
spotlight. Good people will take an interest, and better
human resources will be attracted to the Company.
I would like the Company to be more open and let the
world know what NSK stands for, so that people will
think of it as an excellent company.
I believe that the experience and view of a
Certified Public Accountant is expected of an
outside director. I would like to delve in even
deeper while still maintaining an outside
perspective to make contributions that
prevent issues from arising within the
company itself, or from changes in the
environment that surrounds it.
Q6
Mr.
Bada
Please give us some final comments.
In this interview I deliberately emphasized NSK’s
weaknesses, but I do believe that it is a good company.
When asked what makes for a good company, I have
always answered: a company whose employees would
want their children to join it. I would like NSK to become
a company that is loved throughout the world by its
employees and customers.
Mr.
Ikeda
This is directed at NSK employees, but I believe that
NSK is very earnest company. When going around
business sites and holding discussions with employees,
I am impressed that there are so many sincere people
working diligently. However, in this rapidly changing
generation, that is not enough. I would like NSK to focus
more on the outside environment. If NSK does not
abandon its way of thinking with internal logic and
maintaining the status quo, it will not have a place in a
time of such dramatic environmental changes. I would
like each individual to consciously work to improve
themselves and pay attention to what is going on outside
the Company.
Ms.
Mochizuki
I have learned so many things being an outside director
at NSK, and I feel that it has been an extremely positive
experience in my career. I would be happy if the world
were to admire NSK. For that to happen, it would be
beneficial for employees to set their vision beyond the
confines of the Company and be more open.
Activity Report (Actual and Forecast)
Interview with NSK’s Outside Directors
sites, warehouses, and other locations in China, ASEAN and
South Korea where I was able to have discussions with
employees at actual business sites.
As the Board of Directors is a group of people who
possess a wide range of experience and knowledge, all manner
of opinions are brought forth during meetings, creating an open
and lively atmosphere. There are also times when topics have
been deferred to the next meeting because the discussion gets
heated and a conclusion cannot be reached.
Q4
Mr.
Bada
Mr.
Bada
I also think that we receive sufficient information. In my one
year as an outside director, I have felt that the variance analysis
of results against the annual plan, as well as discussions on
course correcting, have been conducted with considerable
depth. Strictly speaking about this one year, I feel that there
were few discussions on acquisition projects, large-scale
CAPEX projects, and future research and development projects.
I think that we need to increase such discussions related to the
future direction of the Company.
It is necessary to begin discussions on large-scale
projects and long-term technology development early on and
develop them because they take a long period of three to five
years from launch to completion. I would also like to further
expand discussions on whether NSK’s investment in
management resources concerning research and development
is appropriate compared to its competitors, and what kind of
resources are necessary moving forward.
Ms.
Since I was originally engaged in financial auditing, I often
Mochizuki
request site visits as a member of the Audit Committee. I am
able to go to regional subsidiaries and plants when I can work it
into my schedule, but I would like to have more in-depth
interactions and discussions with employees on the shop floor.
Although we have active discussions in Board of Directors
meetings, I think that there is a common pattern in which the
internal directors end up having to give a lot of explanations in
response to questions from the outside directors. I want to
know what kind of discussions the people actually carrying out
the work at actual business sites are having, and to what extent
discussion takes place internally prior to something being
raised as an item to be discussed or reported in Board of
Directors meetings.
Mr.
Ikeda
Please tell us about the activities being
carried out by the three committees.
An outside director has been appointed as the
chairperson of the Nomination Committee, which had
been a role taken on by the company president since last
year. The key task among the duties of the Nomination
Committee is to select the next company president and
directors. In addition to selection, discussions are held
on what kind of training and development should be
carried out for candidates. Education and training are
conducted systematically over a long period of
approximately 10 years.
Although outside directors can carry out individual
performance evaluations and career path monitoring,
I think it is difficult for us to judge an individual’s
qualifications or eligibility for a position. I think that
these are points to be thoroughly examined and judged
internally, particularly by the Company president. I think
that the validity of the selection process,
appropriateness of training, and equality of opportunity
should be carefully discussed in the Nomination
Committee.
The appointment and compensation of senior
management is said to be the most critical governance
function. I have been acting as the Chairperson of the
Compensation Committee for the past four years, and
launched a review of the executive compensation
program from the first year of my appointment. Three
years ago, we did away with retirement benefits and
stock options, and introduced a stock compensation
program, which is quite early on for a Japanese
company. Last fiscal year, in addition to further
enhancing the correlation between performance and
compensation, we reviewed the compensation program
to incorporate ESG metrics so that incentives are more
effective from this fiscal year. For example, CO2
emissions reduction targets by fiscal year and various
safety indicators are used as ESG metrics when
evaluating performance. Although NSK was already
pushing forward with ESG initiatives, we set KPIs and
began linking officers’ compensation to these to further
accelerate our efforts.
Ms.
The Audit Committee has a full-time non-executive
Mochizuki
director, which sets it apart from the other two
committees. In addition, the committee is supported by
the Internal Audit Department and receives monthly
reports on the status of internal risks and issues that
arise. We have meetings with members of the Internal
Audit Department twice a month to share and discuss
information. I don’t know about other companies, but
these meetings are quite frequent and productive.
Concerning risk management, the Audit Committee
receives information on risks earlier than other
committees, so a mechanism to share that information
with other directors may be necessary.
Q5
Mr.
Ikeda
Mr.
Bada
In looking toward the next 100 years,
what efforts would you like to see NSK
undertake in areas such as business
growth and its contribution to society?
100 years ago, NSK began as the first domestic producer
of bearings, and its progress on developing bearings and
other technology in related fields is what has brought
NSK to where is today. I do not think that will
fundamentally change. Perhaps moving forward NSK
will develop new business areas. To do so, further
cultivation of open innovation is essential.
NSK has actively pursued open innovation up until
now, but there is a need to accelerate these efforts.
People who can make that happen are vital. Personnel
development is crucial, and I think that when setting
one’s sights on the next 100 years, the key is how to be a
company that amasses skilled and capable personnel,
or how to develop such personnel. NSK should focus its
efforts on hiring and developing resources that have
foresight, a mind for innovation, and the potential for
growth.
Nobody knows what it will be like 100 years from now,
but we can be certain that the world will change
significantly. Digital innovation such as AI and 5G has
already begun, and there is a possibility that the
business environment, the social structure, and social
norms will change substantially along with it. Society
and the corporate world will be required to anticipate
those changes, and creating new products will become
even more important than before in the manufacturing
industry.
Accordingly, open innovation and M&A are vital. To
expand business areas and develop new products ahead
of competitors, M&A and collaboration with appropriate
partners based on a careful selection process is
necessary, rather than going it alone.
I believe that diversity in human resources is also
crucial. It is not simply about race and gender, but the
Company must also be tolerant of diversity in ways of
thinking. As such, I think that the relationship between
individuals and the Company will have to change into
something a little more different than the family-like
relationship that has existed until now.
Ms.
Mochizuki
Shifting perspectives, component manufacturers
unfortunately find themselves in an extremely
unobtrusive position. But we should not get caught up
on that. If NSK becomes a company that is recognized as
offering value to the world through its bearings, I think
that the Company will change from being in the
spotlight. Good people will take an interest, and better
human resources will be attracted to the Company.
I would like the Company to be more open and let the
world know what NSK stands for, so that people will
think of it as an excellent company.
I believe that the experience and view of a
Certified Public Accountant is expected of an
outside director. I would like to delve in even
deeper while still maintaining an outside
perspective to make contributions that
prevent issues from arising within the
company itself, or from changes in the
environment that surrounds it.
Q6
Mr.
Bada
Mr.
Ikeda
Please give us some final comments.
In this interview I deliberately emphasized NSK’s
weaknesses, but I do believe that it is a good company.
When asked what makes for a good company, I have
always answered: a company whose employees would
want their children to join it. I would like NSK to become
a company that is loved throughout the world by its
employees and customers.
This is directed at NSK employees, but I believe that
NSK is very earnest company. When going around
business sites and holding discussions with employees,
I am impressed that there are so many sincere people
working diligently. However, in this rapidly changing
generation, that is not enough. I would like NSK to focus
more on the outside environment. If NSK does not
abandon its way of thinking with internal logic and
maintaining the status quo, it will not have a place in a
time of such dramatic environmental changes. I would
like each individual to consciously work to improve
themselves and pay attention to what is going on outside
the Company.
Ms.
Mochizuki
I have learned so many things being an outside director
at NSK, and I feel that it has been an extremely positive
experience in my career. I would be happy if the world
were to admire NSK. For that to happen, it would be
beneficial for employees to set their vision beyond the
confines of the Company and be more open.
60
NSK REPORT 2019
NSK REPORT 2019
61
Explanations of the current situation of the Company
given prior to Board of Directors meetings and each
committee meeting are carried out very thoroughly. I have
experience as an outside director and outside auditor
with a number of companies, but communication at NSK
has been the most thorough and detailed. In addition,
opportunities are also created for the Board to visit plants
and other locations in order to learn about the actual
circumstances of business operations. I have been to the
majority of NSK plants in Japan, as well as plants, sales
The backbone of my experience lies in the
manufacturing industry and engineering,
as well as corporate management. I feel
that my role is to use that experience to
make suggestions and provide guidance
from my unique perspective.
Activity Report (Actual and Forecast)
Management
1 Toshihiro Uchiyama
N
2 Saimon Nogami
3 Shigeyuki Suzuki
4 Yasuhiro Kamio
11
9
7
8
10
12
Executive Officers and Group Officers
Director, Representative,
President and Chief Executive Officer
[Number of Shares Owned: 87,600]
Director, Representative,
Senior Executive Vice President,
Chief Financial Officer
[Number of Shares Owned: 48,600]
Director, Representative, Executive Vice President,
Head of Automotive Business Division Headquarters
[Number of Shares Owned: 56,400]
Director, Representative, Executive Vice President,
Head of Industrial Machinery Business Division Headquarters
[Number of Shares Owned: 78,000]
5 Akitoshi Ichii
C
6
Nobuo Goto
7
Toshihiko Enomoto
A
8 Teruhiko Ikeda
C
A
Director, Representative, Executive Vice President,
Responsible for Administrative Divisions,
Head of Corporate Planning Division Headquarters,
Responsible for Asia,
Responsible for Investor Relations Office
[Number of Shares Owned: 57,561]
Director, Executive Vice President,
Responsible for Technology Divisions,
Responsible for Quality Assurance Divisions,
Head of Technology Development Division Headquarters
[Number of Shares Owned: 21,200]
Director
[Number of Shares Owned: 18,816]
Outside Director,
Independent Director,
Advisor of Mizuho Trust & Banking Co., Ltd.
[Number of Shares Owned: －]
9 Hajime Bada
N
10 Akemi Mochizuki
A
11 Toshio Iwamoto
C
12 Yoshitaka Fujita
N
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: 1,400]
Outside Director,
Independent Director,
Certified Public Accountant,
Employee of Akahoshi Audit Corporation,
Outside Director of Tsumura & Co.
[Number of Shares Owned: 1,400]
Outside Director,
Independent Director,
Chief Corporate Adviser of NTT Data Corporation,
External Auditor of IHI Corporation
[Number of Shares Owned: －]
Outside Director,
Independent Director,
Executive Advisor of Murata Manufacturing Co., Ltd.
[Number of Shares Owned: 2,000]
62
NSK REPORT 2019
5
3
1
2
4
6
： N
Nomination
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 158th 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]
https://www2.tse.or.jp/disc/64710/140120190524435410.pdf
[Independent Directors/Auditors Notifications] (Japanese
https://www2.tse.or.jp/disc/64710/140120190524435390.pdf
2. Number of the Company’s shares owned as of March 31,
only)
2019
President and
Chief Executive Officer
Senior Executive
Vice President
Representative
Executive
Vice Presidents
Toshihiro Uchiyama
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Akitoshi Ichii
Executive
Vice Presidents
Masatada Fumoto
Nobuo Goto
Senior
Vice Presidents
Koji Inoue
Hiroya Miyazaki
Adrian Browne
Katsumi Kobayashi
Masami Shinomoto
Hiromasa Orito
Kenichi Yamana
Tomoyuki Yoshikiyo
Nobuaki Mitamura
Tatsuya Atarashi
Hideki Ochiai
Kunihiko Akashi
Vice Presidents
Masaru Takayama
Seiji Ijuin
Takashi Yamanouchi
Susumu Ishikawa
Guoping Yu
Hiroya Achiha
Keita Suzuki
Hayato Omi
Tamami Murata
Hiroyuki Tsugimoto
Larry Hagood
Jean-Charles Sanchez
Hisakazu Tadokoro
Narihito Otake
Hiromichi Takemura
Tatsufumi Soda
Ulrich Nass
Group Officers
Yoshinori Sugimoto
Seong-Il Jo
Minoru Arai
NSK REPORT 2019
63
Activity Report (Actual and Forecast)
Management
1 Toshihiro Uchiyama
N
2 Saimon Nogami
3 Shigeyuki Suzuki
4 Yasuhiro Kamio
11
9
7
8
10
12
Executive Officers and Group Officers
Director, Representative,
Director, Representative,
Director, Representative, Executive Vice President,
Director, Representative, Executive Vice President,
President and Chief Executive Officer
Senior Executive Vice President,
Head of Automotive Business Division Headquarters
Head of Industrial Machinery Business Division Headquarters
[Number of Shares Owned: 87,600]
Chief Financial Officer
[Number of Shares Owned: 56,400]
[Number of Shares Owned: 78,000]
[Number of Shares Owned: 48,600]
5 Akitoshi Ichii
C
6
Nobuo Goto
7
Toshihiko Enomoto
A
8 Teruhiko Ikeda
C
A
Director, Representative, Executive Vice President,
Director, Executive Vice President,
Director
Responsible for Administrative Divisions,
Responsible for Technology Divisions,
[Number of Shares Owned: 18,816]
Head of Corporate Planning Division Headquarters,
Responsible for Quality Assurance Divisions,
Responsible for Asia,
Head of Technology Development Division Headquarters
Responsible for Investor Relations Office
[Number of Shares Owned: 21,200]
[Number of Shares Owned: 57,561]
Outside Director,
Independent Director,
Advisor of Mizuho Trust & Banking Co., Ltd.
[Number of Shares Owned: －]
9 Hajime Bada
N
10 Akemi Mochizuki
A
11 Toshio Iwamoto
C
12 Yoshitaka Fujita
N
Outside Director,
Independent Director,
Outside Director,
Independent Director,
Outside Director,
Independent Director,
Outside Director,
Independent Director,
Honorary Adviser of JFE Holdings, Inc.,
Certified Public Accountant,
Chief Corporate Adviser of NTT Data Corporation,
Executive Advisor of Murata Manufacturing Co., Ltd.
Outside Director of Mitsui Chemicals, Inc.,
Employee of Akahoshi Audit Corporation,
External Auditor of IHI Corporation
[Number of Shares Owned: 2,000]
External Auditor of Asagami Corporation
Outside Director of Tsumura & Co.
[Number of Shares Owned: －]
[Number of Shares Owned: 1,400]
[Number of Shares Owned: 1,400]
62
NSK REPORT 2019
5
3
1
2
4
6
： N
Nomination
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 158th 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]
https://www2.tse.or.jp/disc/64710/140120190524435410.pdf
[Independent Directors/Auditors Notifications] (Japanese
only)
https://www2.tse.or.jp/disc/64710/140120190524435390.pdf
2. Number of the Company’s shares owned as of March 31,
2019
President and
Chief Executive Officer
Senior Executive
Vice President
Representative
Executive
Vice Presidents
Toshihiro Uchiyama
Saimon Nogami
Shigeyuki Suzuki
Yasuhiro Kamio
Akitoshi Ichii
Executive
Vice Presidents
Masatada Fumoto
Nobuo Goto
Senior
Vice Presidents
Koji Inoue
Hiroya Miyazaki
Adrian Browne
Katsumi Kobayashi
Masami Shinomoto
Hiromasa Orito
Kenichi Yamana
Tomoyuki Yoshikiyo
Nobuaki Mitamura
Tatsuya Atarashi
Hideki Ochiai
Kunihiko Akashi
Masaru Takayama
Seiji Ijuin
Takashi Yamanouchi
Susumu Ishikawa
Guoping Yu
Hiroya Achiha
Keita Suzuki
Hayato Omi
Tamami Murata
Hiroyuki Tsugimoto
Larry Hagood
Jean-Charles Sanchez
Hisakazu Tadokoro
Narihito Otake
Hiromichi Takemura
Tatsufumi Soda
Ulrich Nass
Seong-Il Jo
Yoshinori Sugimoto
Minoru Arai
NSK REPORT 2019
63
Vice Presidents
Group Officers
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)
2018
2019
131,283
217,200
143,052
1,953
1,006
16,848
129,965
195,288
159,517
1,696
3,502
17,648
Total current assets
511,346
507,618
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 2019
351,875
18,191
27,168
96,543
18,931
64,171
4,082
378,333
19,550
27,613
79,934
9,633
59,406
4,364
580,964
578,837
1,092,310
1,086,456
141,797
109,168
66
6,123
50,804
130,333
101,145
85
4,004
49,841
307,960
285,411
143,009
12,116
42,913
18,954
6,341
175,467
8,677
31,128
19,530
5,839
223,335
240,643
531,296
526,055
67,176
80,264
362,859
(17,815)
44,689
537,175
23,839
67,176
80,426
400,720
(37,779)
26,131
536,676
23,724
561,014
560,400
1,092,310
1,086,456
2018
1,020,338
788,052
(Millions of Yen)
2019
991,365
771,783
232,286
219,581
138,459
6,448
2,398
141,808
5,493
3,987
97,875
79,279
2,476
3,103
97,248
24,087
73,160
69,312
3,848
131.16
130.96
2,661
2,710
79,229
20,491
58,738
55,809
2,928
107.46
107.24
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
Year ended March 31,
Net income
Other comprehensive income
(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)
2018
2019
Before tax effect
Tax effect
Amount (net)
Before tax effect
Tax effect
Amount (net)
(Millions of Yen)
73,160
58,738
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
13,877
(2,815)
11,061
(4,423)
616
(3,807)
10,852
(2,572)
8,279
(9,276)
2,816
(6,460)
212
(57)
155
125
(49)
75
Total items that will not be reclassified to profit or loss
24,941
(5,445)
19,496
(13,575)
3,382
(10,192)
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
3,917
93
4,010
－
－
－
3,917
(4,731)
93
(20)
4,010
(4,751)
－
－
－
(4,731)
(20)
(4,751)
Total other comprehensive income
28,952
(5,445)
23,506
(18,326)
3,382
(14,944)
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Owners of the parent
Non-controlling interests
96,667
92,551
4,116
43,794
40,803
2,991
NSK REPORT 2019
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 2019
(Millions of Yen)
2018
2019
131,283
217,200
143,052
1,953
1,006
16,848
129,965
195,288
159,517
1,696
3,502
17,648
511,346
507,618
351,875
378,333
18,191
27,168
96,543
18,931
64,171
4,082
19,550
27,613
79,934
9,633
59,406
4,364
580,964
578,837
1,092,310
1,086,456
141,797
109,168
66
6,123
50,804
130,333
101,145
85
4,004
49,841
307,960
285,411
143,009
175,467
12,116
42,913
18,954
6,341
8,677
31,128
19,530
5,839
223,335
240,643
531,296
526,055
67,176
80,264
362,859
(17,815)
44,689
537,175
23,839
67,176
80,426
400,720
(37,779)
26,131
536,676
23,724
561,014
560,400
1,092,310
1,086,456
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)
2018
1,020,338
788,052
(Millions of Yen)
2019
991,365
771,783
232,286
219,581
138,459
6,448
2,398
141,808
5,493
3,987
97,875
79,279
2,476
3,103
97,248
24,087
73,160
69,312
3,848
131.16
130.96
2,661
2,710
79,229
20,491
58,738
55,809
2,928
107.46
107.24
Consolidated Statements of Comprehensive Income (IFRS)
Year ended March 31,
Net income
Other comprehensive income
2018
Tax effect
Before tax effect
Amount (net)
Before tax effect
73,160
(Millions of Yen)
2019
Tax effect
Amount (net)
58,738
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
13,877
(2,815)
11,061
(4,423)
616
(3,807)
10,852
(2,572)
8,279
(9,276)
2,816
(6,460)
212
(57)
155
125
(49)
75
Total items that will not be reclassified to profit or loss
24,941
(5,445)
19,496
(13,575)
3,382
(10,192)
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
3,917
93
4,010
－
－
－
3,917
(4,731)
93
(20)
4,010
(4,751)
－
－
－
(4,731)
(20)
(4,751)
Total other comprehensive income
28,952
(5,445)
23,506
(18,326)
3,382
(14,944)
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Owners of the parent
Non-controlling interests
96,667
92,551
4,116
43,794
40,803
2,991
NSK REPORT 2019
65
Data Section
Consolidated Statements of Changes in Equity (IFRS)
Consolidated Statements of Cash Flows (IFRS)
From April 1, 2017 to 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)
(Millions of Yen)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
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)
37,862
－
8,311
8,311
－
－
－
－
－
(2,589)
(2,589)
43,584
(2,290)
－
11,170
11,170
－
－
－
－
－
－
－
8,880
24,039
－
23,239
23,239
－
－
－
－
－
(2,589)
(2,589)
44,689
461,350
69,312
23,239
92,551
(11)
253
591
(17,452)
(122)
15
(16,726)
537,175
23,661
3,848
267
4,116
－
－
－
(3,231)
(706)
－
(3,938)
23,839
485,011
73,160
23,506
96,667
(11)
253
591
(20,684)
(828)
15
(20,664)
561,014
From April 1, 2018 to March 31, 2019
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
80,264
362,859
(17,815)
(Millions of Yen)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
21
375
－
(235)
－
161
55,809
－
55,809
－
－
－
(21,514)
－
3,565
(17,948)
67,176
80,426
400,720
－
－
－
(20,053)
89
－
－
－
－
(19,963)
(37,779)
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.
(7,774)
－
(4,823)
(4,823)
－
－
－
－
－
－
－
Closing balance
(12,598)
66
NSK REPORT 2019
43,584
－
(6,537)
(6,537)
－
－
－
－
－
(3,551)
(3,551)
33,494
8,880
－
(3,645)
44,689
－
(15,006)
537,175
55,809
(15,006)
(3,645)
(15,006)
40,803
－
－
－
－
－
－
－
5,234
－
－
－
－
－
(3,551)
(3,551)
26,131
(20,053)
111
375
(21,514)
(235)
14
(41,302)
536,676
23,839
2,928
62
2,991
－
－
－
(2,816)
(290)
－
(3,106)
23,724
561,014
58,738
(14,944)
43,794
(20,053)
111
375
(24,330)
(525)
14
(44,408)
560,400
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
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
Acquisition of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
(Millions of Yen)
2018
2019
97,248
46,785
(985)
(2,329)
2,978
(6,448)
(12,464)
(10,382)
(11,116)
(2,957)
79,229
48,801
621
(2,368)
2,600
(5,493)
18,602
(17,859)
(10,856)
(1,354)
100,328
111,924
5,174
(2,921)
(18,835)
7,484
(2,642)
(24,149)
83,746
92,617
(61,397)
(73,379)
386
(162)
16,941
(8,769)
1,090
(38)
6,829
(7,176)
(53,001)
(72,673)
12,000
(48,687)
20,000
(4)
(17,438)
(3,233)
(2,440)
34,333
(46,809)
40,000
(20,044)
(21,495)
(2,892)
(3,569)
Net cash used in financial activities
(39,804)
(20,477)
Effect of exchange rate changes on cash and cash equivalents
770
(784)
Net increase (decrease) in cash and cash equivalents
(8,289)
(1,318)
Cash and cash equivalents at beginning of the period
139,573
131,283
Cash and cash equivalents at end of the period
131,283
129,965
NSK REPORT 2019
67
67,176
80,264
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
Data Section
From April 1, 2017 to 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
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
－
－
－
－
－
－
－
From April 1, 2018 to March 31, 2019
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
(2,290)
－
11,170
11,170
－
－
－
－
－
－
－
24,039
－
23,239
23,239
(2,589)
(2,589)
44,689
Equity attributable to owners of the parent
Issued capital
Capital surplus
Retained earnings
Treasury shares
67,176
79,676
(17,937)
(Millions of Yen)
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
119
591
(122)
－
－
588
461,350
69,312
23,239
92,551
(17,452)
(11)
253
591
(122)
15
(16,726)
537,175
－
－
－
－
21
375
(235)
－
－
161
537,175
55,809
(15,006)
(20,053)
111
375
(21,514)
(235)
14
(41,302)
536,676
308,395
69,312
69,312
－
－
－
－
－
(17,452)
2,604
(14,848)
362,859
23,661
3,848
267
4,116
－
－
－
－
(3,231)
(706)
(3,938)
23,839
362,859
55,809
55,809
－
－
－
－
－
(21,514)
3,565
(17,948)
400,720
23,839
2,928
62
2,991
－
－
－
－
(2,816)
(290)
(3,106)
23,724
(11)
134
－
－
－
－
－
－
－
122
(17,815)
485,011
73,160
23,506
96,667
(20,684)
(11)
253
591
(828)
15
(20,664)
561,014
－
－
－
89
－
－
－
－
(20,053)
(19,963)
(37,779)
561,014
58,738
(14,944)
43,794
(20,053)
111
375
(24,330)
(525)
14
(44,408)
560,400
37,862
－
8,311
8,311
－
－
－
－
－
(2,589)
(2,589)
43,584
43,584
－
(6,537)
(6,537)
－
－
－
－
－
(3,551)
(3,551)
33,494
67,176
80,426
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.
66
NSK REPORT 2019
(7,774)
－
(4,823)
(4,823)
－
－
－
－
－
－
－
Closing balance
(12,598)
5,234
8,880
－
(3,645)
44,689
－
(15,006)
(3,645)
(15,006)
40,803
－
－
－
－
－
－
－
(3,551)
(3,551)
26,131
Closing balance
(7,774)
8,880
Equity attributable to owners of the parent
Issued capital
Capital surplus
Retained earnings
Treasury shares
67,176
80,264
(17,815)
(Millions of Yen)
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
Acquisition of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
(Millions of Yen)
2018
2019
97,248
46,785
(985)
(2,329)
2,978
(6,448)
(12,464)
(10,382)
(11,116)
(2,957)
79,229
48,801
621
(2,368)
2,600
(5,493)
18,602
(17,859)
(10,856)
(1,354)
100,328
111,924
5,174
(2,921)
(18,835)
7,484
(2,642)
(24,149)
83,746
92,617
(61,397)
386
(162)
16,941
(8,769)
(73,379)
1,090
(38)
6,829
(7,176)
(53,001)
(72,673)
12,000
(48,687)
20,000
(4)
(17,438)
(3,233)
(2,440)
34,333
(46,809)
40,000
(20,044)
(21,495)
(2,892)
(3,569)
Net cash used in financial activities
(39,804)
(20,477)
Effect of exchange rate changes on cash and cash equivalents
770
(784)
Net increase (decrease) in cash and cash equivalents
(8,289)
(1,318)
Cash and cash equivalents at beginning of the period
139,573
131,283
Cash and cash equivalents at end of the period
131,283
129,965
NSK REPORT 2019
67
Data Section
Management’s Discussion and Analysis of Financial Position,
Results of Operations and Cash Flows
Overview of the Year Ended March 31, 2019
Looking at global economic conditions during the year
ended March 31, 2019, the Japanese economy continued
its gradual growth due to solid capital expenditure and a
favorable employment environment. However, this
expansion lacked strength due to the impact of a
slowdown in the overseas economy during the second
half of the fiscal year under review. In the US, economic
growth continued due to increases in capital expenditure
and individual consumption, although signs of a
slowdown have recently begun to emerge. In Europe,
although consumer spending remained strong in the
Eurozone, economic growth slowed due to confusion
surrounding the UK’s withdrawal from the European
Union as well as a decrease in vehicle production due to
new exhaust gas emission testing methods (WLTP).
In China, economic growth slowed against the backdrop
of increased trade friction with the US, with weaker
capital expenditure and consumer spending, and vehicle
production volume falling below the previous year’s
level. In other Asian countries, economic growth slowed,
reflecting the weakness in the global economy.
In this economic environment, consolidated sales
for the year ended March 31, 2019 totaled ¥991,365
million, a year-on-year decrease of 2.8%, and operating
income totaled ¥79,279 million, a year-on-year decrease
of 19.0%. Income before income taxes was ¥79,229
million, a year-on-year decrease of 18.5%. Net income
attributable to owners of the parent was ¥55,809 million,
a year-on-year decrease of 19.5%.
Business Segment Information
Details regarding the market environment and results by business segment are as follows.
Industrial Machinery Business segment
Automotive Business segment
Overall sales in the industrial machinery business
increased year on year as strong demand for the
Company’s products continued through to the end of the
first half of the fiscal year due to increased capital
expenditure related to IoT, automation, and labor-saving.
Although demand shifted to an adjustment phase in the
second half against the backdrop of a sluggish smartphone
market as well as slowdown in Chinese economy, the
Company was able to secure a year-on-year increase in
full-year sales in the industrial machinery business.
Looking at the segment’s results by geographic
breakdown, sales in Japan increased, primarily in the
aftermarket sector, despite the negative impact of a
slowdown in the smartphone-related market. In the
Americas, despite strong demand from sectors including
medical equipment, sales declined due to depreciation of
emerging countries’ currencies, including the Brazilian
real. Sales in Europe decreased due to a decline in the
electrical sector, including home appliances, although
sales in the wind power sector rose. In China, sales grew
due to an increase in the aftermarket, wind power and
machine tool sectors, despite weaker sales in the electrical
sector, including electric tools and motors. In other Asian
countries sales increased, primarily in India.
As a result, sales in the industrial machinery business
totaled ¥269,974 million, a year-on-year increase of 1.4%.
Operating income was ¥32,887 million, a year-on-year
increase of 16.1%.
Looking ahead, the industrial machinery business
segment will continue to address changing trends in
demand in a flexible and agile manner. As social needs
across a wide range of fields, beginning with IoT as well as
robotics and renewal energy, expand, NSK will endeavor to
enhance its presence within the market over the medium
and long term and expand its business commensurate with
revenues by building a foundation that is capable of
adapting to these growth fields.
Analysis of Financial Position
Despite an increase in sales of products for the
automatic transmission (AT) systems and needle
bearings, overall sales in the automotive business
declined year on year due to lower sales of electric
power steering (EPS) systems resulting from vehicle
model changes as well as a slowdown in the Chinese
and European automotive markets.
Looking at the segment’s results by geographic
breakdown, sales in Japan decreased due to lower sales
in the EPS business despite robust sales of products for
AT systems. In the Americas, sales increased mainly due
to solid sales of products for AT systems. In Europe,
sales decreased due to lower vehicle production
stemming from new exhaust gas emission testing
methods (WLTP). Sales in China decreased due to a
reactionary decline from special tax incentives for
compact cars which ended last year, as well as lower
EPS sales. In other Asian countries, overall sales
decreased due to the impact of exchange rate
fluctuations, although sales in India increased.
As a result, sales in the automotive business totaled
¥689,658 million, a year-on-year decrease of 4.7%.
Operating income totaled ¥44,949 million, a
year-on-year decrease of 31.9%.
In conjunction with efforts to expand its business
focusing mainly on AT-related products, which are
projected to experience an ongoing increase in demand,
the automotive business segment will work to secure
regrowth of the EPS business. Moreover, every effort will
be made to contribute to technological innovation in
automobiles in such areas as electrification and
autonomous driving through the use of existing
technologies nurtured over a long period and the
development of new technologies. In addition, this
business segment will strive to improve profitability by
increasing productivity and reducing fixed costs.
Total assets were ¥1,086,456 million, a decrease of
¥5,854 million compared to total assets as of March 31,
2018. The main reasons for this were decreases of
¥21,912 million in trade receivables and other
receivables and ¥16,608 million in other financial assets
(non-current), which offset an increase of ¥26,458
million in property, plant and equipment.
Total liabilities were ¥526,055 million, a decrease of
¥5,240 million compared to total liabilities as of March
31, 2018. The main reason for this was a decrease of
¥11,463 million in trade payables and other payables.
Total equity totaled ¥560,400 million, a decrease of ¥613
million compared to total equity as of March 31, 2018.
The main reasons for this decrease were ¥21,514 million
in cash dividends from retained earnings, ¥19,963
million in treasury shares and ¥18,558 million in other
components of equity, which offset ¥55,809 million in net
income attributable to owners of the parent.
Total current assets decreased ¥3,727 million
compared with the previous fiscal year-end, to ¥507,618
million. Total current liabilities decreased ¥22,548
million compared with the previous fiscal year-end to
¥285,411 million. As a result, the current ratio increased
from 1.66 times as of the previous fiscal year-end to 1.78
times. Gross interest-bearing debt increased ¥23,871
million compared with the end of the previous fiscal
year-end to ¥274,780 million. Net interest-bearing debt
(interest-bearing debt net of cash and cash equivalents)
was up ¥25,190 million compared with the previous
fiscal year-end to ¥144,814 million. The net D/E ratio
increased from 0.22 in the previous fiscal year to 0.27.
Equity per share attributable to owners of the parent
increased from ¥1,016.30 to ¥1,048.18. The equity ratio
attributable to owners of the parent increased from
49.2% as of the previous fiscal year-end to 49.4%.
Cash Flows
Total cash and cash equivalents at the end of the period under review were ¥129,965 million, a decrease of ¥1,318
million compared to total cash and cash equivalents as of March 31, 2018. Cash flows for the fiscal year under review
are presented as follows.
Net cash flow provided by operating activities
Net cash flow used in financing activities
Net cash flow provided by operating activities totaled
¥92,617 million, an increase of ¥8,870 million, compared
to the previous year. The main cash inflows were ¥79,229
million in income before income taxes, ¥48,801 million in
depreciation and amortisation, and ¥18,602 million in
decrease in trade receivables. Meanwhile, the main
outflows were ¥17,859 million in increase in inventories,
¥10,856 million in decrease in trade payables and
¥24,149 million in income tax paid.
Net cash flow used in financing activities totaled ¥20,477
million, a decrease of ¥19,327 million compared to the
previous year. The main cash inflows were ¥34,333
million in proceeds from long-term loans and ¥40,000
million in proceeds from issuance of corporate bonds.
Meanwhile, the main outflows were ¥46,809 million in
repayments of long-term loans, ¥20,044 million in
acquisition of treasury shares and ¥21,495 million in
dividends paid.
Net cash flow used in investing activities
Net cash flow used in investing activities totaled ¥72,673
million, an increase of ¥19,671 million compared to the
previous year. Net cash flow used in investing activities
includes ¥73,379 million in purchases of property, plant
and equipment.
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, 2019, the
outstanding balance of short-term loans was ¥58,637
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, 2019, the outstanding balance of long-term
loans and corporate bonds was ¥216,142 million, the
NSK Group Tax Policy
breakdown of which was loans from financial
institutions of ¥96,142 million and unsecured corporate
bonds of ¥120,000 million.
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.
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.
▶ https://www.nsk.com/investors/management/taxpolicy.html
68
NSK REPORT 2019
NSK REPORT 2019
69
Data Section
Management’s Discussion and Analysis of Financial Position,
Results of Operations and Cash Flows
Overview of the Year Ended March 31, 2019
Looking at global economic conditions during the year
ended March 31, 2019, the Japanese economy continued
its gradual growth due to solid capital expenditure and a
favorable employment environment. However, this
expansion lacked strength due to the impact of a
slowdown in the overseas economy during the second
half of the fiscal year under review. In the US, economic
growth continued due to increases in capital expenditure
and individual consumption, although signs of a
slowdown have recently begun to emerge. In Europe,
although consumer spending remained strong in the
Eurozone, economic growth slowed due to confusion
surrounding the UK’s withdrawal from the European
In China, economic growth slowed against the backdrop
of increased trade friction with the US, with weaker
capital expenditure and consumer spending, and vehicle
production volume falling below the previous year’s
level. In other Asian countries, economic growth slowed,
reflecting the weakness in the global economy.
In this economic environment, consolidated sales
for the year ended March 31, 2019 totaled ¥991,365
million, a year-on-year decrease of 2.8%, and operating
income totaled ¥79,279 million, a year-on-year decrease
of 19.0%. Income before income taxes was ¥79,229
million, a year-on-year decrease of 18.5%. Net income
attributable to owners of the parent was ¥55,809 million,
Union as well as a decrease in vehicle production due to
a year-on-year decrease of 19.5%.
new exhaust gas emission testing methods (WLTP).
Business Segment Information
Details regarding the market environment and results by business segment are as follows.
Industrial Machinery Business segment
Automotive Business segment
Overall sales in the industrial machinery business
increased year on year as strong demand for the
Company’s products continued through to the end of the
first half of the fiscal year due to increased capital
expenditure related to IoT, automation, and labor-saving.
Although demand shifted to an adjustment phase in the
Despite an increase in sales of products for the
automatic transmission (AT) systems and needle
bearings, overall sales in the automotive business
declined year on year due to lower sales of electric
power steering (EPS) systems resulting from vehicle
model changes as well as a slowdown in the Chinese
second half against the backdrop of a sluggish smartphone
and European automotive markets.
market as well as slowdown in Chinese economy, the
Company was able to secure a year-on-year increase in
full-year sales in the industrial machinery business.
Looking at the segment’s results by geographic
breakdown, sales in Japan increased, primarily in the
aftermarket sector, despite the negative impact of a
slowdown in the smartphone-related market. In the
Americas, despite strong demand from sectors including
medical equipment, sales declined due to depreciation of
emerging countries’ currencies, including the Brazilian
real. Sales in Europe decreased due to a decline in the
electrical sector, including home appliances, although
sales in the wind power sector rose. In China, sales grew
due to an increase in the aftermarket, wind power and
Looking at the segment’s results by geographic
breakdown, sales in Japan decreased due to lower sales
in the EPS business despite robust sales of products for
AT systems. In the Americas, sales increased mainly due
to solid sales of products for AT systems. In Europe,
sales decreased due to lower vehicle production
stemming from new exhaust gas emission testing
methods (WLTP). Sales in China decreased due to a
reactionary decline from special tax incentives for
compact cars which ended last year, as well as lower
EPS sales. In other Asian countries, overall sales
decreased due to the impact of exchange rate
fluctuations, although sales in India increased.
As a result, sales in the automotive business totaled
machine tool sectors, despite weaker sales in the electrical
sector, including electric tools and motors. In other Asian
¥689,658 million, a year-on-year decrease of 4.7%.
Operating income totaled ¥44,949 million, a
countries sales increased, primarily in India.
As a result, sales in the industrial machinery business
totaled ¥269,974 million, a year-on-year increase of 1.4%.
Operating income was ¥32,887 million, a year-on-year
increase of 16.1%.
Looking ahead, the industrial machinery business
segment will continue to address changing trends in
demand in a flexible and agile manner. As social needs
across a wide range of fields, beginning with IoT as well as
robotics and renewal energy, expand, NSK will endeavor to
enhance its presence within the market over the medium
year-on-year decrease of 31.9%.
In conjunction with efforts to expand its business
focusing mainly on AT-related products, which are
projected to experience an ongoing increase in demand,
the automotive business segment will work to secure
regrowth of the EPS business. Moreover, every effort will
be made to contribute to technological innovation in
automobiles in such areas as electrification and
autonomous driving through the use of existing
technologies nurtured over a long period and the
development of new technologies. In addition, this
and long term and expand its business commensurate with
business segment will strive to improve profitability by
revenues by building a foundation that is capable of
increasing productivity and reducing fixed costs.
adapting to these growth fields.
Analysis of Financial Position
Total assets were ¥1,086,456 million, a decrease of
¥21,912 million in trade receivables and other
¥5,854 million compared to total assets as of March 31,
receivables and ¥16,608 million in other financial assets
2018. The main reasons for this were decreases of
(non-current), which offset an increase of ¥26,458
million in property, plant and equipment.
Total liabilities were ¥526,055 million, a decrease of
¥5,240 million compared to total liabilities as of March
31, 2018. The main reason for this was a decrease of
¥11,463 million in trade payables and other payables.
Total equity totaled ¥560,400 million, a decrease of ¥613
million compared to total equity as of March 31, 2018.
The main reasons for this decrease were ¥21,514 million
in cash dividends from retained earnings, ¥19,963
million in treasury shares and ¥18,558 million in other
components of equity, which offset ¥55,809 million in net
income attributable to owners of the parent.
Total current assets decreased ¥3,727 million
compared with the previous fiscal year-end, to ¥507,618
million. Total current liabilities decreased ¥22,548
million compared with the previous fiscal year-end to
¥285,411 million. As a result, the current ratio increased
from 1.66 times as of the previous fiscal year-end to 1.78
times. Gross interest-bearing debt increased ¥23,871
million compared with the end of the previous fiscal
year-end to ¥274,780 million. Net interest-bearing debt
(interest-bearing debt net of cash and cash equivalents)
was up ¥25,190 million compared with the previous
fiscal year-end to ¥144,814 million. The net D/E ratio
increased from 0.22 in the previous fiscal year to 0.27.
Equity per share attributable to owners of the parent
increased from ¥1,016.30 to ¥1,048.18. The equity ratio
attributable to owners of the parent increased from
49.2% as of the previous fiscal year-end to 49.4%.
Cash Flows
Total cash and cash equivalents at the end of the period under review were ¥129,965 million, a decrease of ¥1,318
million compared to total cash and cash equivalents as of March 31, 2018. Cash flows for the fiscal year under review
are presented as follows.
Net cash flow provided by operating activities
Net cash flow used in financing activities
Net cash flow provided by operating activities totaled
¥92,617 million, an increase of ¥8,870 million, compared
to the previous year. The main cash inflows were ¥79,229
million in income before income taxes, ¥48,801 million in
depreciation and amortisation, and ¥18,602 million in
decrease in trade receivables. Meanwhile, the main
outflows were ¥17,859 million in increase in inventories,
¥10,856 million in decrease in trade payables and
¥24,149 million in income tax paid.
Net cash flow used in financing activities totaled ¥20,477
million, a decrease of ¥19,327 million compared to the
previous year. The main cash inflows were ¥34,333
million in proceeds from long-term loans and ¥40,000
million in proceeds from issuance of corporate bonds.
Meanwhile, the main outflows were ¥46,809 million in
repayments of long-term loans, ¥20,044 million in
acquisition of treasury shares and ¥21,495 million in
dividends paid.
Net cash flow used in investing activities
Net cash flow used in investing activities totaled ¥72,673
million, an increase of ¥19,671 million compared to the
previous year. Net cash flow used in investing activities
includes ¥73,379 million in purchases of property, plant
and equipment.
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, 2019, the
outstanding balance of short-term loans was ¥58,637
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, 2019, the outstanding balance of long-term
loans and corporate bonds was ¥216,142 million, the
NSK Group Tax Policy
breakdown of which was loans from financial
institutions of ¥96,142 million and unsecured corporate
bonds of ¥120,000 million.
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.
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.
▶ https://www.nsk.com/investors/management/taxpolicy.html
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Data Section
Basic Knowledge of 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.
Steel Balls: The World’s Roundest Balls
Introducing steel balls, one of the important components that make up the basic structure of bearings.
● Types of Steel Materials
● What Are Steel Balls?
As their name indicates, steel balls are balls made from steel. Generally,
the name refers to balls used in bearings and other products.
Technically, these balls are called steel balls for rolling bearings.
Bearings are rolling parts that are attached to the rotating parts of
machines; they comprise multiple steel balls inserted between a large
and small ring. Thanks to the steel balls, friction is reduced, enabling
the bearing to roll extremely smoothly. Steel balls simply need to be
round, hard, and tough. It is also essential that the steel balls inserted in
bearings are all of uniform excellence. Continuous research day and
night has enabled us to achieve the world’s roundest steel balls.
● Evaluation of Their Roundness
One index that evaluates the roundness of a ball is sphericity, as
prescribed under the Japanese Industrial Standards (JIS). General
bearing steel balls have a sphericity of 99.999%. Although it is
difficult to understand how round steel balls for bearings are in
numerical terms, all becomes obvious when they are compared with
pachinko balls (Japanese pinball), which look round in appearance.
(1 ring = 2μm)
Steel ball for
precision bearing
Pachinko ball
(Japanese pinball)
● Production Process: The general production process for steel balls is as follows
1
Heading
2
Flashing
3
Heat Treatment
4
Grinding
5
Lapping
6
Visual Inspection/Packing
Cut a wire short and mould into a ball with dies
Coil of wire
Dies
Remove bands by applying pressure to
the moulded balls
Casting plates
Heat treatment is used to create
the necessary hardness
and durability required
Adjust the dimensions of the steel balls and improve the surface roughness
Polishing machine
Moulded ball
Cut a wire to the required length to make one
steel ball, cold forge using a hemispherical
mould, and compress into a ball. The moulded
ball has a surplus protruding band generated
in the heading process.
We remove the protruding bands by
feeding the spherical balls into two
casting plates fitted with grooves and
then rotating the machine while
applying pressure.
Carrying out quenching and
tempering gives steel balls
sufficient strength and durability.
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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.
Various kinds of steel materials are used for steel balls, and the materials are selected according to the environments in which
they are to be used, such as load, rotation speed, and temperature. The main materials used for steel balls are as follows:
High-carbon chromium bearing steel
Stainless steel
Heat-resistant steel
This is the material that is widely and
generally used for bearings. Featuring
exceptional resistance to wear, this type of
steel supports the rotating parts of all
machines, including those in automobiles.
Featuring excellent corrosion resistance, this
Made of special heat-resistant material, this
material is mainly utilized for bearing steel balls
type of steel is mainly utilized in bearings
that will be used in corrosive environments.
Having many uses, stainless steel is used not
only for bearings but also valves.
exposed to high-temperature environments
of around 300℃, such as airplane jet engine
bearings.
● Balls Other Than Steel Balls
Balls other than steel balls are also used all around us as elemental components. There have a wide variety of uses,
including for bearings and ball-point pen nibs. There are many different uses, and just a few of them are listed below.
1
Ceramic balls
2
Carbide balls
Applications
Bearings and other products that require
high-speed rotation, such as machine
tools, etc.
Features
High strength and wear resistance even
at high temperatures
Applications
Used to fill the holes of carburetors for
motorcycles and cars
Features
Copper alloys with good electric and
thermal conductivities are used
Applications
Features
The tips of ball-point pens, etc., where
resistance to wear is required
Ball-point pens can be broadly divided into two
types, those that use oil- or water-based inks. Since the inks
used also come in a variety of colors, excellent quality in terms
of corrosion resistance and wettability for each ink is required.
Applications
Gas leak prevention valves for gas cocks, etc.
Features
Lightweight is the primary feature of nylon
balls. Their properties include low electric and thermal
conductivities and resistance to acids and alkalis.
3
Brass balls
4
Nylon balls
Feeding the prescribed
steel balls into two
polishing plates fitted
with grooves and then
rotating the machine
while applying
pressure removes the
oxide film that will
have formed during
heat treatment and
improves the precision
of the steel balls.
As in (4.), the steel balls are
fed into two polishing plates
fitted with grooves, which are
rotated while applying
pressure to improve the
precision of the steel balls.
In lapping, the quality of steel
balls is greatly affected by
the grindstone and polishing
oil used as well as by the
process conditions. The
optimization of the lapping
conditions is indispensable
in improving the precision of
the steel balls.
Steel balls produced by
means of the process
shown on the left are
packaged and shipped
following a visual
inspection process.
Data Section
Basic Knowledge of 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.
Steel Balls: The World’s Roundest Balls
Introducing steel balls, one of the important components that make up the basic structure of bearings.
● What Are Steel Balls?
As their name indicates, steel balls are balls made from steel. Generally,
the name refers to balls used in bearings and other products.
Technically, these balls are called steel balls for rolling bearings.
Bearings are rolling parts that are attached to the rotating parts of
machines; they comprise multiple steel balls inserted between a large
and small ring. Thanks to the steel balls, friction is reduced, enabling
the bearing to roll extremely smoothly. Steel balls simply need to be
round, hard, and tough. It is also essential that the steel balls inserted in
bearings are all of uniform excellence. Continuous research day and
night has enabled us to achieve the world’s roundest steel balls.
● Evaluation of Their Roundness
(1 ring = 2μm)
One index that evaluates the roundness of a ball is sphericity, as
prescribed under the Japanese Industrial Standards (JIS). General
bearing steel balls have a sphericity of 99.999%. Although it is
difficult to understand how round steel balls for bearings are in
numerical terms, all becomes obvious when they are compared with
pachinko balls (Japanese pinball), which look round in appearance.
● Production Process: The general production process for steel balls is as follows
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 Steel Materials
Various kinds of steel materials are used for steel balls, and the materials are selected according to the environments in which
they are to be used, such as load, rotation speed, and temperature. The main materials used for steel balls are as follows:
High-carbon chromium bearing steel
Stainless steel
Heat-resistant steel
This is the material that is widely and
generally used for bearings. Featuring
exceptional resistance to wear, this type of
steel supports the rotating parts of all
machines, including those in automobiles.
Featuring excellent corrosion resistance, this
material is mainly utilized for bearing steel balls
that will be used in corrosive environments.
Having many uses, stainless steel is used not
only for bearings but also valves.
Made of special heat-resistant material, this
type of steel is mainly utilized in bearings
exposed to high-temperature environments
of around 300℃, such as airplane jet engine
bearings.
● Balls Other Than Steel Balls
Balls other than steel balls are also used all around us as elemental components. There have a wide variety of uses,
including for bearings and ball-point pen nibs. There are many different uses, and just a few of them are listed below.
1
Ceramic balls
2
Carbide balls
Applications
Features
Bearings and other products that require
high-speed rotation, such as machine
tools, etc.
High strength and wear resistance even
at high temperatures
Applications
Features
The tips of ball-point pens, etc., where
resistance to wear is required
Ball-point pens can be broadly divided into two
types, those that use oil- or water-based inks. Since the inks
used also come in a variety of colors, excellent quality in terms
of corrosion resistance and wettability for each ink is required.
Steel ball for
precision bearing
Pachinko ball
(Japanese pinball)
Applications
Features
Used to fill the holes of carburetors for
motorcycles and cars
Copper alloys with good electric and
thermal conductivities are used
Applications
Gas leak prevention valves for gas cocks, etc.
Features
Lightweight is the primary feature of nylon
balls. Their properties include low electric and thermal
conductivities and resistance to acids and alkalis.
3
Brass balls
4
Nylon balls
1
Heading
2
Flashing
3
Heat Treatment
4
Grinding
5
Lapping
6
Visual Inspection/Packing
Cut a wire short and mould into a ball with dies
Remove bands by applying pressure to
Heat treatment is used to create
Coil of wire
Dies
the moulded balls
Casting plates
the necessary hardness
and durability required
Adjust the dimensions of the steel balls and improve the surface roughness
Polishing machine
Moulded ball
Cut a wire to the required length to make one
steel ball, cold forge using a hemispherical
mould, and compress into a ball. The moulded
ball has a surplus protruding band generated
in the heading process.
We remove the protruding bands by
feeding the spherical balls into two
casting plates fitted with grooves and
then rotating the machine while
applying pressure.
Carrying out quenching and
tempering gives steel balls
sufficient strength and durability.
Feeding the prescribed
steel balls into two
polishing plates fitted
with grooves and then
rotating the machine
while applying
pressure removes the
oxide film that will
have formed during
heat treatment and
improves the precision
of the steel balls.
As in (4.), the steel balls are
fed into two polishing plates
fitted with grooves, which are
rotated while applying
pressure to improve the
precision of the steel balls.
In lapping, the quality of steel
balls is greatly affected by
the grindstone and polishing
oil used as well as by the
process conditions. The
optimization of the lapping
conditions is indispensable
in improving the precision of
the steel balls.
Steel balls produced by
means of the process
shown on the left are
packaged and shipped
following a visual
inspection process.
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71
Data Section
Glossary
Term
Actuator
Aftermarket
AIP
Ball Screw
BCP
Big Data
BOD
Meaning
Term
Meaning
Actuators refer to mechanical components that, for example, play a role in the actuation of brakes and gear shifting of
automobiles.
Hub Unit Bearings
A hub unit bearing is a type of bearing that integrates the part attached to the vehicle body and the part called a hub,
to which the wheel is mounted. It supports the vehicle body while smoothly rotating the wheels.
Aftermarket refers to maintenance and repair demand. In NSK, aftermarket mainly means the demand and business for
repair and replacement.
IoT
AIP is an acronym for Asset Improvement Program. AIP is a service proposal program for stable operation and increased
reliability of production facilities that are important customer assets. This solutions service uses NSK’s expert technology
knowledge to analyze areas such as facilities, processes and work content, and then proposes optimal solutions for items
and content for which numerical improvement is possible, for example, cost reduction, improvement in operational
efficiency and reduction in the number of malfunctions.
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.
Big data is large-capacity digital data generated and stored in conjunction with the spread of the Internet, increased use of
the Internet and improvement in computer processing speed. By utilizing a huge amount of information, big data is
expected to create future business opportunities such as resolving social and economic problems and increasing the
added value of products and services. It is also necessary to create regulations and rules for the use of big data.
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. 46) 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.
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
CSR Procurement
Decarbonization
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 that 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 has a top-class record of column-type EPS in the world.
Minerals that lead to sources of funds for armed groups and antigovernment forces that violate human rights, the
procurement of which gives rise to concerns about complicity in conflicts. Under the U.S. Dodd-Frank Wall Street Reform
and Consumer Protection Act, companies listed on the U.S. market are obliged to investigate usage and disclose
information every year with regard to the four minerals (tin, tantalum, tungsten and gold) mined in the Democratic
Republic of Congo and adjoining countries.
CSR procurement refers to the procurement of raw materials and parts in consideration of compliance with laws and
regulations, environmental protection, human rights, occupational safety and health.
Society demands a reduction in the amount of fossil fuels used because the combustion of fossil fuels such as oil and coal
causes carbon to transform into greenhouse gases (e.g., CO2) causing global warming. Decarbonization is aimed at
moving away from the use of fossil fuels.
Direct Rate
Direct rate is the percentage of raw materials and parts injected into the production line that have been passed through
from the initial process to the final process to become a finished product.
ECU
EPS
5G
Friction
GAFA
GAM
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.
EPS stands for Electric Power Steering. An EPS is a mechanism that supports the driver in controlling automobile
steering wheels (enabling the turning of steering wheels with light force and providing driving assistance) 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.
5G stands for 5th Generation (5th generation mobile communication system). 5G is a next-generation wireless
communication system with faster speed, larger capacity, fewer delays and multiple connections when compared to the
current mainstream 4G technology. Moving forward, full-scale introduction of 5G is scheduled in each country and region.
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.
GAFA is an acronym for Google, Amazon, Facebook, Apple, the four main IT corporations based in the United States.
GAM is an acronym for Global After Market and refers to business for the after-sales market, which targets repair
demand. We have positioned GAM as an important measure in the Industrial Machinery Business of the 6th Mid-Term
Management Plan and are promoting global initiatives.
Green Procurement
Green procurement refers to the procurement of parts and raw materials in consideration of the environment. The NSK
Group has stipulated and complies with the NSK Group Green Procurement Standards
(http://www.nsk.com/sustainability/csrReport/supplemental/greenps.html).
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.
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.
Modern Slavery Act
The Modern Slavery Act has been established in the United Kingdom and Australia. The act was established to prevent
crimes such as human trafficking, forced labor and sexual exploitation.
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.
Among the different types of automobile 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, eight 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.
Open innovation consists of initiatives used to create innovative new merchandise (products), services or business models.
These innovations are based on a wide range of knowledge and technology integrated during the development of new
technologies and products. Specifically, a company performing open innovation combines the technologies, ideas and
know-how from other industries and fields such as other companies, universities, municipalities and social
entrepreneurs, in addition to its own.
Pawl-Type One-Way Clutch
A one-way clutch is a clutch mechanism that transmits rotational force in only one direction. One-way clutches are used
for automobile drive parts. The newly developed pawl-type one-way clutch has the following characteristics: 1) it can be
used in a non-lubricated environment, 2) it significantly reduces drag loss, 3) it is compact and light weight and 4) it
reduces backlash. The pawl-type one-way clutch is effective for running two-motor hybrid electric vehicles.
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 an epicylic gearing mechanism consisting of three elements̶sun gear, planetary gear and ring gear.
Powertrain describes the main components that generate power and deliver to the drive wheel in automobiles.
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 stands for Quality, Cost, Delivery, Development, Service and Management. The QCDDSM elements are generally
focused on by the manufacturing industry including NSK.
QC circles are an initiative related to Quality Control. QC circles are volunteer activities held in small groups aimed at
improving the quality of products, services and the workplace environment; reducing costs; increasing safety; etc.
Rack-type EPS (electric power steering) is a type of lower assist EPS. It is an EPS that assists tire direction movement with
a rack shaft in the steering gear section.
Smart Factory in this report refers to NSK’ｓ new concept factory. 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.
VA and VE are abbreviations for Value Analysis and Value Engineering, which are analytical methods and activities for
increasing the added value provided to customers. VA is related to all activities in the entire value chain from R&D to
after-sales service. VA activities consist of maximizing value by analyzing relationships between costs and the
improvement of functions and quality. VE is sometimes used as a similar term to VA. However, VE refers to engineering
methods for cost reduction through measures such as changing drawing/specifications and streamlining manufacturing
methods. In some cases, VA and VE are divided on a time line with VE designated as deciding on specifications before
mass production and VA as analysis/reform activities during and after mass production.
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 machine tools and semiconductor production equipment.
Mother Plant
Multistep AT
NIT
Open Innovation
Powertrain
PRTR Act
QCDDSM
QC Circle
Rack-Type EPS
(Rack Assist EPS)
Smart Factory
VA/VE
VOC
XY Table
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Data Section
Glossary
Term
Actuator
Aftermarket
AIP
Ball Screw
BCP
Big Data
BOD
AIP is an acronym for Asset Improvement Program. AIP is a service proposal program for stable operation and increased
reliability of production facilities that are important customer assets. This solutions service uses NSK’s expert technology
knowledge to analyze areas such as facilities, processes and work content, and then proposes optimal solutions for items
and content for which numerical improvement is possible, for example, cost reduction, improvement in operational
efficiency and reduction in the number of malfunctions.
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.
Big data is large-capacity digital data generated and stored in conjunction with the spread of the Internet, increased use of
the Internet and improvement in computer processing speed. By utilizing a huge amount of information, big data is
expected to create future business opportunities such as resolving social and economic problems and increasing the
added value of products and services. It is also necessary to create regulations and rules for the use of big data.
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. 46) 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.
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
CSR Procurement
Decarbonization
Column-type EPS is a type of Electric Power Steering that 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 has a top-class record of column-type EPS in the world.
Minerals that lead to sources of funds for armed groups and antigovernment forces that violate human rights, the
procurement of which gives rise to concerns about complicity in conflicts. Under the U.S. Dodd-Frank Wall Street Reform
and Consumer Protection Act, companies listed on the U.S. market are obliged to investigate usage and disclose
information every year with regard to the four minerals (tin, tantalum, tungsten and gold) mined in the Democratic
Republic of Congo and adjoining countries.
CSR procurement refers to the procurement of raw materials and parts in consideration of compliance with laws and
regulations, environmental protection, human rights, occupational safety and health.
Society demands a reduction in the amount of fossil fuels used because the combustion of fossil fuels such as oil and coal
causes carbon to transform into greenhouse gases (e.g., CO2) causing global warming. Decarbonization is aimed at
moving away from the use of fossil fuels.
Direct Rate
Direct rate is the percentage of raw materials and parts injected into the production line that have been passed through
from the initial process to the final process to become a finished product.
ECU
EPS
5G
Friction
GAFA
GAM
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.
EPS stands for Electric Power Steering. An EPS is a mechanism that supports the driver in controlling automobile
steering wheels (enabling the turning of steering wheels with light force and providing driving assistance) 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.
5G stands for 5th Generation (5th generation mobile communication system). 5G is a next-generation wireless
communication system with faster speed, larger capacity, fewer delays and multiple connections when compared to the
current mainstream 4G technology. Moving forward, full-scale introduction of 5G is scheduled in each country and region.
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.
GAFA is an acronym for Google, Amazon, Facebook, Apple, the four main IT corporations based in the United States.
GAM is an acronym for Global After Market and refers to business for the after-sales market, which targets repair
demand. We have positioned GAM as an important measure in the Industrial Machinery Business of the 6th Mid-Term
Management Plan and are promoting global initiatives.
Green Procurement
Green procurement refers to the procurement of parts and raw materials in consideration of the environment. The NSK
Group has stipulated and complies with the NSK Group Green Procurement Standards
(http://www.nsk.com/sustainability/csrReport/supplemental/greenps.html).
Meaning
automobiles.
Actuators refer to mechanical components that, for example, play a role in the actuation of brakes and gear shifting of
Hub Unit Bearings
A hub unit bearing is a type of bearing that integrates the part attached to the vehicle body and the part called a hub,
to which the wheel is mounted. It supports the vehicle body while smoothly rotating the wheels.
Aftermarket refers to maintenance and repair demand. In NSK, aftermarket mainly means the demand and business for
IoT
repair and replacement.
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.
Term
Meaning
Linear Guide
A linear guide is a machinery part that is used for the section to support the linear motion of machines. Linear guides are
one of the linear motion products and are used for machine tools, transfer machines and platform screen doors at
stations, etc.
Modern Slavery Act
The Modern Slavery Act has been established in the United Kingdom and Australia. The act was established to prevent
crimes such as human trafficking, forced labor and sexual exploitation.
Mother Plant
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.
Among the different types of automobile 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, eight 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
Open Innovation
NIT stands for NSK Institute of Technology, which is an internal educational institute for our engineers to master more
advanced technology.
Open innovation consists of initiatives used to create innovative new merchandise (products), services or business models.
These innovations are based on a wide range of knowledge and technology integrated during the development of new
technologies and products. Specifically, a company performing open innovation combines the technologies, ideas and
know-how from other industries and fields such as other companies, universities, municipalities and social
entrepreneurs, in addition to its own.
Pawl-Type One-Way Clutch
A one-way clutch is a clutch mechanism that transmits rotational force in only one direction. One-way clutches are used
for automobile drive parts. The newly developed pawl-type one-way clutch has the following characteristics: 1) it can be
used in a non-lubricated environment, 2) it significantly reduces drag loss, 3) it is compact and light weight and 4) it
reduces backlash. The pawl-type one-way clutch is effective for running two-motor hybrid electric vehicles.
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 an 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
QC Circle
Rack-Type EPS
(Rack Assist EPS)
Smart Factory
VA/VE
VOC
XY Table
QCDDSM stands for Quality, Cost, Delivery, Development, Service and Management. The QCDDSM elements are generally
focused on by the manufacturing industry including NSK.
QC circles are an initiative related to Quality Control. QC circles are volunteer activities held in small groups aimed at
improving the quality of products, services and the workplace environment; reducing costs; increasing safety; etc.
Rack-type EPS (electric power steering) is a type of lower assist EPS. It is an EPS that assists tire direction movement with
a rack shaft in the steering gear section.
Smart Factory in this report refers to NSK’ｓ new concept factory. 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.
VA and VE are abbreviations for Value Analysis and Value Engineering, which are analytical methods and activities for
increasing the added value provided to customers. VA is related to all activities in the entire value chain from R&D to
after-sales service. VA activities consist of maximizing value by analyzing relationships between costs and the
improvement of functions and quality. VE is sometimes used as a similar term to VA. However, VE refers to engineering
methods for cost reduction through measures such as changing drawing/specifications and streamlining manufacturing
methods. In some cases, VA and VE are divided on a time line with VE designated as deciding on specifications before
mass production and VA as analysis/reform activities during and after mass production.
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 machine tools and semiconductor production equipment.
72
NSK REPORT 2019
NSK REPORT 2019
73
Data Section
NSK Group
As of March 31, 2019
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-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%
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
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 (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.
Manufacture of 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, etc.
RANE NSK STEERING SYSTEMS PRIVATE LTD.
Manufacture and sales of automotive components
South Korea
NSK KOREA CO., LTD.
100.0% Manufacture and sales of automotive bearings, etc.
95.5%
100.0%
100.0%
100.0%
100.0%
85.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
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 2019
NSK REPORT 2019
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 March 31, 2019
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%
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.
INOUE JIKUUKE KOGYO CO., LTD.
NSK AMERICAS, INC.
NSK CORPORATION
NSK PRECISION AMERICA, INC.
NSK LATIN AMERICA, INC.
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
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.
THE AMERICAS
U.S.A.
Canada
Mexico
EUROPE
U.K.
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.
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.
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.
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 (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%
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
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.
Manufacture of 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, etc.
Manufacture and sales of automotive components
South Korea
NSK KOREA CO., LTD.
100.0% Manufacture and sales of automotive bearings, etc.
74
NSK REPORT 2019
NSK REPORT 2019
75
Data Section
Information for Investors / Company Data
As of March 31, 2019
Corporate Address
NSK Ltd.
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
Tokyo 141-8560, Japan
Tel: +81-3-3779-7111
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
E-mail: ir@nsk.com
NSK’s Website
▶ https://www.nsk.com/
Common Stock
Authorized: 1,700,000,000 shares
Issued: 551,268,104 shares
(including 36,735,014 shares of treasury stock)
Number of Shareholders
46,727
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan
Listing
Tokyo
Security Code
6471
Breakdown of Shareholders (%)
(by shareholder type)
1.81.8
1.71.7
3.73.7
3.63.6
6.76.7
8.7
10.2
9.7
10.9
28.5
24.2
25.3
24.1
9.2
2.22.2
9.2
3.33.3
8.9
8.7
2.42.4
1.71.7
3.53.5
13.7
18.1
8.2
49.6
51.6
50.1
50.9
49.9
Independent Verification Report
Independent Assurance Statement
Other Information Concerning the Company
2015
2016
2017
2018
2019
IR-Related Information
Please refer to the Company’s IR website for other IR
information including the latest news and detailed
financial data.
https://www.nsk.com/investors/
CSR-Related Information
Please refer to the Company’s CSR
website and Sustainability Report
(formerly the CSR Report) for more
details on CSR activities and other
related information.
https://www.nsk.com/sustainability/ Sustainability Report 2019
Key Question and Answers at Recent Meetings
Investors＞FAQ
https://www.nsk.com/investors/faq.html
NSK Report 2018 P. 61
https://www.nsk.com/investors/library/pdf/nsk_repo
rt/ir201803e.pdf
NSK used environmentally friendly paper and printing methods for this publication.
CAT. No. E8411 2018 B-10 Printed in Japan @NSK Ltd. 2018
■ Financial Institutions ■ Securities Companies
■ Other Japanese Corporations ■ Foreign Investors
■ Individuals / Others ■ Treasury Stock
(As of March 31)
NSK Report 2018
NSK issued its third integrated report, “NSK Report
2018” last year. This marked the third consecutive
year that NSK was recognized with the WICI Japan
Award for Excellence in Integrated Reporting.
N
S
K
R
E
P
O
R
T
2
0
1
8
NSK REPORT 2018
Year ended March 31, 2018
Integrated Report
NSK Report 2018
76
NSK REPORT 2019
Third-Party Assurances
To ensure the reliability and accuracy of NSK Report 2019 as an integrated report, NSK obtained
assurances from an external third party for the following data information described in this report.
Items Subject
to Assurance
● Lost-Worktime Injury
Frequency Rate
(P. 48)
● Energy Use (P. 46)
● Water Withdrawal
(P. 46)
● Greenhouse Gases
Emissions
(P. 46)
● Total Waste (P. 46)
● VOC Emissions (P. 46)
At the Time of Publishing the NSK Report 2019
The main topic covered in this
integrated report is that of
Furthermore, a section entitled
“Interviews with NSK’s Outside
delighted to hear your frank views
and any requests for future content.
sustainability (sustainable growth).
Directors” has been included to
Launched in May 2019, NSK’s
6th Mid-Term Management Plan is
an initiative designed to “establish a
corporate foundation for
sustainable growth” as our Vision
for 2026, the 110th anniversary of
the Company’s founding. In this
integrated report, we have
introduce some of NSK’s efforts to
improve the effectiveness of its
corporate governance.
This report was produced
primarily by the IR Office, which
worked in cooperation with many of
the departments involved and
edited the opinions expressed. As
enhanced the explanations about
the executive officer responsible for
NSK’s corporate foundation that is
IR and thus the creation of this
aimed to be achieved under the
Plan and our efforts to increase
sustainability.
report, I expressly stated that the
production process be valid and the
information contained herein be
accurate.
In addition, NSK’s business is
built on relationships of trust with
Looking to the future as well,
various stakeholders, and this
NSK will work to further enrich the
report describes these in detail on
NSK Report as an aid to dialogue
the pages devoted to “Creating
Value with Stakeholders.”
with stakeholders. By all means,
read through this report. I would be
Director, Representative
Executive Vice President
Responsible for Administrative Divisions
Head of Corporate Planning Division HQ
Responsible for Investor Relations Office
Akitoshi Ichii
NSK REPORT 2019
77
Information for Investors / Company Data
Data Section
As of March 31, 2019
Corporate Address
NSK Ltd.
Tokyo 141-8560, Japan
Tel: +81-3-3779-7111
Contact Information
IR Office, NSK Ltd.
Tokyo 141-8560, Japan
Tel: +81-3-5487-2564
E-mail: ir@nsk.com
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
For questions or additional information, please contact:
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,
NSK’s Website
▶ https://www.nsk.com/
Common Stock
Authorized: 1,700,000,000 shares
Issued: 551,268,104 shares
(including 36,735,014 shares of treasury stock)
Number of Shareholders
46,727
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan
Listing
Tokyo
Security Code
6471
Breakdown of Shareholders (%)
(by shareholder type)
1.81.8
1.71.7
3.73.7
3.63.6
6.76.7
8.7
10.2
9.7
10.9
28.5
24.2
25.3
24.1
9.2
2.22.2
9.2
3.33.3
8.9
8.7
2.42.4
1.71.7
3.53.5
13.7
18.1
8.2
Other Information Concerning the Company
2015
2016
2017
2018
2019
IR-Related Information
Please refer to the Company’s IR website for other IR
information including the latest news and detailed
financial data.
https://www.nsk.com/investors/
■ Financial Institutions ■ Securities Companies
■ Other Japanese Corporations ■ Foreign Investors
■ Individuals / Others ■ Treasury Stock
(As of March 31)
NSK Report 2018
NSK issued its third integrated report, “NSK Report
2018” last year. This marked the third 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 Sustainability Report
(formerly the CSR Report) for more
details on CSR activities and other
related information.
Key Question and Answers at Recent Meetings
Investors＞FAQ
https://www.nsk.com/investors/faq.html
NSK Report 2018 P. 61
https://www.nsk.com/sustainability/ Sustainability Report 2019
N
S
K
R
E
P
O
R
T
2
0
1
8
NSK REPORT 2018
Year ended March 31, 2018
Integrated Report
https://www.nsk.com/investors/library/pdf/nsk_repo
CAT. No. E8411 2018 B-10 Printed in Japan @NSK Ltd. 2018
NSK used environmentally friendly paper and printing methods for this publication.
rt/ir201803e.pdf
NSK Report 2018
76
NSK REPORT 2019
Third-Party Assurances
To ensure the reliability and accuracy of NSK Report 2019 as an integrated report, NSK obtained
assurances from an external third party for the following data information described in this report.
Items Subject
to Assurance
● Lost-Worktime Injury
Frequency Rate
(P. 48)
● Energy Use (P. 46)
● Water Withdrawal
(P. 46)
● Greenhouse Gases
Emissions
(P. 46)
● Total Waste (P. 46)
● VOC Emissions (P. 46)
49.6
51.6
50.1
50.9
49.9
Independent Verification Report
Independent Assurance Statement
At the Time of Publishing the NSK Report 2019
The main topic covered in this
integrated report is that of
sustainability (sustainable growth).
Launched in May 2019, NSK’s
6th Mid-Term Management Plan is
an initiative designed to “establish a
corporate foundation for
sustainable growth” as our Vision
for 2026, the 110th anniversary of
the Company’s founding. In this
integrated report, we have
enhanced the explanations about
NSK’s corporate foundation that is
aimed to be achieved under the
Plan and our efforts to increase
sustainability.
In addition, NSK’s business is
built on relationships of trust with
various stakeholders, and this
report describes these in detail on
the pages devoted to “Creating
Value with Stakeholders.”
Furthermore, a section entitled
“Interviews with NSK’s Outside
Directors” has been included to
introduce some of NSK’s efforts to
improve the effectiveness of its
corporate governance.
This report was produced
primarily by the IR Office, which
worked in cooperation with many of
the departments involved and
edited the opinions expressed. As
the executive officer responsible for
IR and thus 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
NSK Report as an aid to dialogue
with stakeholders. By all means,
read through this report. I would be
delighted to hear your frank views
and any requests for future content.
Director, Representative
Executive Vice President
Responsible for Administrative Divisions
Head of Corporate Planning Division HQ
Responsible for Investor Relations Office
Akitoshi Ichii
NSK REPORT 2019
77
N
S
K
R
E
P
O
R
T
2
0
1
9
NSK REPORT 2019
Year ended March 31, 2019
Integrated Report
NSK used environmentally friendly paper and printing methods for this publication.
CAT. No. E8412 2019 B-10 Printed in Japan @NSK Ltd. 2019
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