NSK REP ORT 2020
Year ended March 31, 2020
Integrated Report
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.
2
3
Management Principles
1
To provide our customers with
innovative and responsive solutions
through our world leading
technologies.
To provide challenges and
opportunities to our employees,
utilizing their skills and encouraging
their creativity and individuality.
To identify the needs of the present
and future, and to meet these
needs by being flexible, agile, and
dynamic.
To contribute to the communities
in which we operate.
To manage our business from
an international perspective
and to develop a strong
presence throughout the
world.
4
5
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 Collaborative Value Creation Process
NSK’s History: Foundation for Collaborative Value Creation ……… 02
NSK Supporting Society …………………………………………………… 04
To Our Stakeholders ………………………………………………………… 06
NSK’s Business Model for Collaborative Value Creation …………… 12
NSK’s Business Activities and Corporate Collaborative Value Creation
(Deepening of the Value Chain) ……………………………………………… 14
Creating Collaborative Value with Stakeholders ……………………… 16
Special Feature:
Collaborative Value Creation and Beyond ………………………… 18
(cid:12256)Declaration of NSK’s initiative 1
Smarter Maintenance with PM-Ai ………………………………… 19
(cid:12256)Declaration of NSK’s initiative 2・3
Minimize the Environmental Impact from Business Activities and
Maximize the Environmental Contribution through Products ……… 20
(cid:12256)Declaration of NSK’s initiative 4
Diversity and Inclusion Gaining Momentum with
the Advancement of Women in the Workplace …………………… 22
(cid:12256)Declaration of NSK’s initiative 5
Further Creating Collaborative Value through
Deeper Dialogues ………………………………………………………… 23
Strategies and Performance
Progress on Strategies for 2026 ………………………………………… 24
(cid:12256)New Initiatives Targeting Growth
Industrial Machinery Business …………………………………… 26
Automotive Business ………………………………………………… 28
(cid:12256)Enhance Managerial Resources …………………………………… 30
(cid:12256)Contribute to the Environment and Society ……………………… 31
Financial Strategy / Policy on Shareholder Returns ………………… 34
Financial and Non-Financial Highlights ………………………………… 36
Foundation Supporting Sustainability
Core Technologies and Taking Up the Challenge of
Creating New Collaborative Value …………………………………………… 42
Global Business Foundation ……………………………………………… 44
Interviews with Regional Management (China・Europe・The Americas) … 45
At a Glance
Foundation
Number of Employees
1916
30,747
(As of March 31, 2020)
(consolidated)
Sales Breakdown by Business Segment/ by Region (Based on Customer Location)
Automotive Business ¥573.8 billion
Industrial Machinery Business ¥232.5 billion
Other
3%
Other Asia
14%
Industrial Machinery
Bearings
23%
5%
Precision Machinery and
Parts
China
18%
Sales
¥831.0 billion
(Year ended March 31, 2020)
Japan
38%
Automotive
Components
Automotive
Bearings
31%
38%
Europe
13%
The Americas
17%
Market Share
Bearing sales (including industrial/automotive)
Share in Japan
Global share
No.1
No.3
Risk Management …………………………………………………… 48
Compliance …………………………………………………………… 50
Corporate Governance ……………………………………………… 51
Interview with NSK’s Outside Directors ………………………… 56
Dialogue with Shareholders and Investors …………………… 60
Management ………………………………………………………… 61
Data Section
Management’s Discussion and Analysis of
Financial Position, Results of Operations and Cash Flows …… 62
Consolidated Financial Statements ……………………………… 64
Basic Knowledge of Bearings …………………………………… 68
Glossary ………………………………………………………………… 70
NSK Group ……………………………………………………………… 72
Information for Investors / Company Data ……………………… 74
Third-Party Assurances …………………………………………… 75
Number of Global Sites
30 countries and regions worldwide
208 locations
(149 locations overseas)
6
Headquarters
64
Production sites
Sales sites
118
Representative offices 4
16
R&D centers
(As of March 31, 2020)
NSK Report 2020 Editorial Policy
The NSK Report 2020 is designed to provide readers with a deeper understanding of how the
Company works with stakeholders to create collaborative value that meets the expectations of the
world over the mid- to long-term based on its Motion & Control™ concept, and of the processes that
will achieve both social contribution and corporate development.
This Report provides a concise summary of all information deemed important in the Group’s efforts
to create collaborative 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 regarding corporate social
responsibility (CSR) can be found in the CSR section of our website
and in our Sustainability Report. In putting together this Report, we
referred to the International Integrated Reporting Framework of the
International Integrated Reporting Council (IIRC), the Environmental
Reporting Guidelines (2018) issued by Japan’s Ministry of the
Environment and 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 2020 dated September 30, 2020, 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 30, 2020. 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 2020
01
NSK’s Collaborative Value Creation Process
NSK’s History: Foundation for Collaborative Value Creation
In 1916, NSK was established as Japan’s first manufacturer of bearings in Osaki-cho, Ebara-gun, Tokyo (the site of
its current headquarters: Osaki, Shinagawa-ku, Tokyo). With a history that spans more than 100 years, the Company
has developed an array of innovative technologies, contributed to the reduction of energy loss and underpinned the
development of industry worldwide through its expansion in overseas operations.
As a company that is considered essential by society and that focuses on Motion & Control™, we will work to create
collaborative value with our stakeholders in the rapidly changing society of the future. Here, we touch on the founding
spirit, mission statement, technological innovation and overseas expansion as well as our ESG initiatives that collectively
underpin this creation of collaborative value while focusing on the Company’s history.
Founding Spirit
Visiting Europe and the U.S. to conduct a technical survey, Takehiko Yamaguchi,
the founder of NSK, was struck by the gap in technology level with Japan’s
machinery industry. Determined to contribute to the development of Japan’s
precision machinery industry by introducing machinery and technologies
developed overseas, he established Yamatake Shokai Co., Ltd. (currently Azbil
Corporation), to import and market machine tools and measuring instruments,
as well as Nippon Sanso Limited Partnership Company (currently Taiyo Nippon
Sanso Corporation) for the domestic production of oxygen, which until then
had to be imported. With just 6 people, he then set up Nippon Seiko Limited
Partnership Company with the aim of commercializing goods that have
screws, various types of gears, general machinery tools and other machine
manufacturing in 1914, and began research into and trial production of bearings, which are recognized as a vital
part and referred to as one of the 3 major machine elements together with screws and gears. Driven by the strong
desire to develop domestically produced bearings by all necessary means, without adequate machinery and
sufficient materials, repeated trial and error finally led to the completion of Japan’s first bearing in 1915. On the
back of this success, NSK Ltd. was established with the aim of producing bearings in Japan in 1916.
Replica bearings created based on the
oldest blueprints in existence at the
Company.
Founder Takehiko Yamaguchi
Mission Statement
Coinciding with the 75th anniversary of its founding, NSK formulated its mission statement, which defines
s
the “spirit,” “direction” and “ideal image” of NSK in the 21st century and outlines the management efforts,
s,
actions and manner through which the Company will contribute to society, in 1991. Moreover, we have
put in place the NSK Corporate Philosophy, which comprises this mission statement, management
principles, action guidelines and a corporate message, as the basis for creating the collaborative value
on which all NSK Group employees rely. Taking the view that NSK works diligently to support a variety of
industries and to expand its business overseas, while further developing as a company that contributes to
o
society through our technologies and the quality of our products, the NSK Corporate Philosophy sets the
guidelines for what is needed and how to communicate so that NSK becomes an excellent company that
is well-regarded and respected.
In an era of volatile and rapid change, we will continue to place the utmost importance on the NSK
Corporate Philosophy as the guidepost for realizing sustainable growth in conjunction with NSK Vision
2026, which we established on the occasion of our 100th anniversary.
Mission
Statement
Management
Principles /
Action Guidelines
NSK Vision 2026
ESG
▲ Environmental Management P. 31 / Evolve Personnel Development P. 30
Safety Management, Quality Management PP. 32-33 / Corporate Governance PP. 51-55
NSK’s emphasis on maintaining a high level of involvement and contributing to society began well before such terms as CSR or ESG were a part of people’s
everyday vocabulary. On this basis, we have worked diligently to improve our structure while strengthening our various activities.
On the environmental front, we established the Environment Control Department in 1975, which was subsequently incorporated into the Global
Environment Department in 2007 as a part of efforts to upgrade and expand our structure and to broaden the scope of endeavors. We introduced Neco,
our own environmental efficiency index, in 2008 to quantitatively control the environmental contribution of bearings and other NSK products that primarily
contribute to lower environmental impact. Moreover, we announced details of specific targets under the 6th Mid-Term Management Plan, which began last
year. We are pushing forward measures to, for example, reduce CO2 emissions from business activities by 60% compared with fiscal 2017 by 2050 and offset
CO2 emissions through environmentally friendly products.
Meanwhile, to contribute to society, we established the NSK Foundation for the Advancement of Mechatronics and started awarding research grants in
1988. In addition, we launched a program to provide scholarships to Japanese students who have a strong desire to study abroad at research institutions and
graduate schools, as well as to Asian students studying at Japanese graduate schools, through the NSK Scholarship Foundation from fiscal 2017. We have
also supported the Science Museum and continued to hold children’s science classes for the next generation of children since the Museum’s opening in 1964.
Moreover, we are bolstering a wide range of initiatives aimed at employees.
From a governance perspective, we invited one outside director to our Board and
established a non-mandatory committee in 1999 while promoting the shift to a Company with
Committees System in 2004 and the transition to a Company with Three (Nomination, Audit
and Compensation) Committees in 2015. In addition to appointing outside directors as chairs
of all the Company’s committees, we strengthened our governance system by increasing the
number of outside directors to 5 in fiscal 2018. Moreover, we reduced the Board of Directors
from 12 to 9 to ensure that outside directors make up the majority from fiscal 2020. More than
just a focus on upgrading our structure and systems, we put forward a policy making Board
of Directors’ meetings a forum for strategic discussions while also promoting measures aimed at
incorporating ESG in the evaluation process with respect also to directors’ and officers’ compensation.
NSK Scholarship Foundation conferment ceremony
02 NSK REPORT 2020
For more information on NSK's history, please refer to or visit the following:
NSK Report 2019 PP. 4 -5 History of NSK's Overseas Expansion https://www.nsk.com/investors/library/pdf/nsk_report/ir201903e.pdf
!
NSK Report 2018 PP. 2 -3 NSK's History of Creating Value 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 https://www.nsk.com/investors/library/pdf/nsk_report/ir201703e.pdf
!
NSK Report 2016 PP. 2 -3 NSK's Business Development History, 100 Years of NSK https://www.nsk.com/investors/library/pdf/nsk_report/ir201603e.pdf
!
Technological Innovation
▲ Core Technologies and Taking Up the Challenge of Creating New Collaborative Value PP. 42-43
Since successfully developing the first bearings in Japan in 1915,
fueled by a desire to catch up to European and U.S. technology, the
NSK spirit of pursuing new technologies has been passed down
to successive generations. Over the ensuing period, this spirit has
provided the impetus to develop a wide range of products and
technologies. In 2002, we defined tribology, materials, numerical
simulation and mechatronics as our 4 Core Technologies. And, with
the later addition of manufacturing engineering, this became our 4
Core Technologies “plus One.” We clarified the technical areas that
underpin the development and volume production of NSK’s high-
quality products and regard them as the foundation for technologies
and services that will realize sustainable growth.
Overseas Expansion
▲ Global Business Foundation PP. 44-47
NSK currently operates from 208 locations in 30 countries and
regions, and more than 19,600 of the Group’s 33,131 employees
work overseas. As far as the Japanese manufacturing industry goes,
NSK has long been advancing overseas expansion. Currently, NSK
has 149 overseas bases, including 44 production sites, 87 sales site
and 9 R&D centers with more than 60% of its total sales generated
overseas. NSK’s bearings, precision machinery and automotive
parts are not products for which production facilities can be easily
relocated. 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.
Development of Representative Products and Technologies
Attributes and Aspirations of NSK’s Overseas
1915 Japan’s first domestically produced bearings
1926
Cylindrical roller bearings for aircraft engines
1958 Ball screw type steering gearsA
1959
Ball screws for machine tool useB
1963 Bearings for Shinkansen (bullet trains)
1975 High-precision bearings for video tape recorders (VTRs)
1979 Bearing fatigue analysis technologies
1984 Direct-drive motors and Megatorque MotorsTM for factory automation
1986 Electric power steering (EPS) systems for battery-powered forklifts
1987 Automobile HUB III (third-generation hub unit bearing)C
1991 Bearings made from ultra-high purity (EP) steel
1991 Integrated single-axle actuators, MonocarrierTM
1999
Large wind turbine bearings D
Half-toroidal bearing CVTs (continuously variable transmissions)E
2004 NSKHPSTM series of industrial machinery high-performance standard bearings
2009 Electro-mechanical integrated column-type EPS
2011
Low-friction ball screws for regenerative braking system
applications used in electric and hybrid cars
Ball screws for seismic dampeners used in buildings
2013 Lubricant grease derived from 100% food-grade ingredients
2019
Non-contact torque sensor
After World War II
to 1950s
Started bearing exports
1960s
Established overseas sales networks
1970s
1980s
1990s
2000s
Started overseas production, accelerated overseas business expansion
Extended the business structure in Europe and the U.S., expanded to full-
scale business operations in Asia
Optimized production by manufacturing in the best location either at a
demand site or export base, started overseas M&A, strengthened the global
management system
Streamlined the Europe/Americas businesses, strengthened regional
headquarters functions, grew business in the Asia region, expanded the
China business rapidly
2010s
Pursued advances in overseas business development
New headquarters offices and technology center
opening ceremony in China (2009)
The Peterlee plant in the United
Kingdom being visited by HRH Prince
Charles. (1970s)
Trends in NSK’s Japan/Non-Japan Sales
D
■ Japan ■ Non-Japan
C
B
A
Overseas Sales
¥0.3 billion
1960
Overseas Sales
¥9.4 billion
1970
of which Asia region
of which Asia region
¥69.8 billion
Overseas Sales
¥27.1 billion
1980
Overseas Sales
¥117.4 billion
1990
of which Asia region
¥16
¥168.3 billion
E
Overseas Sales
¥227.2 billion
2000
1960
1970
1980
1990
2000
2010
of which Asia region
¥267.4 billion
Overseas Sales
¥355.9 billion
2010
Overseas Sales
¥516.8 billion
2019
1,000
(¥ Billion)
800
600
400
200
0
2019 (FY)
NSK REPORT 2020
03
NSK’s Collaborative Value Creation Process
NSK Supporting Society
NSK is creating collaborative value to support society everywhere in the world.
A vast array of NSK products continues to excel in such fields as motion and machinery
from the home appliances, medical equipment, automobiles, railways and other items that
support people’s daily lives and in all industries including machine tools, robotics, wind
turbines and steelmaking facilities.
NSK products will continue to support a society that is safe, secure, comfortable and
environmentally friendly.
Mining and Construction
Contributing to the creation of new needs
in such areas as ICT and electrification
and reducing LCC
LCC: Life cycle cost
Highly reliable anti-
creep design tapered
roller bearings
Semiconductor Production Equipment
Contributing to building next-
g
ding next
nex
generation infrastructure
cture
re
cc
including IoT and AI
NSK Linear Guides™
NH series, NS series
Railways
Contributing to safe, secure, comfortable
and environmentally friendly means of
transportation
p
Low-maintenance
high-reliability
gearbox bearings
NSK
vibration
control
actuators
EV・PHEV
04 NSK REPORT 2020
Steelmaking Facilities
Contributing to stable operations through
higher reliability and longer life
geer leer er gg
gerr life
Sealed four-row tapered
roller bearings
Medical Equipment
Contributing to people’s health and peace of
mind as well as advanced medical care
as wws asa well aellew a
mind as well as advvanananna
Monocarrier™
Dental
handpiece
bearings
Automobiles
Contributing to improved safety, comfort and environmental
performance
Bearings for
in-vehicle motors
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
High efficiency
starting clutch for
HEVs
Column-
type electric
power
steering
Ball screw unit
for electric
hydraulic brake
systems
Traction
reducer
Wind Turbines
Contributing to the protection of the global
environment through the stable operation of
wind turbines
Integrated
cylindrical roller
bearings
Large spherical
roller bearings
for wind turbine
main shafts
Pumps and Compressors
Contributing to smaller products that have
longer lives while providing increased
efficiency and reliability
y
NSKHPS™ high
load capacity
angular contact
ball bearings
High load
capacity deep
groove ball
bearings
Industrial Robots
Contributing to improved robot reliability
Highly rigidity thin-section angular
contact ball bearings
Machine Tools
Contributing to higher precision and productivity
in parts machining
g
in parts mach
in parts machin
HHHHigHigHigHighhh dh durabili
High durability
g durability
precision ball
precision ball
screws
SK super
NSK super
SK super
precision bearings
NSK Linear Guides™
roller guide RA series
Home Appliances
Contributing to a comfortable life that is
friendly to people and the environment
lyni
friendly
y to peop
ople
ICEE・HEVV
Ball bearings for ultra-
high-speed rotary motors
▲ ■ Industrial Machinery Business P. 26
■ Automotive Business P. 28
*Black print indicates mass-produced products.
NSK REPORT 2020
05
NSK’s Collaborative Value Creation Process
To Our Stakeholders
NSK will continue to create value through
Motion & ControlTM in collaboration
with our stakeholders, while taking great pride
in our role as a manufacturer.
President and Chief Executive Officer
Policies for Fiscal 2020 and NSK’s Commitment as a Manufacturer
we are managing our business with a focus on countermeasures
In fiscal 2019, the first year of NSK’s 6th Mid-Term Management
against the risk of sluggish demand.
Plan , we saw a continuation of economic slowdown and sluggish
demand due to the prolonged trade friction between the U.S. and
In addition to the COVID-19 pandemic, friction between the
China. In addition, the spread of the novel coronavirus (SARS-
U.S. and China is only getting worse in what has become known
Cov-II and its associated infectious disease, hereinafter COVID-19)
as the New Cold War, making the global business environment
from China across the world at the end of the fiscal year put
increasingly uncertain. At the same time, digital and cyber
the brakes on economic activities. This resulted in net sales and
technologies are attracting more attention as remote solutions
operating income of ¥831 billion and ¥23.6 billion, respectively, both
and working from home are expected to transform our everyday
decreasing compared with the previous year.
lives. We are experiencing a move toward not only selling products
As fiscal 2020 began amid the spread of COVID-19, NSK has
but also offering services such as subscriptions and Mobility as a
made the safety and security of NSK Group employees and their
Service. Even in these times of great change, we continue to put our
family members a top priority, and we continue to take thorough
commitment as a manufacturer first and foremost. Our identity, our
measures to prevent the spread of infection. Although highly
raison d’être and our strengths are based on the fact that we are a
unlikely, if a cluster infection were to occur within our company,
manufacturer, and this is something we must always hold to heart.
our business would need to close for a period of time, causing
To take advantage of our strengths, we need to think about how far
inconvenience to customers and concerns in the local community.
we can reduce friction and place Motion & ControlTM, or control of
We will continue to work to minimize the risk of infection.
the movement of machine elements, at the center of our domain.
On the business front, assuming that it will take some time
Based on the concept of monozukuri and the idea of being a
for demand to recover, we must reduce outflow costs, limit capital
manufacturer, we will explore what kind of services are required to
investment to the absolute minimum, optimize our production
create a frictionless world and what kind of value we can provide
system and reduce fixed costs in order to rebuild our earnings
in addition to products.
structure. In fiscal 2020, amid these extraordinary circumstances,
06 NSK REPORT 2020
Another thing that is important is focusing on our 4 core values
assembly, there has been an increase the number of so-called
of safety, quality, compliance and environment. Moreover, we will
cobots, or collaborative robots, equipped with autonomous driving
simultaneously pursue operational excellence, which we have been
functionality. In addition to the manufacturing industry, there will be
advocating since we began our 5th Mid-Term Management Plan,
a spillover effect on the logistics, hospital and medical industries.
as well as take on the challenge of innovation. We live in a world
Meanwhile, advances in driver-assist technology will expand
changing so rapidly that it is imperative that we prepare to adapt
beyond automobiles to include agricultural and construction
to new innovation and incorporate fresh perspectives. To make
equipment, leading to smart agriculture and smart construction.
this a reality, we must have a solid revenue base that can support
In the automotive industry, car sharing and carpooling will become
our up-front investments. I believe that this requires operational
more widespread, reducing the number of privately owned vehicles
excellence in the constant pursuit of competitiveness.
and possibly decreasing the total number of vehicles sold. We will
6th Mid-Term Management Plan P. 25
likely see many such changes in the environment surrounding NSK’s
Development of NSK in the Long Term
what we can do going forward.
Condition monitoring technology P. 27
business. I think we need to take a comprehensive look at the entire
situation, take a positive view of the world’s trends and think about
Remote, distributed and non-contact will be key themes in the
world after COVID-19. For example, to achieve the switch to
remote technology at plants, there will be an increased need for
With the aim of getting ahead of these changes, we have
automated and smart production equipment and machinery, as
established innovation centers on the West Coast of the U.S. and
well as the need for condition monitoring technology to support
in Europe in Germany, where we are trying to explore cutting-
this. Naturally, this means an acceleration in the implementation
edge technologies. In San Jose, California, we have increased
of robots. In addition to conventional fixed-type robots, which
our connections with so-called local start-ups, and we are being
can perform work usually done by humans such as welding and
approached to help these companies. Although these companies
NSK REPORT 2020
07
NSK’s Collaborative Value Creation Process
To Our Stakeholders
have ideas, they lack the resources to make them a reality. When
the most important stakeholder is our employees, as they are
they have a problem with a mechanical element of their business,
the main actors in NSK’s corporate activities. It is important that
they call on us. For us, it is through these connections that we get
every one of our employees is engaged in their work with a keen
to see what the start-ups in San Jose are doing and what they are
awareness of both the value we create and the value we can
thinking. I would like to take advantage of such a situation to create
create, and, building on NSK’s 104-year-old foundation, that their
future business opportunities.
individually and potential can be harnessed. For this purpose,
securing employment and fair compensation is a must for any
Although M&A and open innovation are increasingly important
company. In addition, it is important to ensure that each employee
for growth, I feel that our approach and perspective on these issues
is aware that he or she is participating in the creation of value for
is still limited. Unless we get out there and go and see the outside
society beyond simply achieving business goals. I believe that this
world, it is difficult to determine whether what we are doing is really
will provide employees with more motivation when going about
needed now, or whether it will be needed 10, 20 or 30 years from
their work.
now. First, it is important for me and the rest of the board to take
Next, when considering our suppliers, another stakeholder,
the initiative to go out and see what is happening in the world, and
it is important to make clear the kind of value that NSK wants to
then feed that back to the Company to act as a catalyst. It is also
create and to get them to empathize with this idea. By doing so,
important to put people in places such as the innovation centers
we will be able to find partners in them. Naturally, a fair price
I mentioned earlier, where new things are happening. We need to
and a fair business relationship is a prerequisite, and once this is
invest in start-up companies inside and outside Japan and send
achieved, we will be able to gain an understanding for the value
people to those companies to see how they engage in business. We
we wish to create. This is the driving force behind our efforts to
also want to pursue opportunities for mergers and acquisitions in
create something useful for society. By working together with our
Europe and North America. In particular, Europe is home to some
suppliers, we will continue to earn the trust of our customers by
unique monozukuri companies, so we are looking for companies no
creating and proposing new value from the end user’s point of
matter the size that have something to offer, or players with strong
view, in addition to meeting the needs of our customers.
brands in Europe such as in bearings and precision machinery
In addition, we have offices around the world, and we want to
products, as well as condition monitoring technology, which is an
show the surrounding local communities where NSK is headed
area we need to focus on in the future. We might seek to partner
and what kind of value we will create, so that they can empathize
with such a company, for example, in the form of a joint venture,
with us. At the same time, I believe that we can achieve harmony
if not an outright acquisition. Particularly in the automotive field,
if the local community understands and appreciates the way we
development costs will increase significantly as we move toward
work and our commitment to safety, quality and the environment.
automated and electric vehicles. We must optimize development
We also want to provide the future generation, another type of
costs and speed up the development process by collaborating with
stakeholder, with the foundation of society and the way it should
players and partners who can complement each other’s strengths.
be. I believe it is also important to demonstrate the kind of behavior
Open innovation P. 23
and value we create for society that the future generation can
Creating Collaborative Value with Our Stakeholders
I believe the purpose of corporate activities, the purpose of our
respect. Creating various types of value for the world will ultimately
lead to a solid return of expected profits to our shareholders.
In this way, through all of our actions and activities, we will
not only provide value to our stakeholders but also work together
with them to create value in order to gain their understanding and
existence, lies in the creation of value for society. NSK’s mission
empathy with our mission.
statement can be broken down into the following specific values:
contributing to the environment, contributing to an advanced
technological society, realizing a more prosperous society, supporting
Creating collaborative value with stakeholders PP. 16-17
Evolution of ESG Initiatives
the growth of a wide range of industries, advancing a mobility society
In terms of initiatives for “E,” or the Environment, we decreased the
and improving shareholder value. We define 6 stakeholders who co-
total volume of CO2 emissions in fiscal 2019. However, this was
create these values. Although all of them are important, I believe
due to a drop in production, and the CO2 emissions generated in
08 NSK REPORT 2020
conjunction with a certain amount of production, in other words,
energy sector. We aim to further contribute to wind and solar
the per production unit, were actually worse. It is not easy to
power generation with high-function high-quality products. In
achieve tangible results in only one or two years. A major source
response to the trend toward more and more electrification of
of CO2 emissions in our business is the equipment used in heat
automobiles and the increasing use of battery electric vehicles to
treatment to harden metals and grinding to produce smooth, low-
meet environmental regulations, we offer our customers a variety
friction surfaces, but we need to make major investments not only
of new products and technologies in addition to our existing
to increase the efficiency of these processes but also to replace
bearings. Furthermore, in large cities in China and Southeast
the current equipment with new technology. We will continue to
Asia, especially in overcrowded cities, railways as a means of
work toward achieving our goal of reducing total emissions while
mass transportation are one of the most effective solutions for air
lowering the emissions per production unit.
pollution and car congestion. In our railways business , NSK has
I also want to further deepen our employees’ awareness of
the technical skills and the competitive edge built up over the past
environmental issues. We have been working for more than 100
60 years for meeting the rigorous conditions of high-speed rail, and
years to improve and innovate our bearings by reducing friction,
we see it as a major business opportunity for the future.
which is the fundamental function of bearings, as the core of our
business. Less friction means more efficient machinery and energy
savings. However, not many of our employees are able to see how
much the bearings they make help reduce CO2 emissions around
the world. Of NSK’s 4 core values, safety and quality are the most
visible and it is easy to recognize the importance of them. On the
other hand, with regard to the environment, it is difficult to realize
the importance of environmental measures because CO2 emissions
are not something anybody can actually see. For this reason, we
need to make our core value of the environment clearer and be
more conscious of this. For example, if plant employees working
on a production line could “see” how much each product they
manufacture and ship each day is helping to reduce CO2 emissions,
I am sure they would become more aware of this.
CO2 emissions
Reduce CO2 emissions in business activities P. 20
Environmental management P. 31
Non-financial highlights P. 38
Heat treatment
Reduce CO2 emissions in business activities P. 20
Risks and opportunities of climate change
Endorsement of TCFD recommendations P. 31
Risk management PP. 48-49
Electrification of automobiles and the increasing
use of battery electric vehicles; railways
business
Maximizing our environmental
contribution through products P. 21
Regarding “S,” society, an outside director once asked me,
“How much are you working on employee relations,” which is
something I had been asked before. Up to that point, I had been
aware of various IR and CSR activities, but when I thought about
it, there was still room for improvement in our communication
with employees. In Japan, we hold Group Management Meetings
in which group companies participate are held 3 times a year.
These meetings help provide information to the heads of each
department on the business environment, business performance
trends, budget policies and so on. However, these meetings are
rather one-way in nature. By that, I mean the meetings are a
form of one-way communication. Employees have the opportunity
Regarding the risks and opportunities of climate change ,
to view meetings via video streaming, but it can be difficult to
the first thing to do is to prepare for risks in advance. There has
understand the management policies in these meetings. There
been frequent heavy rainfall in various areas, which is believed
existed no platform for employees to share opinions and ask why
to have been caused by global warming. In the case of NSK, we
we do things the way we do or why we even do certain things to
have manufacturing sites located close to rivers, and each of these
begin with. Therefore, we have been enhancing opportunities for
sites conducts risk assessments; however, we will strengthen
two-way communication over the past 2 years. I personally visit
our response while assuming even more severe and worst-case
plants and sales offices and talk directly with team leaders and
scenarios in the face of increasingly intense weather conditions.
assistant managers at their workplaces. We also hold biannual
If we notice any sign of danger, we stop operation of the plant and
financial results briefings for employees to provide a forum for
prioritize the safety of our employees above all else. We are also
communication between management and employees and to
stepping up our efforts to prevent oil and waste material leaks
improve their understanding of our financial results and business
from our plants to avoid secondary disasters.
strategies. We also provide English-language videos on our
As for opportunity, we are directly involved in the renewable
intranet for our overseas employees. Through these efforts, we
NSK REPORT 2020
09
NSK’s Collaborative Value Creation Process
To Our Stakeholders
are working to communicate what NSK and the management team
mechanics of bearings, how they work, their mechanisms and
are thinking about.
mechanical engineering.
Financial results briefings for employees P. 23
Next is “G” for Governance. The composition of NSK’s Board
of Directors was changed to a majority of 5 outside directors and 4
Diversity and inclusion initiatives, of course, are not just
internal directors. This decision was made with the aim of stepping
about having women or non-Japanese nationals in the workplace
up our governance to the next level. The ultimate form of governance,
and calling it a day. These initiatives are essentially about having
in my opinion, is how far the Board of Directors can stop the CEO
a diverse workforce with different genders, nationalities, ages and
from running amok, and by extension, how they can remove the CEO
careers in the workplace, and being able to exercise everybody’s
from power if the need to do so should arise. By having a majority
abilities based on the idea that each person is a member of the
of outside directors, we have demonstrated our will to ensure that
organization. With both diversity and inclusion firmly in place, we can
those of us who are responsible for the operation of NSK will be
create a challenging and creative workplace where everyone feels a
able to do so with a high degree of tension. As a Company with
sense of fulfillment in their work. We need to create opportunities
Three Committees, NSK delegates a wide range of management
and policies to achieve this. For example, we are actively working
responsibilities to its executive officers, and these officers must
to support women’s activities by holding numerous training
be accountable to the Board of Directors for their actions. At
sessions and events for female employees in multiple regions,
the same time, the Board of Directors, taking a mid- to long-term
including outside of Japan. In Japan, it is also necessary to devise
perspective, discusses and decides how the world will change 3, 5
ways to support the balance between childcare, nursing care
and 10 years from now, and what NSK should aim for and achieve
and medical treatment in response to the demands of society.
in that time, drawing on the extensive knowledge and experience of
However, these initiatives are only symbolic. The key to true
outside directors.
inclusion is to reform the culture in the workplace itself. To this
end, we will continue to enhance the dissemination of information
A renewal of our takeover defense measures was approved
and training opportunities for a greater number of employees, with
at this year’s General Meeting of Shareholders. Our takeover
a focus on women, LGBT, people with disabilities, older workers,
defense measures are not about opposing anybody who wants to
foreign nationals and support for a healthy work-life balance.
take over NSK, but rather about questioning the motives and aims
Diversity and inclusion will be the foundation for NSK’s value
of hostile bidders, in other words, those who might cause damage
creation and growth.
to the value of our company. In this way, we can clarify what their
Diversity and inclusion
Diversity as a driving force of the organization P. 22
Evolve personal development P. 30
intentions are in acquiring NSK and how they would change NSK
Our most important asset is our human resources, and one
of the most compelling issues we face is the increasing difficulty
of recruiting engineers. Although NSK needs a large number
of mechanical engineering personnel, the number of students
interested in this field is decreasing, and competition for personnel
is intensifying. We have to ask the question, “How can we get more
young people interested in mechanical engineering?” With this in
mind, NSK holds science classes for elementary school students
and young children in Japan to give them an opportunity to see
bearings for themselves during fun experiments, and we published
a comic book entitled “The Secrets of Bearings.” We would like to
continue to actively engage in activities that will lead to the future
generation, one of our 6 stakeholders, taking an interest in the
10 NSK REPORT 2020
in the future. Professional institutional investors are likely to
transition the preventive maintenance of NSK’s 64 plants located
make decisions about takeover moves with a focus on their own
around the world to NSK’s AI-based facility management system .
interests. However, our stakeholders are not only shareholders
Currently, we are mainly working on the Otsu and Fujisawa plants
and investors but also our employees, our customers, local
in Japan, where we have installed a smart factory pilot line, and we
communities, suppliers and distributors, and the future generation.
plan to expand the system to overseas plants in the future. We also
There is value in NSK for each of them. Therefore, if somebody
intend to evolve the system into a smart factory platform that can
who wishes to take over NSK appears, we would explain to
serve as a basis for industry and technological innovation, so that
individual shareholders other than institutional investors and
it will not be confined to our own plants but will also be used by
stakeholders that, “This is what the buyer is thinking about, but that
our suppliers, our business partners. This leads to Goal 17 of the
could damage NSK’s value. In response, we are trying to increase
SDGs: “Partnerships for the Goals.” We do not want to do things
corporate value like this,” and endeavor to provide our opinion of
for the sake of the SDGs goals, but rather we want to be oriented
the situation. We have introduced takeover defense measures as
toward adding an SDGs perspective to the initiatives in our business
a mechanism to obtain the information needed to make such an
and in the way we go about business. I am sure this will also give
analysis. I once explained these ideas to a European institutional
new meaning to the work our employees undergo. It is not just about
investor we visited after a shareholder meeting. I remember the
saying, “We need to do this much more this month” or “We need to
investor saying, “If I knew that was the case, I would have agreed
increase our sales”; it’s about finding a new social meaning to our
to the measures.”
work. More and more people, especially the younger generation,
want to do things that are socially meaningful, so it is important
With regard to the director/executive officers’ compensation
to have that kind of meaning when going about work. With this
system , we have increased the number of ESG metrics. From an ESG
motivation in mind, I would like to make sure that our SDGs are
perspective, it is easy for us to understand using the Company’s core
firmly rooted in our work.
values of safety, quality, compliance and the environment as metrics.
Given that we believe these are our values, management must, of
course, take responsibility for how much these values have improved
and whether awareness of them has improved. Quality performance
has been included in addition to business performance as an
evaluation item, but given that we say safety and the environment
are important, we should include them as well. It is important to
7 key goals
NSK’s SDGs Declaration P. 18
AI-based facility management system
PM-Ai P. 19
Co-creation Committed to Motion & ControlTM
set metrics (KPIs) to include in the evaluation of compensation to
I took on the role of CEO in 2015, on the 100th anniversary of
make sure that we are evaluating our performance. By doing so,
I believe we will become more rigorous and more aware of our
efforts.
Directors/Officers’ compensation P. 54
Thoughts on SDGs
NSK’s foundation. In the 5 years since then, I have made it a major
theme to instill and realize NSK Vision 2026, “Setting the Future in
Motion,” which we announced on the 100th anniversary of NSK’s
founding. We have been working to change the way we think and
act at NSK from passive to active, to increase the speed at which
we make decisions and take action. Currently, with the COVID-19
pandemic forcing us to change the fundamental way we work, we
have the opportunity to think more flexibly about changing the way
It is my belief that we can contribute to the SDGs by working through
we used to think and do things.
our core business. The SDGs are an extension of our business, and
As the world changes and uncertainty grows, NSK will continue
the pursuit of our business goals will lead to the realization of the
to create value through Motion & ControlTM in collaboration with
SDGs. In other words, we want to contribute to society and grow as a
our stakeholders, while maintaining our commitment to being a
company at the same time.
manufacturer. For NSK to continue to be a company that is trusted
For example, one of our 7 key goals is “Industry, Innovation
globally and needed by society, we will continue to strive to be a
and Infrastructure.” Examples of this include remote control at
company that continues to be essential for society in the future.
our manufacturing sites and smart factories. We are working to
Thank you for your ongoing support.
NSK REPORT 2020
11
NSK’s Collaborative Value Creation Process
NSK’s Business Model for Collaborative Value Creation
NSK Mission
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
collaborative value created by NSK will lead to contributions to
the goals for 2030 for which the SDGs are aiming.
NSK Vision
Contribution to Resolving
Social Issues
Safer and smoother society
Protection of the global environment
Diverse Capital and Inputs
Provide Values through Evolu
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
●4 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 5 years)
77.5％
Number of employees
worldwide (consolidated)
30,747
Seminars on balancing work
and caregiving (Japan)
Total: 32 times
Participants: Approx.700
Total equity
¥526.5 billion
Interest-bearing debt
¥279.2 billion
Cash and cash equivalents
¥137.3 billion
Number of customer
inquiries to
NSK salespeople
4,790 cases/year
Energy input (per year)
15,872 TJ
(As of March 31, 2020)
Value
Feedback
Business Growth and
Profitability
R&D
Vision
P.0
Receipt of Orders
ESG Mana
The 6th Mid-Term
The 6th Mid-Term
The 6th Mid-Term
The 6th Mid-Term
Safety
P. 32
Core Core Core Core
Compliance
P. 50
Foundation Supporting
Technological Foundation
Risk Management
P. 42
P. 48
12 NSK REPORT 2020
Statement
2026
With the vision for 2026 to “establish a corporate foundation for
sustainable growth,” NSK has identified the 3 key management
tasks of “business growth and profitability,” “utilization of robust
managerial resources,” and “ESG management.” Positioned as
the first 3 years through which to realize this vision, we are
currently promoting initiatives under the 6th Mid-Term
Management Plan. NSK’s business model for creating
collaborative 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. To maintain and deepen these efforts in a sustainable
manner, we are strengthening our “technical foundation,” “global
business foundation,” “risk management,” and “corporate
governance.”
Collaborative Value with
Stakeholders
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
Customers
Employees
Contribution to an advanced technological society
Realization of a more prosperous society
Suppliers
Growth of a wide range of industries
Advancement of a mobility society
Improvement of shareholder value
NSK’s 7 Key SDGs
Shareholders
and
Investors
Local
Communities
Future
Generations
tion of Motion & ControlTM
Output and Outcomes
Chain
Sales/
Aftermarket
Manufacturing
Utilization of Robust
Managerial Resources
for 2026
P. 25
00
gement
Mass Production
Design/
Preparation
Procurement
Management Plan
Management Plan
Management Plan
Management Plan
P. 25
Quality
P. 33
Values
Values
Values
Values
Environment
P. 31
Sustainability
Global Business Foundation
Corporate Governance
P. 44
P. 51
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/TSR
● 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. 97 million
Number of patents held
8,052 patents
(7,499 patents in the previous fiscal year)
Net cash provided by operating activities
¥72.4 billion
Dividends/Payout ratio
¥15.6 billion/88.2％
Lost-worktime injury
frequency rate (global)
0.35 (0.37 in the previous fiscal year)
Diversity (global)
Ratio of female
employees 19.0％
(19.1% in the previous fiscal year)
Number of employees who took
childcare leave
Men: 125 Women: 37
Japan Management College
Total number of graduates
over all 19 college terms: 344
Global Management College
Total number of graduates
over all 9 college terms: 111
Number of regions:
Graduates from 21 countries
(including expected graduates in FY2020)
Number of employees who
have attained a TOEIC
score of 730 or higher
631 (563 in the previous fiscal year)
Development of environmentally
friendly products
232 products (cumulative total)
GHG emissions
11.8％ decrease
(compared with FY2017)
NSK REPORT 2020
13
NSK’s Collaborative Value Creation Process
NSK’s Business Activities and Corporate Collaborative Value Creation (Deepening of the Value Chain)
Value Chain
Value Chain
Feedback
Feedback
Sales/
Sales/
Aftermarket
Aftermarket
Manufacturing
Manufacturing
Business Growth and
Business Growth and
Profitability
Profitability
Utilization of Robust
Utilization of Robust
Managerial Resources
Managerial Resources
R&D
R&D
Vision for 2026
Vision for 2026
P.00
P.00
Procurement
Procurement
NSK’s Business Activities
NSK’s Business Activities
NSK engages in BtoB operations, with its major
NSK engages in BtoB operations, with its major
customers including automakers and machinery
customers including automakers and machinery
manufacturers.
manufacturers.
NSK has 2 business segments, the Industrial
NSK has 2 business segments, the Industrial
Machinery Business and the Automotive Business,
Machinery Business and the Automotive Business,
which reflect the industries in which the Company’s
which reflect the industries in which the Company’s
customers operate. The Industrial Machinery Business
customers operate. The Industrial Machinery Business
Division Headquarters and the Automotive Business Division
Division Headquarters and the Automotive Business Division
Headquarters oversee these businesses on a global level.
Headquarters oversee these businesses on a global level.
Each business division headquarters maintains its own
Each business division headquarters maintains its own
production, sales and technology units that take responsibility for
production, sales and technology units that take responsibility for
the entire value chain, from marketing activities for order receipt to
the entire value chain, from marketing activities for order receipt to
product design, manufacturing, sales, delivery, payment collection
product design, manufacturing, sales, delivery, payment collection
and aftermarket services. As shown in the chart on the right, NSK’s
and aftermarket services. As shown in the chart on the right, NSK’s
value chain creates collaborative value through business activities
value chain creates collaborative value through business activities
encompassing R&D, manufacturing, sales and feedback underpinned by
encompassing R&D, manufacturing, sales and feedback underpinned by
its core values: safety, quality, compliance and the environment.
its core values: safety, quality, compliance and the environment.
Value Chain
Value Chain
Receipt of Orders
Receipt of Orders
ESG Management
ESG Management
Mass Production
Mass Production
Design/
Design/
Preparation
Preparation
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
Safety
Safety
Quality
Quality
Core Values
Core Values
Core Values
Core Values
Core Values
Core Values
Core Values
Core Values
Compliance
Compliance
Environment
Environment
Mass
Mass
Production
Production
Design/
Design/
Preparation
Preparation
R&D
R&D
Receipt of
Receipt of
Orders
Orders
Our 4 Core Technologies plus One are tribology,
Our 4 Core Technologies plus One are tribology,
materials, numerical simulation, mechatronics
materials, numerical simulation, mechatronics
and manufacturing engineering (see p. 42).
and manufacturing engineering (see p. 42).
R&D covers a wide range of fields including
R&D covers a wide range of fields including
fundamental research, advanced development,
fundamental research, advanced development,
application development and manufacturing
application development and manufacturing
engineering. NSK’s R&D activities lead to the
engineering. NSK’s R&D activities lead to the
creation of new products, technologies and
creation of new products, technologies and
businesses.
businesses.
Having worked together to ascertain customer
Having worked together to ascertain customer
needs and social needs, sales and technology
needs and social needs, sales and technology
divisions then make technical proposals and
divisions then make technical proposals and
demonstrations that culminate in the receipt of
demonstrations that culminate in the receipt of
orders. The timing of orders received, lead times and
orders. The timing of orders received, lead times and
other aspects of order-taking activities depend on
other aspects of order-taking activities depend on
the customer’s business, products and components
the customer’s business, products and components
used. For global products, the sales divisions
used. For global products, the sales divisions
coordinate with the relevant sites in other countries.
coordinate with the relevant sites in other countries.
Mass production design entails the design of large-lot
Mass production design entails the design of large-lot
products delivered to customers. Mass production
products delivered to customers. Mass production
includes both newly designed products and
includes both newly designed products and
standardized products that do not require new designs.
standardized products that do not require new designs.
Mass production preparation involves the setting up of
Mass production preparation involves the setting up of
processes and production equipment at mass
processes and production equipment at mass
production plants once specifications have been
production plants once specifications have been
finalized. In many cases, customer approval is required
finalized. In many cases, customer approval is required
for product specifications, equipment and processes.
for product specifications, equipment and processes.
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●Technical staff (human capital)
●Technical staff (human capital)
●Accumulated technologies, R&D centers
●Accumulated technologies, R&D centers
(intellectual capital)
(intellectual capital)
●R&D structure with external parties
●R&D structure with external parties
(social/relationship capital)
(social/relationship capital)
●Financial foundation for funding R&D (financial capital), etc.
●Financial foundation for funding R&D (financial capital), etc.
Ref
Ref
R&D expenses (on a managerial basis)
R&D expenses (on a managerial basis)
(FY2019) ¥31.4 billion
(FY2019) ¥31.4 billion
▲ P. 43
●NSK’s strengths are in its ability to solve complex
●NSK’s strengths are in its ability to solve complex
technological problems based on our 4 Core Technologies
technological problems based on our 4 Core Technologies
plus One, the breadth of talented technical staff and
plus One, the breadth of talented technical staff and
accumulated technologies gained through deep knowledge
accumulated technologies gained through deep knowledge
and experience.
and experience.
●Based on our tight-knit relationships with customers, we
●Based on our tight-knit relationships with customers, we
can quickly grasp their product- and technology-related
can quickly grasp their product- and technology-related
needs and guide development to meet those needs.
needs and guide development to meet those needs.
●NSK leverages collaborations and joint development with
●NSK leverages collaborations and joint development with
our customers, suppliers and external research institutions
our customers, suppliers and external research institutions
in its product development (e.g., steel materials, grease,
in its product development (e.g., steel materials, grease,
motors, electronic control units [ECUs]).
motors, electronic control units [ECUs]).
●NSK has a global network of technology centers.
●NSK has a global network of technology centers.
●NSK has systematic education programs and educational
●NSK has systematic education programs and educational
institutions, including the NSK Institute of Technology (NIT),
institutions, including the NSK Institute of Technology (NIT),
for the training and strengthening of its technical staff.
for the training and strengthening of its technical staff.
Ref
Ref
Number of participants in the NSK Institute of
Number of participants in the NSK Institute of
Technology (NIT) (FY2019) 527
Technology (NIT) (FY2019) 527
▲ P. 39
●Experience and track record in QCDDSM (manufacturing,
●Experience and track record in QCDDSM (manufacturing,
●Mass production equipment preparation, capital
●Mass production equipment preparation, capital
intellectual and human capital)
intellectual and human capital)
●Strong relationships of trust with customers
●Strong relationships of trust with customers
(social/relationship capital)
(social/relationship capital)
●Sales capabilities (human capital)
●Sales capabilities (human capital)
●Technical proposal capabilities (intellectual and human capital)
●Technical proposal capabilities (intellectual and human capital)
●NSK brand recognition (social/relationship capital), etc.
●NSK brand recognition (social/relationship capital), etc.
investment (manufacturing capital)
investment (manufacturing capital)
●Design engineers (human capital)
●Design engineers (human capital)
●Accumulation of a wide variety of technologies
●Accumulation of a wide variety of technologies
(intellectual capital)
(intellectual capital)
●Technology centers, R&D sites (intellectual capital)
●Technology centers, R&D sites (intellectual capital)
●NIT (intellectual and human capital), etc.
●NIT (intellectual and human capital), etc.
●NSK has internal systems that support
●NSK has internal systems that support
tight-knit communications between
tight-knit communications between
customers and the Company’s
customers and the Company’s
engineering and sales staff.
engineering and sales staff.
●NSK’s global development and supply
●NSK’s global development and supply
capabilities also help to win a variety of
capabilities also help to win a variety of
orders (e.g., orders for newly
orders (e.g., orders for newly
developed, improved and
developed, improved and
existing/standard products).
existing/standard products).
●Global Account Managers (GAMs) and
●Global Account Managers (GAMs) and
Key Account Managers (KAMs) work
Key Account Managers (KAMs) work
together on project requirements.
together on project requirements.
●NSK focuses on high-quality,
●NSK focuses on high-quality,
environmentally friendly products that
environmentally friendly products that
are trusted by customers.
are trusted by customers.
●Design quality is a key factor in manufacturing
●Design quality is a key factor in manufacturing
quality. Accordingly, accurately understanding
quality. Accordingly, accurately understanding
the specifications required by customers and
the specifications required by customers and
reflecting them in product design leads to
reflecting them in product design leads to
improvements in product development, design
improvements in product development, design
proposals and project management.
proposals and project management.
●NSK develops its own, specialized production
●NSK develops its own, specialized production
equipment, which leads to lower costs for
equipment, which leads to lower costs for
mass-produced products.
mass-produced products.
●NSK has a framework in place to manage the
●NSK has a framework in place to manage the
entire process, from order receipt to the mass
entire process, from order receipt to the mass
production launch. In accordance with that
production launch. In accordance with that
framework, detailed inspection and confirmation
framework, detailed inspection and confirmation
of specifications, quality and cost are performed
of specifications, quality and cost are performed
at each process milestone (NPDS).
at each process milestone (NPDS).
●NSK works to improve profitability through
●NSK works to improve profitability through
timely and cost-conscious preparations, from
timely and cost-conscious preparations, from
product design to mass production.
product design to mass production.
●Establishment and promotion of proactive R&D themes
●Establishment and promotion of proactive R&D themes
●Based on changing customer and
●Based on changing customer and
●Utilization of core assets (capitalized
●Utilization of core assets (capitalized
for rapid technological changes in the world
for rapid technological changes in the world
(electrification, automation, IoT, the environment)
(electrification, automation, IoT, the environment)
●Utilization of open innovation
●Utilization of open innovation
●Improvement of development and evaluation efficiency
●Improvement of development and evaluation efficiency
▲ P. 23
by utilizing AI and simulation
by utilizing AI and simulation
●Improvement of “plus One = manufacturing
●Improvement of “plus One = manufacturing
engineering” that emphasizes and optimizes quality
engineering” that emphasizes and optimizes quality
from the development stage
from the development stage
●Training and retention of engineers to hand down and
●Training and retention of engineers to hand down and
▲ P. 30
evolve the 4 Core Technologies
evolve the 4 Core Technologies
●Development of technologies and products to
●Development of technologies and products to
contribute to protection of the global environment/CO2
contribute to protection of the global environment/CO2
reduction
reduction
▲ P. 31
social needs, improvement in the level
social needs, improvement in the level
of proposal capabilities utilizing
of proposal capabilities utilizing
existing and newly developed
existing and newly developed
technologies
technologies
▲ P. 21,P. 27,P. 29
▲ P. 21,P. 27,P. 29
●Supply proposals from optimal
●Supply proposals from optimal
locations that make use of global
locations that make use of global
production sites
production sites
●Maintaining relationships of trust and
●Maintaining relationships of trust and
proposal/provision of value/services in
proposal/provision of value/services in
new styles that go beyond conventional
new styles that go beyond conventional
methods
methods
differentiation technology) aimed at streamlining
differentiation technology) aimed at streamlining
mass production design and reducing lead times
mass production design and reducing lead times
●Equipment and process settings to achieve
●Equipment and process settings to achieve
stable mass production quality and reduced
stable mass production quality and reduced
workload
workload
●Ascertainment of required quality level of
●Ascertainment of required quality level of
markets (end users) and reflection
markets (end users) and reflection
in products
in products
▲ P. 33
●Improvement of development and evaluation
●Improvement of development and evaluation
efficiency by utilization of AI and simulation
efficiency by utilization of AI and simulation
●Installation of mass production equipment that
●Installation of mass production equipment that
contributes to global environmental protection
contributes to global environmental protection
and CO2 reduction
and CO2 reduction
14 NSK REPORT 2020
Manufacturing
Manufacturing
capital
capital
Intellectual
Intellectual
capital
capital
Human
Human
capital
capital
Financial
Financial
capital
capital
Social/
Social/
Relationship
Relationship
capital
capital
Natural
Natural
capital
capital
Shared Features of NSK’s Business
Shared Features of NSK’s Business
NSK’s products are components that enhance the performance of the customer’s
NSK’s products are components that enhance the performance of the customer’s
machinery in which they are incorporated. The product specifications and functional
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.
requirements of our customers have an impact on NSK’s products and business activities.
QCDDSM: Quality, Cost, Delivery, Development, Service and Management play
QCDDSM: Quality, Cost, Delivery, Development, Service and Management play
an important role in securing NSK’s competitive advantage.
an important role in securing NSK’s competitive advantage.
Demand conditions in the industries of our customers affect NSK’s sales and profits.
Demand conditions in the industries of our customers affect NSK’s sales and profits.
The ability to develop business on a global scale affects NSK’s competitiveness
The ability to develop business on a global scale affects NSK’s competitiveness
and growth potential.
and growth potential.
The ability to propose technological solutions is a key to acquiring new projects.
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
In principle, products are manufactured once orders are received, rather than in
anticipation of orders.
anticipation of orders.
NSK’s Competitive Advantages
NSK’s Competitive Advantages
● Extensive product lineup as a comprehensive manufacturer
● Extensive product lineup as a comprehensive manufacturer
● Accumulated expertise in customer needs and technology
● Accumulated expertise in customer needs and technology
for a wide range of industries and applications
for a wide range of industries and applications
● Diverse business relationships/customer base including
● Diverse business relationships/customer base including
machinery manufacturers, automakers, auto component
machinery manufacturers, automakers, auto component
manufacturers, distributors, sales outlets and suppliers, etc.
manufacturers, distributors, sales outlets and suppliers, etc.
● Technological capabilities in technical development,
● Technological capabilities in technical development,
proposal and problem solving based on our 4 Core
proposal and problem solving based on our 4 Core
Technologies plus One
Technologies plus One
● Global management system and global manufacturing,
● Global management system and global manufacturing,
supply and technical support capabilities
supply and technical support capabilities
Procurement
Procurement
Manufacturing
Manufacturing
Sales/
Sales/
Aftermarket
Aftermarket
Feedback
Feedback
Based on the specifications determined by the
Based on the specifications determined by the
development and design departments, activities
development and design departments, activities
to procure the raw materials/components used
to procure the raw materials/components used
in products, production facilities, sub-materials,
in products, production facilities, sub-materials,
etc. The Company realizes high-level QCD and
etc. The Company realizes high-level QCD and
stable procurement through fair, impartial,
stable procurement through fair, impartial,
transparent and socially and environmentally
transparent and socially and environmentally
friendly transactions with its suppliers.
friendly transactions with its suppliers.
The manufacture of products takes place at the NSK
The manufacture of products takes place at the NSK
Group’s manufacturing plants. A wide range of business
Group’s manufacturing plants. A wide range of business
collaborations, including in manufacturing, quality
collaborations, including in manufacturing, quality
assurance, manufacturing engineering/equipment
assurance, manufacturing engineering/equipment
management, production control, plant accounting and
management, production control, plant accounting and
general affairs work, is necessary to ensure stringent
general affairs work, is necessary to ensure stringent
management concerning quality, cost and delivery (QCD).
management concerning quality, cost and delivery (QCD).
Both the Industrial Machinery Business and the Automotive
Both the Industrial Machinery Business and the Automotive
Business maintain their own manufacturing plants.
Business maintain their own manufacturing plants.
Sales activities span the delivery of manufactured
Sales activities span the delivery of manufactured
products to customers and distributors, inspection
products to customers and distributors, inspection
and acceptance of the delivered products, and final
and acceptance of the delivered products, and final
recording of the sale. Aftermarket services entail the
recording of the sale. Aftermarket services entail the
maintenance and repair of equipment and machinery
maintenance and repair of equipment and machinery
for customers and end users. Feedback from
for customers and end users. Feedback from
customers is reflected in production plan reviews,
customers is reflected in production plan reviews,
inventory management, product improvements and
inventory management, product improvements and
the development of new products.
the development of new products.
●Relationships of trust and coordination
●Relationships of trust and coordination
with suppliers (social/relationship
with suppliers (social/relationship
capital)
capital)
●Development purchasing (intellectual and
●Development purchasing (intellectual and
human capital)
human capital)
●Buyer skills (human capital)
●Buyer skills (human capital)
●Production plants and facilities (manufacturing capital)
●Production plants and facilities (manufacturing capital)
●Various manufacturing engineering, accumulated know-how
●Various manufacturing engineering, accumulated know-how
●Human resources to undertake production, sales
●Human resources to undertake production, sales
and inventory (PSI) management (human capital)
and inventory (PSI) management (human capital)
(intellectual capital)
(intellectual capital)
●Production technical skills (human capital)
●Production technical skills (human capital)
●Suppliers and local communities (social/relationship capital)
●Suppliers and local communities (social/relationship capital)
●Steel used as a raw material, components, oil, electric power
●Steel used as a raw material, components, oil, electric power
and water (natural capital, manufacturing capital), etc.
and water (natural capital, manufacturing capital), etc.
●Aftermarket service distribution channels
●Aftermarket service distribution channels
(customers, distributors and sales outlets),
(customers, distributors and sales outlets),
(social/relationship capital)
(social/relationship capital)
●Production-related survey and analytical data
●Production-related survey and analytical data
(intellectual capital), etc.
(intellectual capital), etc.
●NSK continuously maintains and strengthens
●NSK continuously maintains and strengthens
favorable and strong relationships with its suppliers.
favorable and strong relationships with its suppliers.
●NSK achieves a high level of QCD through
●NSK achieves a high level of QCD through
continuous improvement activities and joint
continuous improvement activities and joint
development in collaboration with suppliers.
development in collaboration with suppliers.
●NSK has a structure that enables in-house
●NSK has a structure that enables in-house
development and manufacturing, as well as
development and manufacturing, as well as
procurement of facilities and equipment within the
procurement of facilities and equipment within the
Group.
Group.
●NSK is strengthening its tolerance to foreign
●NSK is strengthening its tolerance to foreign
exchange rate fluctuations by expanding localization
exchange rate fluctuations by expanding localization
of procurement.
of procurement.
●In the event of, for example, a natural disaster, the
●In the event of, for example, a natural disaster, the
Company has in place a system to quickly ascertain
Company has in place a system to quickly ascertain
the damage status and supplier problems and take
the damage status and supplier problems and take
the necessary measures in cooperation with them.
the necessary measures in cooperation with them.
●NSK promotes CSR activities throughout the supply
●NSK promotes CSR activities throughout the supply
chain toward the realization of a sustainable society.
chain toward the realization of a sustainable society.
●Operating 20 plants in Japan and 44 plants
●Operating 20 plants in Japan and 44 plants
●NSK responds quickly and meticulously through its global
●NSK responds quickly and meticulously through its global
overseas, NSK possesses a production system
overseas, NSK possesses a production system
able to meet global demand in a timely
able to meet global demand in a timely
manner.
manner.
●As mother plants, some of the plants both in
●As mother plants, some of the plants both in
Japan and overseas have established support
Japan and overseas have established support
systems, such as for launching overseas plants
systems, such as for launching overseas plants
and addressing measures for various tasks.
and addressing measures for various tasks.
●Small-group activities (QC circles) are
●Small-group activities (QC circles) are
conducted at each plant on an ongoing basis to
conducted at each plant on an ongoing basis to
improve workplace processes. More overseas
improve workplace processes. More overseas
plants are being operated under the
plants are being operated under the
supervision of local staff.
supervision of local staff.
●The NSK Manufacturing Education and
●The NSK Manufacturing Education and
Training Center provides hands-on training to
Training Center provides hands-on training to
engineers from plants around the world with
engineers from plants around the world with
the aim of passing down technical skills and
the aim of passing down technical skills and
improving technical capabilities.
improving technical capabilities.
sales network (118 locations).
sales network (118 locations).
●NSK aims to maintain appropriate levels of inventory and
●NSK aims to maintain appropriate levels of inventory and
undertakes strict inventory controls with advanced PSI
undertakes strict inventory controls with advanced PSI
management.
management.
●The bedrock of the aftermarket business is NSK’s strong
●The bedrock of the aftermarket business is NSK’s strong
relationship with distributors and sales outlets as well as its
relationship with distributors and sales outlets as well as its
extensive network.
extensive network.
●NSK has advanced analysis capabilities and accumulated
●NSK has advanced analysis capabilities and accumulated
technologies from access to a wide range of data fields, such
technologies from access to a wide range of data fields, such
as for defects and damage at customers and end users.
as for defects and damage at customers and end users.
●In addition to responding to repair and maintenance demand
●In addition to responding to repair and maintenance demand
not only for its own products but also for other companies’
not only for its own products but also for other companies’
products, NSK leverages its advanced network to respond
products, NSK leverages its advanced network to respond
quickly to occasional demand outside of routine
quickly to occasional demand outside of routine
maintenance.
maintenance.
●Feedback is used to improve products and propose solutions
●Feedback is used to improve products and propose solutions
with new technologies.
with new technologies.
●Stable procurement (ensuring flexibility of
●Stable procurement (ensuring flexibility of
supply, strengthening effectiveness of
supply, strengthening effectiveness of
supply chain BCP)
supply chain BCP)
●Optimization of the supplier portfolio
●Optimization of the supplier portfolio
(thorough collaboration and competitive
(thorough collaboration and competitive
principles)
principles)
●Improvement in level of CSR management
●Improvement in level of CSR management
throughout the supply chain
throughout the supply chain
▲ P. 32
●Reduce environmental impact throughout
●Reduce environmental impact throughout
the value chain (appropriate management
the value chain (appropriate management
of environmentally hazardous substances,
of environmentally hazardous substances,
global warming countermeasures)
global warming countermeasures)
●Improvement of productivity using IoT
●Improvement of productivity using IoT
(smart factory, next-generation line
(smart factory, next-generation line
development, etc.)
development, etc.)
▲ (cid:34)(cid:7) (cid:10)(cid:17)
●Strengthening the effectiveness of BCP in
●Strengthening the effectiveness of BCP in
production (strengthening building and
production (strengthening building and
equipment tolerance, improving
equipment tolerance, improving
complementary supply capacity)
complementary supply capacity)
●Training and retention of human resources
●Training and retention of human resources
to hand down and evolve monozukuri,
to hand down and evolve monozukuri,
creation of comfortable workplaces
creation of comfortable workplaces
●Shift to production facilities and production
●Shift to production facilities and production
processes that contribute to global
processes that contribute to global
environmental conservation and CO2
environmental conservation and CO2
reduction
reduction
▲ (cid:34)(cid:7)(cid:1)(cid:11)(cid:9)
●Design and development that leverages
●Design and development that leverages
customer and market field data
customer and market field data
●Ongoing strengthening of efforts to reduce
●Ongoing strengthening of efforts to reduce
the environmental impact of logistics
the environmental impact of logistics
●Building of a supply chain that can respond
●Building of a supply chain that can respond
rapidly to demand fluctuations
rapidly to demand fluctuations
●Further improvement in customer
●Further improvement in customer
satisfaction (strengthening of channel
satisfaction (strengthening of channel
management, cultivating specialists)
management, cultivating specialists)
NSK REPORT 2020
15
NSK’s Collaborative Value Creation Process
Creating Collaborative Value with Stakeholders
NSK’s business is built on relationships of trust with its stakeholders. As a partner in the creation of collaborative value,
nurturing increasingly positive ties through two-way communication and promoting a genuine understanding of NSK’s
direction and value created is of the utmost importance.
By collaborating with each stakeholder to create a range of value, NSK aims to contribute to the resolution of
social issues while achieving sustainable growth as a company.
Collaborative Value with
Stakeholders
Environmental contribution
(low friction, high efficiency,
improvement of transmission efficiency)
Customers
Employees
Contribution to an advanced technological society
Suppliers
Realization of a more prosperous society
Local
Communities
Growth of a wide range of industries
Advancement of a mobility society
Improvement of shareholder value
Future
Generations
Shareholders
and
Investors
Sustainable Growth of NSK
Contribution to Resolve Social Issues
NSK’s 7 Key SDGs
Relationships with Stakeholders
Primary Benefits/Values, Interests,
and Expectations of Stakeholders
Examples of Themes for Further
Collaborative Value Creation
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. In addition to deepening
our understanding of the needs of manufacturers,
distributors and sales outlets, we 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.
Main Engagement Channels
(cid:12256)Everyday sales activities
(cid:12256)Technological exchanges
(cid:12256)Exhibitions
(cid:12256)Joint research/joint development, etc.
● 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
● Creating and proposing new
collaborative value from
an end-user perspective
▲ PP. 27, 29
● Proposals for supply from optimal
locations that leverage global
production sites
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.
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.
Main Engagement Channels
(cid:12256)Manager/team dialogue
(cid:12256) Objective-based management, performance
review systems
(cid:12256)Internal financial results briefings
(cid:12256)Training, self-improvement seminars, etc.
● Engaging workplaces (Respect of fundamental
rights at work, equal opportunity, creating
safe and inspiring workplaces, health and
productivity management)
● Leveraging a diverse workforce, diversity and
inclusion, work-life balance, flexibility with
working styles
● Providing opportunities for growth, self-
development and educational opportunities
● Increase opportunities for dialogue
with management, vitalize two-way
communication
▲ P. 23
● Review systems to achieve more
diverse work styles
▲ P. 30
● Promote situational understanding
and improvement activities through
regular employee engagement
surveys
● Further enhance educational and
training programs
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16 NSK REPORT 2020
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Relationships with Stakeholders
Primary Benefits/Values, Interests,
and Expectations of Stakeholders
Examples of Themes for Further
Collaborative Value Creation
● Proper, fair and transparent 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
● Ongoing maintenance and
strengthening of favorable and
strong relationships
● Enhance level of CSR management
throughout the supply chain toward
realizing a sustainable society
▲ P. 32
NSK’s businesses, which reach all corners of the
globe, as well as the competitiveness we possess, are
underpinned by numerous suppliers around the world
through the provision of superior components and raw
materials. 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.
Main Engagement Channels
(cid:12256)Daily procurement activities
(cid:12256)Procurement Policy Briefings
(cid:12256) NSK Supplier CSR Guidelines “self-diagnosis
sheet,” etc.
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.
● Mutual harmony and benefit 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
● Increasing the 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
Main Engagement Channels
(cid:12256) Activities to contribute to local communities
(donation drives, cleanup activities, etc.)
(cid:12256) Plant festivals
(cid:12256) Cooperating in community events, welfare
programs, etc.
As providers of financial capital, shareholders and
investors play a critical role in supporting NSK’s growth
and monitoring company management. 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.
Main Engagement Channels
(cid:12256) The shareholders’ meetings
(cid:12256) Plant tours for shareholders
(cid:12256) Financial conferences
(cid:12256) Business briefings
● 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
● Generating and providing 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
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.
Main Engagement Channels
(cid:12256) NSK Foundation for the Advancement of
Mechatronics
(cid:12256) NSK Scholarship Foundation
(cid:12256) Science classes for children
(cid:12256) Materials for children (comic book, picture
book and technology introduction), etc.
● 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
▲ P. 60
● Enhancing disclosure and
heightening the appeal of efforts
with regard to CSR/ESG issues
● Ongoing 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
NSK REPORT 2020
17
Special Feature:
Collaborative Value Creation and Beyond
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 creating
collaborative value with all stakeholders. With the goal of realizing this aim in mind, NSK established NSK Vision 2026 on the occasion of its
100th anniversary.
Moreover, the 6th Mid-Term Management Plan (6th MTP) continues to target “the establishment of a corporate foundation for sustainable
growth and the provision of values through evolution of Motion & ControlTM” as its vision for 2026, and is thus formulated to undertake the 3 key
management tasks of “business growth and profitability,” “utilization of robust managerial resources” and “ESG management.” The 6th MTP
is positioned as the first 3 years for realizing this vision.
Under a governance framework that raises the efficiency, flexibility and fairness of management and strengthens the supervisory
function, NSK ’s approach to 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 initiatives, the Company formulated
an SDGs Declaration that respects the spirit of the SDGs and selected NSK ’s 7 key goals based on this approach. While keeping these
7 material issues in mind, the Company has drawn up NSK ’s Declaration as strategic initiatives with more clarity. Through its business
activities, NSK will contribute to the achievement of the SDGs by continuing to create collaborative value with stakeholders.
Future Vision
NSK Vision 2026
Vision for 2026: Establish a corporate foundation for sustainable growth
Provide values through evolution of Motion & Control™
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.
Value Chain
Feedback
Sales/
Aftermarket
Business Growth and
Profitability
Utilization of Robust
Managerial Resources
R&D
Vision for 2026
P.00
Procurement
Manufacturing
Receipt of Orders
ESG Management
Mass Production
Design/
Preparation
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
The 6th Mid-Term Management Plan
Safety
Quality
Core Values
Core Values
Core Values
Core Values
Compliance
Environment
Collaborative Value
Creation with
Stakeholders
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 7 goals that are particularly interlinked with our business, which we will
place priority on tackling.
NSK’s 7 Key
SDGs
Collaborative Value with
Stakeholders
Declaration of NSK's Initiatives
Collaborative Value
Creation Cases
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 of
a mobility society
Improvement of
shareholder value
1
2
3
4
5
We will contribute to a safe and resilient social infrastructure
through innovation.
PM-Ai
We will contribute to climate change countermeasures by reducing
the impact of our business activities on the environment.
Heat treatment
process
P. 19
P. 20
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.
Railways/
Electrified vehicles
P. 21
We will form richly diverse organizations where both employee
motivation and value creation are fulfilled.
Advancement of
women
P. 22
We will enhance our dialogue through multi-stakeholder
partnerships to increase the effectiveness of our SDGs initiatives.
Open innovation/
Financial results
briefings for employees
P. 23
18 NSK REPORT 2020
Declaration of
NSK’s initiative1
We will contribute to a safe and
resilient social infrastructure
through innovation.
Smarter Maintenance with PM-Ai
Collaborative Value with
Stakeholders
Related SDGs
Advanced
Technology
Prosperous
Society
Wide-ranging
Industries
Aiming for Safer, Higher-Quality and Smarter Production Sites: Make production sites a worthwhile place for all maintenance staff
With an outside AI systems partner, NSK has developed PM-Ai, a
facility management system that incorporates the accumulation of
individual know-how and experience as NSK ’s knowledge (assets).
PM-Ai is an AI-enabled management system with a database full of
information about equipment and machinery on production lines,
manufacturing processes, past problems and ways these problems
were fixed. “PM” stands for preventive maintenance, and “Ai” is a
combination of artificial intelligence (AI) and eye (to see), while also
meaning “love” (“ai” in Japanese means love) to symbolize the care
taken in maintaining equipment and machinery. NSK aims to install
PM-Ai in all its global plants to make it possible to predict problems
and maintain equipment and machinery before breakdowns occur.
Rapid Problem-Solving Given the Experience of NSK
In 2018, NSK introduced the PM-Ai system in its Otsu plant and
Fujisawa plant in Japan. At the Otsu plant in Shiga Prefecture, more
than 10 years of past data (100,000 entries) have already been entered
into the PM-Ai system as a part of efforts to categorize past problems
in the database, in addition to information about equipment and
machinery. These data are now being weighted and correlated for
training the AI system in a bid to enhance its analytical capabilities.
By rolling out the PM-Ai system globally, our maintenance will be
smarter and faster with a greatly changed approach. In the past,
opportunities to gain experience from repairing and maintaining
facilities in other plant were limited. With PM-Ai, however, the value of
all experiences at NSK can be rapidly identified as possible solutions
for solving problems. Production lines that manufacture similar
products share many of the same equipment and processes and have
similar problems when they arise. This is where we expect the PM-Ai
system to have a significant impact. As facility maintenance activities
share a common core of know-how even across different products,
PM-Ai should have a positive impact on other product models as well.
Passing Down Technical Skills and Sharing Knowledge
With the PM-Ai system, all of the technical expertise and know-how
built up over many years by veteran maintenance personnel can be
passed down to the next generation as an asset of NSK rather than
just burying it in documentation. Our manuals for fixing problems
are no longer just written words but also include pictures and videos.
Even maintenance staff with little experience will be able to perform
maintenance while consulting a tablet connected to the PM-Ai system.
When problems arise, veteran maintenance personnel at other plants
can support local maintenance staff remotely. When conditions make
it difficult for people to travel, the time spent solving the problem can
be drastically reduced. For example, at the Fujisawa plant in Japan,
which is a mother plant to a factory in China that manufactures large
size bearings, employees can monitor manufacturing conditions
at the plant in China and provide remote support during regular
maintenance and when problems occur.
In addition to these initiatives at the Otsu plant and Fujisawa
plant, we have created a working group to energize maintenance
activities performed by younger maintenance staff at NSK plants and
the plants of affiliated companies. This working group is discussing
the best way to deploy the PM-Ai system globally at all plants, while
taking into account the distinctive and special features of each plant,
with the aim of spreading knowledge about maintenance worldwide.
Through this activity, we intend to nurture the next generation of
leaders in maintenance services.
Assisting with Shaping the Foundation for Industry and
Technological Innovation
After the PM-Ai system is installed at NSK ’s production sites,
this know-how will be shared and disseminated with partner suppliers.
It could also become a new business offered to our customers.
The PM-Ai system will help NSK employees work smarter, and it
has the potential to assist
with the shaping of a
foundation for industry and
technological innovation.
Working group for energizing
maintenance activities
On-site search for past examples
Remote support over tablets
Accumulate and share information
with pictures and videos
Future possibilities: Chat with
AI using smart glasses
NSK REPORT 2020
19
Special Feature:
Collaborative Value Creation and Beyond
2
3
Declaration of
NSK’s initiative
We will contribute to climate change
countermeasures by reducing the
impact of our business activities on
the environment.
Declaration of
NSK’s initiative
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.
Minimize the Environmental Impact from
Business Activities and
Maximize the Environmental Contribution
through Products
Target
Reduce CO2 emissions in business activities by
60% by 2050 (vs. FY 2017 level)
Offset CO2 emissions with
environmentally friendly products
Effective use of resource
99％ recycling ratio at
production bases worldwide
Reduce CO2 Emissions in Business Activities
Collaborative Value with Stakeholders
Environmental
Contribution
Prosperous
Society
■ The 6th Mid-Term Management Plan Targets (Fiscal 2019–Fiscal 2021) and Long-Term Targets
Manufacturing, technology, office
Global
FY2021
CO2 emissions*1
FY2026
CO2 emissions*1
FY2030
CO2 emissions*1
FY2050
CO2 emissions*1
7% reduction
from FY2017*2
60% reduction
25% reduction
16% reduction
from FY2017*2 from FY2017*2 from FY2017*2
Distribution
Japan
FY2021
CO2 emissions per
transportation volume
4% reduction
from FY2017*2
Related
SDGs
■ Strategy for Reducing Total CO2 Emissions in Production
1. Production technology innovation
2. Promotion of energy saving and fuel conversion
3. Expanded adoption of renewable energy
*1. The emissions coefficients for electricity are the variable market standards. The emissions coefficients, which change every year, are published by power companies with which we have contracts.
*2. The electricity emissions coefficients for the base year are the market standards for 2016. They are the emissions coefficients published by power companies based on the performance for fiscal 2016.
▲ Environmental Management P. 31
Initiatives in Heat Treatment Process: Reducing environmental load and improving work conditions for employees
Heat treatment is one of the most important processes for manufacturing bearings and other
NSK products to ensure their strength and durability. However, heat treatment accounts
for roughly 30% of CO2 emissions in the manufacturing process for the entire NSK Group in
Japan, so this process puts a significant burden on the environment. By introducing innovative
technologies, NSK has been working hard to reduce CO2 emissions. With the Manufacturing
Engineering Center collaborating with each plant, NSK has been expanding conversions from
conventional heat treatment methods that use heating furnaces fueled by kerosene and gas
to high-frequency induction heat treatment processes that run on electricity instead. The
high-frequency induction heat treatment method only heats up the product and not the entire
furnace, making it more energy efficient and slashing CO2 emissions. We are also undertaking
the following initiatives to cut CO2 emissions from conventional heating furnaces.
Coating heat-proof paint on the surface of heat treatment furnaces
Improving thermal insulation performance of heat treatment furnaces
Switching to burners with higher thermal efficiency
Improving the efficiency of heat treatment furnace operations by optimizing production methods
Furthermore, in the heat treatment process that uses heating furnaces, the heat emitted
from furnaces makes work conditions unpleasant for employees especially during the summer.
These initiatives will improve working conditions and reduce the burdens placed on workers.
NSK will continue to implement various initiatives worldwide to reduce the environmental
load and improve work conditions for its employees.
FY2019: CO2 emissions from facilities and
processes (manufacturing in Japan)
Heat treatment
32.4%
Total CO2 emissions
336×103t-CO2e
Power
29.0%
Other
6.6%
Lighting
4.3%
Compressors
12.8%
Air conditioning
14.9%
20 NSK REPORT 2020
Maximizing Our Environmental
Contribution through Products
Collaborative Value with
Stakeholders
Environmental
Contribution
Advanced
Technology
Prosperous
Society
Mobility
Society
Railways: An environmentally friendly means of transportation
Related
SDGs
Growing Need for Railways
Railways are an effective solution to the problem of air pollution and
traffic congestion in overpopulated cities. Around the world, the need
is growing for urban railway systems and high-speed rail. In Europe,
railways have established a foothold as a means of transportation
with lower CO2 emissions than airplanes and automobiles, and
new types of more comfortable, faster and environmentally friendly
trains are being developed. In rapidly growing China and Southeast
Asian countries, railway infrastructure is being upgraded alongside
economic growth, and high-speed rail connecting cities is taking off.
NSK’s Contribution
NSK bearings have been used by railways since before the Second
World War. In 1964, the first-generation 0 Series Shinkansen was
developed, marking a new era in high-speed rail. Since then, NSK’s
bearings have played an important role in improving the safety,
high-speed performance, high reliability and efficiency (reduction in
energy consumption)
of constantly evolving
rolling stock in Japan.
On July 1, 2020,
Central Japan Railway
Company commenced
commercial operations
of the N700S Shinkansen, which underwent a complete overhaul for
the first time in 13 years. Marking the start of a new era, the N700S
Series Shinkansen delivers the ultimate in safety, stability, comfort
and environmental performance. NSK’s bearings are used in all
major areas of the cutting-edge N700S Series, including the driving
gear unit (gearbox), the axle and the traction motor contributing to the
safety, comfort, reliability and environmental performance (reducing
environmental impact) of the series. Boasting a top share of the
domestic market, NSK’s track record is highly regarded in overseas
markets as well, including China and Europe. In Europe, NSK has
received an MRO order for wheelset bearings from SNCF, France’s
national railway company.
The importance of environmentally friendly railways will continue
to increase, and demand for rolling stock will likely expand in
the future. Based on our extensive know-how accumulated over
decades, we will offer a helping hand for the construction of railway
infrastructure around the world, while continuing to develop products
and technologies that keep pace with advances in rolling stock.
Traction motor
Driving gear unit
Images courtesy of
Central Japan Railway Company
Axle
Electrified vehicles: Moving toward zero environmental impact
Rise of the Electrified Vehicle Market
Growth in global automobile production volume has slowed due to
trade friction between the U.S. and China, as well as the COVID-19
pandemic. Despite this, electrified vehicles, such as battery electric
vehicles (BEVs), hybrid electric vehicles (HEVs), and fuel cell vehicles
(FCVs) are poised to grow rapidly, owing in part to the tightening of
environmental regulations (i.e., fuel economy) in various countries
and regions amid the threat posed by global environmental
degradation. Automakers have been developing electrified vehicles to
meet these environmental regulations, with the aim of reducing and
eliminating the burdens placed by cars on the global environment.
NSK’s Contribution
With the spread of electrified vehicles, needs have emerged in the
powertrain field to downsize powertrains, improve driving power and
maximum speed, and increase cruising range. NSK is addressing
these needs by proposing newly developed technologies and products
for customers.
By performing at a high-speed rotation with high durability and
efficiency, our mainstay bearings address needs for high power
output in compact and lighter motors, as well as ensuring battery
capacity for driving long distances, issues with electrified vehicles.
As new non-bearing technologies, NSK has developed a two-speed
shift transmission system for electric vehicles, a traction reducer, a
non-contact torque sensor and an electric shift actuator. We aim to
receive orders for these core components from automakers. NSK is
helping reduce burdens on the global environment by supporting the
creation of high-performance electrified vehicles.
PT issues
hindering
proliferation
NSK
proposals
powertrain
Improvement of
driving power and
maximum speed
Increase in
cruising range
Higher-speed
motor
Adoption of
transmission
Energy loss
reduction
Traction
reducer
Ultra-high-speed
ball bearings
for electric
vehicle motors
Power flow
switching
devices
Non-contact
torque sensors
Tapered roller
bearings for
lean lubrication
conditions in
electric vehicles
▲ Non-Contact Torque Sensor P. 29
Environmental Management P. 31
NSK REPORT 2020 21
21
Special Feature:
Collaborative Value Creation and Beyond
Declaration of
NSK’s initiative4
We will form richly diverse
organizations where both
employee motivation and
value creation are fulfilled.
Diversity and Inclusion Gaining
Momentum with the Advancement of
Women in the Workplace
Collaborative Value with Stakeholders
Prosperous
Society
Related SDGs
Diversity as a Driving Force of the Organization
At NSK, we believe that diversity is a wellspring of competitiveness.
Our globally shared policy is to create work environments that enable
each and every employee to maximize their unique set of strengths
and abilities. Leaders from our senior management teams in each
region have publicly committed to advancing diversity and inclusion
(D&I) in a way that aligns with local conditions.
Raising Awareness and Providing Education
Empowering women in the workplace is a key management task, and
we have made efforts to achieve this target throughout each region.
In the Americas, for example, training on unconscious biases*1
and multicultural training form a part of the region’s broad-based
activities to raise awareness of D&I. The region has also established
the NSK Americas Women’s Development Program to develop more
female leaders throughout the organization. Around a dozen women
are selected to join this program every year, where participants are
equipped with the skills and mindset necessary for leadership. In
Japan and Europe, we offer educational opportunities for female
employees to support career advancement and develop future
managerial candidates.
positions, including the plant manager, have been filled by women.
The company also holds various cultural activities, including sporting
and community gardening events. Suzhou NSK Bearings is a unique
plant in the NSK Group, and will continue to focus efforts on human
resource development to maintain its competitive edge.
Meeting between female employees and
the plant manager at Suzhou NSK Bearings
Assessments
Recognition of our initiatives in D&I and empowering women, including
the promotion of women to management positions, is reflected in
NSK’s selection as a Nadeshiko Brand*2 in fiscal 2019.
Participants in NSK Americas Women’s Development Program
Developing the Next-Generation of Leaders
Suzhou NSK Bearings Co., Ltd., a forerunner in women’s
empowerment among NSK’s manufacturing plants, produces
bearings for automotive transmissions. Suzhou NSK Bearings was
established in China as a joint venture between NSK and an American
bearing manufacturer. Even from the beginning, the plant has been
characterized by its diversity through the intersection of these 3
cultures. Since its establishment, the company has overcome various
hardships to see productivity improve greatly over the past 4 years. The
plant now has the fewest quality problems and occupational accidents
at NSK. On the personnel development front, the company hires and
trains employees with an emphasis on performance. More than 40%
of its employees are women, and just under 40% of management
Nadeshiko Brand
*1. Unconscious biases are views and opinions that individuals form outside
their own conscious awareness based on their experiences. At NSK, we
hope to welcome diverse value systems by making our employees aware of
their own unconscious biases.
*2. Nadeshiko Brand: Selected as a “Nadeshiko Brand” by Japan’s Ministry
of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange.
Each year, it is awarded to listed companies committed to promoting the
advancement and success of women in the workplace.
▲ Evolve Personnel Development P. 30
22 NSK REPORT 2020
Declaration of
NSK’s initiative5We will enhance our dialogue
through multi-stakeholder
partnerships to increase
the effectiveness of our
SDGs initiatives.
Further Creating Collaborative
Value through Deeper Dialogues
Collaborative Value with Stakeholders
Advanced
Technology
Prosperous
Society
Related SDGs
Promoting Open Innovation
Based on its accumulated technologies and products as a bearing
manufacturer, NSK searches for the seeds of new businesses and
products by proactively promoting open innovation that combines
creative technologies and ideas from different sectors and fields,
such as universities around the world, local governments and venture
firms.
The knowledge and information gained from open innovation
leads to new ideas and concepts, energizing our in-house
organizations.
We believe that collaboration with our partners accelerates the
creation of new value that satisfies expectations and needs around the
world, while helping to solve social issues and spurring our growth as
a corporation.
Examples of Open Innovation
Joint research and development through participation in the “Future Society Open by Direct
Wireless Power Transfer to EVs in Motion” research project sponsored by the Japan Science and
Technology Agency (JST)
Signing of a sponsorship contract with CARTIVATOR Resource Management, an incorporated
association that aims to make flying cars a reality
Capital tie-up with WHILL, Inc., in the next-generation personal mobility field
Participation in the ecosystem of Shonan Health Innovation Park
Financial Results Briefings for Employees
Shonan Health Innovation Park
Demonstrating the NSK manipulator system
Since fiscal 2018, NSK has held financial results briefings for employees.
After the financial results are publicly announced, executives responsible for
finance hold briefings at the head office, plants, technical divisions and sales
sites. For fiscal 2019, the briefings were held online as a measure to prevent
the spread of COVID-19. In the Q&A session after the financial results briefing,
management answers questions about the financial results, as well as a wide
range of other questions, such as about mid-term aims and investment plans,
while also listening to the opinions of employees, including their thoughts
about daily activities and expectations for management. Through direct
dialogue with directors, employees gain a deeper understanding of current
conditions and issues at NSK, as well as the value that NSK creates for society,
Financial Results
Period
Location
FY2017
May and June 2018
2Q FY2018
November 2018
FY2018
May and June 2019
2Q FY2019
November 2019
Head office, plants,
technological divisions, sales sites
Head office, technological divisions,
sales sites
Head office, plants,
technological divisions, sales sites
Head office, technological divisions,
sales sites
FY2019
July 2020
Online meetings
Number of
Worksite
16
11
13
10
fostering a sense of unity.
Each question and answer is shared companywide on a special page
set up for this purpose on the in-house intranet. Videos of the financial results
briefing and related documents are translated into English and distributed to
employees around the world via an English intranet page.
The cumulative successes of each employee lead to the creation of
corporate value and help solve social issues through our business activities.
Management is keen to achieve even better communications with employees in
a bid to raise their awareness and bring a greater sense of unity across NSK in
business operations.
Financial results briefing for employees at the Fujisawa plant
NSK REPORT 2020
23
Strategies and Performance
Progress on Strategies for 2026
NSK has raised “the establishment of a corporate foundation for sustainable growth” as its vision for 2026, the 110th anniversary of the Company’s
founding. NSK has also positioned the 6th Mid-Term Management Plan (6th MTP) as the first 3 years for realizing this vision, has put in place the
target of “building a business base and strengthening resources in preparation for the next growth phase” and is promoting a variety of initiatives.
The following is 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
Year to March 31, 2010‒Year to March 31, 2013
The 4th MTP
Year to March 31, 2014‒Year to March 31, 2016
The 5th MTP
Year to March 31, 2017-Year to March 31, 2019
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S
Responding to paradigm shifts
Reorganizing business foundation
toward net sales of ¥1 trillion
(cid:12255)Period to establish and consolidate
corporate fundamentals appropriate for a
company with sales of ￥1 trillion
(cid:12255)Continue measures to become No. 1 in
total quality
Our 3 Core Management Strategies and
Specific Measures
A.Enhancement of business-based management
(cid:12255) Sales & marketing, production and technological
divisions brought under business headquarters
management
(cid:12255) Autonomous management by integrated
business management and the clarification of
divisional responsibilities
B. Growth strategies
(cid:12255) Increase presence in emerging markets
(cid:12255) Expand environmental, infrastructure and
resource businesses
(cid:12255) Respond to technological innovation
C. Profitability improvement
(cid:12255) Proactive sales strategy (strengthen proposal-
based sales capabilities)
(cid:12255) Reorganize global production sites
(cid:12255) Accelerate new product development
In the severe business environment immediately after
the collapse of Lehman Brothers, we achieved some
measure of success focusing on emerging markets
and technological innovation.
(cid:12255)Established a production system for a
full product lineup, built an autonomous
management system within China
(cid:12255) Exceeded the MTP target for global expansion
of the EPS business
(cid:12255)Enhanced profitability following the
reorganization of the Precision Machinery and
Parts Business
(cid:12255)Advanced local production and local
procurement
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 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.
(cid:12255) 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
(cid:12255) Decrease in the Industrial Machinery Business
sales ratio
(cid:12255) Strengthening of the compliance system to
restore trust and prevent any reoccurrence
following the cartel incident
Establishing corporate
fundamentals appropriate for a company
with net sales of ¥1 trillion
(cid:12255)Establish corporate fundamentals appropriate for a
company with sales of ¥1 trillion in 2016, the100th
anniversary of NSK’s foundation
(cid:12255)Continue to implement basic strategies (focus on
profitability, growth in emerging countries, global
management)
Business Strategies
Growth with focus on profitability
(cid:12255) Growth in emerging countries
(cid:12255) Enhancement of customer and sector
strategies
(cid:12255)Production and technological innovation
capabilities
(cid:12255) Strategic alliances
Corporate Foundation
Develop management capability to handle
¥1 trillion in sales volume
(cid:12255) Enhancement of corporate governance
and compliance
(cid:12255) Reform of the business structure
(cid:12255) Advancement of global management
Basics of MTP (Priority Issues)
(cid:12255) 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.
We also worked to evolve the global
management structure and strengthen
and enhance compliance.
(cid:12255) Continue to build foundation as a company
with ￥1 trillion in sales
(cid:12255) Establish profitability not greatly affected
by business cycles or fluctuations in the
amounts of raw materials or exchange
rates
(cid:12255) Promote new products and development
in new areas
Embark on New Chapter in
Evolution Towards
Next 100 Years
(cid:12255) Initiate mid- and long-term policies for
realizing sustainable growth
(cid:12255) Introduce resources for the future
2 Pillars of the Plan
(cid:12255)Operational excellence
Constant pursuit of competitiveness
(cid:12255) Innovate and challenge
Creation of new value
Management Tasks
(cid:12255) Achieve sustainable growth
(cid:12255) Reconstruct the profit base
(cid:12255) Expand into new growth fields
Strategies by Business
(cid:12255) Industrial Machinery Business
Respond to changes in the business
environment and expand target fields
(cid:12255) Automotive Business
Reinforce the profit base and establish a
platform for future growth
Under an environment of robust demand, the
Industrial Machinery Business recovered as the
powertrain business grew during the fiscal year
ended March 2018, the second year of the MTP,
and the Company achieved sales of ¥1 trillion, as
targeted. Both operating income and net income
achieved new record highs. We also strengthened
shareholder returns that led to a total return ratio
of 57% over the 3 years.
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 U.S.-China trade friction, the business
environment 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 and released ball screws for
brakes, industrial actuators, and others to the
market while it started smart-factory model-
line operations. The steering business entered
a transitional period, making activities aimed at
returning to growth important.
We expanded initiatives to address social
issues (ESG, SDGs).
(cid:12255)Firmly achieve ¥1 trillion in sales and a
double-digit operating income margin
(cid:12255) Restart growth in the EPS business
(cid:12255)Productivity improvements leveraging ICT
Business Trends (JP-GAAP up to and including the 4th MTP, IFRS from the 5th MTP onward)
Sales
(¥ Billions)
1,000
974.9
975.3
940.0
■ Actual ■ Target
1,020.3
949.2
1,000.0
991.4
831.0
871.7
710.4 733.2
780.0
732.8
Operating Income Margin
8.5
ー Actual Target
(％)
10.0
9.7
7.8
9.1
6.9
9.6
10.0
8.0
6.1
6.1
4.4
1.9
800
600
400
200
0
587.6
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
20/3
6th
MTP
2.8
97.9 100.0
79.3
97.3
94.7
86.0
65.3
Operating Income
■ Actual ■ Target
(¥ Billions)
66.0
68.0
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
Period of 3rd MTP
Period of 4th MTP
Period of 5th MTP
23.6
20/3
6th
MTP
10
8
6
4
2
0
100
80
60
40
20
0
24 NSK REPORT 2020
The 6th MTP
Year to March 31, 2020-Year to March 31, 2022
Build Business Base and Strengthen
Resources in Preparation
for Next Growth Phase
Secure sales of ¥1 trillion and profitability
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
NSK Vision 2026
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
Utilization of robust
managerial
resources
(cid:12255)Balance
investment in
future growth
with shareholder
returns under a
stable financial
structure
(cid:12255)Personnel,
Technology,
Organization,
Information
ESG management
(cid:12255)Safety, Quality,
Compliance, and
Environment
(cid:12255)Corporate
governance
Financial Targets
The 6th MTP Targets
Sales/
Growth Ratio
Growth
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
8％ or more
Secure stable profitability
ROE
Efficiency
10％ or more ROE exceeding cost of capital
Net D/E Ratio
Equity Ratio
Financial
Stability
0.3 times
50％
Maintain an A-level credit ranking
3 Initiatives
Payout Ratio
Share buyback
Shareholder
Returns
Payout ratio
30 - 50%
Total return ratio
50%
Continue stable dividend
Acquisition of treasury shares
Agile capital policy
1 New initiatives targeting growth
Grow by delivering value that meets the needs of
a future society
▲ PP. 27, 29
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 personnel development
2. Evolve manufacturing (Monozukuri)
3. Evolve technology development
4. Utilize digital technology
3 Contribute to the environment and society
▲ PP. 31-33
▲ P. 30
Address environmental and societal issues by strengthening
managerial resources and NSK’s core values + corporate
governance
Capital Expenditures
(3-year total)
Capital
Expenditures
R&D Expenses
R&D
¥180.0 billion
Investments to underpin sustainable growth
vs. Sales
3-4%
Continue developing technologies for
further growth
Non - Financial Targets
Greenhouse
Gases
(GHG)
Emissions
Reductions
7% reduction
(global)
Environment
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
Promoting
the Advancement
of Women
(Japan)
Diversity and
Inclusion
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.
ROE
(％)
20.0
15.0
10.0
5.0
0
ー Actual Target
Net D/E Ratio
(Times)
1.0
ー Actual Target
14.0
15.3
14.9
13.9
10.3 10.6
13.0
10.4
9.9
10.0
9.2
5.2
2.0
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
3.3
20/3
6th
MTP
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
0.28
20/3
6th
MTP
NSK REPORT 2020
25
Strategies and Performance
Progress on Strategies for 2026
Industrial Machinery Business
Business Overview
The Industrial Machinery Business is
involved in operations related to 2 product
categories, namely industrial machinery
bearings and precision machinery and
parts. The industrial machinery bearings
business comprises 3 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
Guides™ that play an important role in linear
motion and mechatronic products such as
XY Tables and Megatorque Motor™ that
employ ultra-high precision positioning and
controlling technologies. In this way, the
Company supports a wide range of fields,
including machine tools, injection molding
machines, industrial robots, semiconductor
and LCD production equipment, conveying
machines and medical devices.
Leveraging the synergistic effect of
bearings and precision machinery, NSK is
developing new proposals that will contribute
to the greater performance of industrial
equipment, as well as sophisticated solutions
based on the Condition Monitoring System
(CMS) for greater machinery and equipment
reliability and preventive maintenance.
Industrial Machinery Bearings
Aftermarket
(Maintenance)
40%
General
Machinery
OEM
43%
Sales
¥189.8 billion
(Year ended
March 31,
2020)
Electrical and IT Equipment 17%
Precision Machinery and Parts
Other 40%
Machine Tools
and Injection
Molding
Machines
35%
Sales
¥42.6 billion
(Year ended
March 31,
2020)
Semiconductor and
LCD Production Equipment 25%
Business Environment
A Look Back at the Business Conditions for the Year ended March 31, 2020,
and the Forecast for the Year ending March 31, 2021
Overall sales in the Industrial Machinery Business decreased year-
on-year due to a sustained cautious stance toward capital expenditure
against the backdrop of trade friction between the U.S. and China,
continued sluggish demand in the smartphone and automotive
markets, and stagnant economic activities in each region due to the
global spread of COVID-19.
Looking at the segment’s results by geographic breakdown, sales
in Japan continued to decrease year-on-year, primarily in the machine
tools sector. In the Americas, overall sales declined due to decreased
demand in the electrical sector, while sales in the aftermarket
sector increased. In Europe, sales declined due to a decrease in the
electrical sector as well as products for general industrial machinery.
Sales in China decreased due to sluggish demand in the electrical
and machine tools sectors, while sales in the wind power and railcar
sectors rose. In other Asian countries, sales declined in Korea and
Taiwan, primarily in the aftermarket and machine tools sectors.
As a result, sales in the Industrial Machinery Business totaled
¥232,470 million (year-on-year decrease of 13.9%). Operating income
was ¥14,102 million (year-on-year decrease of 57.1%), as sales fell in
each region, centered on Japan.
The market environment has been challenging lately for the
business, but the Company will continue to flexibly address changes
in demand trends. As needs grow in society for IoT, robotics and
renewable energy, 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.
Sales
(¥ Billions)
300
200
100
0
26 NSK REPORT 2020
■ Industrial Machinery Bearings
■ Precision Machinery and Parts
Operating Income/Operating Income Margin
266.2
270.0
57.4
59.7
226.9
42.7
232.5
42.6
220.0
40.5
184.3
208.9
210.3
189.8
179.5
17/3
18/3
19/3
20/3
21/3 (Forecast)
(¥ Billions)
60
■ Operating Income (left)
- Operating Income Margin (right)
50
40
30
20
10
0
12.2
32.9
10.6
28.3
6.5
14.7
6.1
14.1
2.7
6.0
17/3
18/3
19/3
20/3
21/3 (Forecast)
(％)
15
12
9
6
3
0
1
New Initiatives Targeting Growth
New Businesses Utilizing NSK’s Condition Monitoring Technology
Changes are afoot in monozukuri (manufacturing) amid
diversifying and splintering consumer and user preferences,
while cracks have emerged in the social structure with a
shrinking workforce population amid falling birthrates and
an aging population, a shortage of veteran engineers and
rising labor costs. These changes in monozukuri have been
accelerating as companies deploy IT and digital technology in
manufacturing processes to create automated and autonomous
smart factories that improve productivity and product quality.
Making manufacturing processes smarter entails the
gathering and analysis of various data in the manufacturing
process, such as data on the condition of machinery and
equipment and data on the quality of products. Such data
must be used to find improvements and optimal solutions
in each target area and create a cycle of feedback into each
manufacturing process. Predictive maintenance prevents
problems from occurring by discovering abnormalities and
failures at an early stage through the constant monitoring of
equipment, machinery and production lines. Expectations are
increasing for predictive maintenance as a newly advanced
maintenance method that takes advantage of IT and digital
technology, instead of breakdown maintenance and preventive
maintenance. NSK’s core products, such as bearings, ball
screws and linear guides, are key components that support the
functionality and performance of equipment and machinery.
Technologies for monitoring the operational condition of
these components, and for identifying and diagnosing signs
of abnormalities and causes of failure at an early stage are
key technologies for the predictive maintenance of equipment
and machinery. As a developer and manufacturer of these
components, NSK is keen to launch new businesses that
help customers improve the productivity of equipment and
machinery and product quality by leveraging these technologies
and knowledge. As a first step in this endeavor, NSK
established the Condition Monitoring System Development
Center in April 2019.
This new business aims to help our customers improve the
productivity of equipment and machinery and product quality
through the provision of solution services that identify and solve
issues and problems with their equipment and machinery,
starting with technology services that evaluate remaining
useful life based on the degree of degradation of equipment
and machinery, and services for detecting and diagnosing
signs of failure and degradation at an early stage, while
monitoring the conditions of the equipment and machinery at
our customers. We believe this is an initiative that embodies
the concept of prognostics and health management (PHM) in
the manufacturing industry and has gained attention in recent
years.
Picture of a New Business Utilizing NSK’s Condition Monitoring Technology
Condition monitoring and
detection of
failure or degradation
● Visualize operating condition
● Detect signs of trouble at an early stage
Failure diagnosis
● Identify points of failure
● Identify type of failure
● Estimate extent of failure
Remaining useful
life diagnosis
● Identify points of degradation
● Estimate degree of degradation
● Predict rate of degradation
Technology
services
Help customers manage
the health of their equipment
and machinery
(productivity and quality improvement)
Solution
services
We intend to broadly develop this new business for the factories, production lines and machinery of our customers in the
manufacturing industry. In addition to developing the business on its own, NSK is preparing to develop the business further in
partnerships with other companies involved in managing the health of equipment and machinery. We have been developing software
(ACOUS NAVI™) for detecting and diagnosing failures in bearings, ball screws and linear guides, as well as tools for estimating their
remaining useful life. At the same time, NSK is building systems and a structure for providing solution services.
NSK REPORT 2020
27
Strategies and Performance
Progress on Strategies for 2026
Automotive Business
Business Overview
Comprising the 2 categories of automotive
bearings and automotive components,
the Automotive Business delivers various
products that support the 3 critical elements
of automobiles, namely running, turning and
stopping.
Automobiles utilize many different types
of NSK bearings, including hub unit bearings
and needle roller bearings. As automobiles
have evolved, automotive bearings have come
to demand a greater level of performance,
including less friction loss, smaller size,
lighter weight, higher speed and less noise.
Through more sophisticated automotive
bearings, including bearing grease and
seals that leverage its core technologies of
tribology, materials and numerical simulation,
NSK continues to develop products that
contribute to the evolution of automobiles.
Meanwhile, in the automotive component
field, NSK delivers a wide range of core
functional components, including electirc
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.
Automotive Bearings
Other 51%
Hub Unit
Bearings
29%
Sales
¥313.3 billion
(Year ended
March 31,
2020)
Needle
Roller
Bearings
20%
Automotive Components
Automatic
Transmission
Components
26%
Sales
¥260.5 billion
(Year ended
March 31,
2020)
Steering Products 74%
Business Environment
A Look Back at the Business Conditions for the Year ended March 31, 2020,
and the Forecast for the Year ending March 31, 2021
The Automotive Business environment is in a very serious situation
as a whole. This is mainly because the global automotive markets,
primarily in China and Europe, slowed and global automotive
production volume decreased due to COVID-19. Moreover, sales of
EPS systems decreased due to vehicle model changes. As a result,
overall sales in the Automotive Business decreased year-on-year.
Looking at the segment’s results by geographic breakdown, sales in
Japan decreased due to a decline in the EPS business and lower demand of
products for AT systems against the backdrop of a slowdown, primarily in the
Chinese market. In the U.S., overall sales declined due to lower EPS sales
year-on-year, while sales of products for AT systems increased, owing to sales
expansion activities. In Europe and China, stagnant vehicle sales worsened
further due to the effects of COVID-19. Particularly in China, the business
environment in the automotive market is in a tough spot. In addition to sluggish
monthly vehicle sales, which continued to decrease year-on-year, the economy
became stagnant at the end of the fiscal year. Sales in other Asian countries
such as India also declined resulting from stagnant markets.
As a result, sales in the Automotive Business totaled ¥573,814
million (year-on-year decrease of 16.8%). Operating income was
¥9,804 million (year-on-year decrease of 78.2%), reflecting lower sales
in all regions including China and Japan.
Although the outlook is uncertain for the global automobile
market, in the Automotive Business, NSK aims to expand the
powertrain business by addressing the need for the electrification
of automobiles, as well as multi-step AT and the rising percentage
of automobiles with AT. The Company is also focusing on electric
brake systems, which look likely to become mandatory in vehicles,
and restarting growth in the steering business. Moreover, NSK will
contribute to electrified and autonomous driving cars, and other
automobile-related technical innovation by employing existing
technologies and new technologies to be developed in the future.
We will also work to improve profitability by raising productivity and
reducing fixed costs.
Sales
(¥ Billions)
800
600
400
200
0
28 NSK REPORT 2020
■ Automotive Bearings
■ Automotive Components
Operating Income/Operating Income Margin
696.3
723.6
689.7
368.3
372.6
340.8
573.8
260.5
328.0
350.9
348.9
313.3
480.5
206.5
274.0
17/3
18/3
19/3
20/3
21/3 (Forecast)
(¥ Billions)
100
■ Operating Income (left)
Operating Income Margin (right)
80
60
40
20
0
-20
9.3
9.1
64.6
66.0
6.5
44.9
1.7
9.8
-3.5
-0.7
17/3
18/3
19/3
20/3
21/3 (Forecast)
(％)
10
8
6
4
2
0
-2
1
New Initiatives Targeting Growth
Powertrain Business
Non-Contact Torque Sensor: Contributing to the spread of high-performance electrified vehicles
(cid:12255) Sensor used to measure torque without contact while
helping to deliver shock-free speed
Automobiles have a variety of sensors installed to improve safety and
comfort and reduce the environmental load. These sensors enable
advanced controls while monitoring the state of the automobile.
The power of engines and motors is conveyed to tires through drive
shafts. To improve comfort and safety, reduce environmental impact,
and even detect abnormalities or malfunction in the vehicle, it is
necessary to measure the torque in the drive shaft and optimally and
efficiently transmit power. Existing drive shaft torque sensors have
complex structures and large sizes, which create several problems
when they are used in mass-produced vehicles. NSK has developed
Product Features
a new non-contact drive shaft torque sensor with a simpler structure
that prevents friction from contact with the drive shaft. Using the
special method of wrapping the sensor coil, the torque sensor is more
compact at half the width of the unit. Furthermore, this torque sensor
can be easily mass produced because it does not require grooves,
coatings, or other special shaft processing.
1. Better fuel economy (Lower Power Consumption)
2. Smooth and comfortable ride
In two-speed transmission EVs, NSK's
torque sensor can help deliver shock-
free gear shifting enabling the use
of a larger step ratio to deliver a 7%
increase in fuel economy.
The torque sensor can be used to achieve a super
smooth and pleasant ride through advanced
control that softens fluctuations in torque when
changing gears and accelerating/decelerating. By
constantly monitoring or tracking torque using
data from the torque sensor, it will be possible to
predict and identify issues and abnormalities.
Non-contact
torque sensor
for drive shafts
in motor vehicles
Steering & Actuator Business
Ball Screw Units for Electric-Hydraulic Brake Systems: Expanding production capacity on forecasts for stronger demand
(cid:12255)New ball screw units for advanced braking systems
From fiscal 2019, NSK started mass-producing ball screw units
for electric-hydraulic brake systems at its Akagi plant in Gunma
Prefecture, Japan, in addition to its Saitama plant. This reflects the
increase in global demand with regulators standardizing or mandating
that new vehicles be equipped with automatic emergency braking (AEB)
systems.
Ball screws for electric-hydraulic brake systems are used in
brake boosters that help reduce the amount of force that drivers need
to apply to the brake pedal in order to stop the vehicle. In the past,
the suction of negative pressure created by the engine was used to
enhance brake pedal pressure. However, by using a ball screw and an
electric motor, the brakes can be applied even before the driver steps
on the pedal. Part of the reason for this trend toward electrification
Product Features
is the proliferation of vehicles with smaller engines or electrified
vehicles with no gas engines. Moreover, AEB systems are becoming
more popular from a safety standpoint. Compared with other kinds
of electric brake boosters, including the slide-screw-type, the ball-
screw-type has a smoother motions and is more responsive. With
the sophistication of electric braking systems likely to increase, we
believe the ball-screw-type, which enables rapid and powerful braking
is optimal for vehicles.
1. High-speed responsiveness
2. Compact and lightweight
The ball screw has balls positioned
between the screw and the nut, enabling
smooth motion. This allows motor rotations
to be immediately and directly converted
into linear motion, shortening the time
needed for braking to have an effect once
an object is detected.
Leveraging our know-how and insight
in both technologies and production
for bearings and ball screws, we
have developed a smaller and lighter
unit featuring integrated ball screw
structural components, as well as an
integrated support bearing.
Ball screw units for
electric-hydraulic brake systems
NSK REPORT 2020
29
Strategies and Performance
Progress on Strategies for 2026
2
Enhance Managerial Resources
Evolve Personal Development
NSK’s Approach
In our Management Principles, NSK clearly states that our aim is “to provide challenges and opportunities to our employees, channeling their skills and fostering their creativity
and individuality.” In acknowledgment of the fact that each 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.
(cid:12255)The 6th Mid-Term Management Plan Targets and Fiscal 2019 Targets and Results
Policy
The 6th Mid-Term
Management Plan Targets
Fiscal 2019 Targets
Fiscal 2019 Results
Raise awareness of diversity and inclusion
Continue supporting women in career-track
positions
Held seminars on three key themes: women empowerment, management and
LGBT
Started third round of training for women in career-track positions
Paternal leave acquisition rate of 20%
Achieved paternal leave acquisition rate of 26%
Leveraging a diverse
workforce
Promote more diversity and
inclusion
Create a work environment that empowers
foreign nationals working in Japan
Raise awareness of LGBT-related issues
Raise external awareness of our initiatives to
promote diversity and inclusion
Promote work style reform
Expand remote work
Introduced bilingual signage
・Distributed ALLY stickers
・Conducted training and seminars
・Selected as Nadeshiko Brand
・ Retained Kurumin accreditation (certification recognizing
companies with parent-friendly HR policies and programs)
・ Participated in Telework Days 2019
(Japanese government campaign to encourage remote work)
・Gradually expanded remote work by setting NSK’s own remote work periods
Building more engaging
workplaces
Promote health and
wellness
Work style reform in sales divisions
Tried out satellite offices to reduce travel times when visiting customers
Raise external awareness of our initiatives to
improve the health of employees
Retained certification as an Outstanding Health and Productivity
Management Organization (White 500)
Conduct activities to improve health awareness
among employees
Held a health fair
Providing opportunities
for growth
Support the career advancement of
each and every employee
Develop the next generation of
global leaders
・Implemented mentorship program for employees newly promoted to core posts
・ Implemented a leadership program for select employees through collaboration
with a major business school
Expand selective training
Set up a new assistant manager course of the Japan Management College
Examples of Other Initiatives in Fiscal 2019
Support for Family Caregivers
In order to support our family caregivers, we have run caregiving seminars since 2017, providing a place for employees to seek advice on balancing work with family
commitments. In fiscal 2019, basic courses for employees aged 40 and older were held a total of 25 times across NSK sites, and they were attended by around 550
employees. Courses for managers were held 7 times with about 150 people attending. In addition, we offered 2 targeted courses with content more advanced than the
basic courses.
To improve our ability to respond to concerns from employees, we began to publish a monthly caregiving e-mail magazine and hold seminars for HR representatives.
Global Management College
Since 2011, the Global Management College has provided an opportunity for high-potential employees from across
global NSK to develop their leadership abilities through a 6-month course on management. Through the program,
participants travel to several NSK sites worldwide, visiting plants and office locations to learn more about each
region’s business strategy. While gaining a deeper understanding of global NSK, participants are also exposed to
diverse cultures and have the chance to expand their internal network.
In fiscal 2018, the 8th year of the college (graduating in 2019), a total of 13 employees participated from the U.S.,
Canada, Germany, France, China, Singapore, India, Thailand, South Korea and Japan. Group sessions were held at
4 locations in Japan, South Korea, Indonesia and the U.S. There are 99 graduates of the program to date, who are
now serving in positions of leadership throughout global NSK. Our Senior Vice President and Head of All Chinese
Operations is a 3rd-year graduate of the college, and the Vice President and Head of CSR Division Headquarters
graduated in the college’s first year.
President Uchiyama and graduates from
the 8th session (Team B)
▲ Interviews with Regional Management (China) P. 45
Completion of the Global Training Center
NSK sees human resources as the foundation of its business. We aim to globally develop human resources who are responsible for the
Company’s growth and promote innovation of the future NSK Group. As part of this, we completed the Global Training Center (GTRC)
building in March 2019, which became a base for human resource development in the technical field. The GTRC primarily hosts classes
by the NSK Institute of Technology (NIT), an educational institution in the technical field established in 2007. Going forward, we will
promote the development of other human resources in such fields as manufacturing and sales as well as conducting seminars for career
development with each department promoting the education of human resources who collaborate across national borders. In addition, we
hold science classes for local elementary and junior high school students to nurture the next generation as part of our social contribution
activities. Looking ahead, we will also provide classes for university students so that they can learn about bearing engineering and
tribology, in a bid to hand down mechanical engineering knowledge to the next generation.
Outside view of GTRC
For more information and details of our other initiatives, refer to the Special Feature (P. 22), NSK’s website: Home＞Sustainability＞Creating a Dynamic Work Environment
https://www.nsk.com/sustainability/hr/index.html, and the Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
!
!
30 NSK REPORT 2020
3
Contribute to the Environment and Society
Environmental Management
NSK’s Approach
NSK’s mission statement is to contribute to a safer, smoother society and help protect the global environment through its innovative technology integrating Motion & Control™.
The environment is one of our core values. We aim to contribute to the realization of a sustainable society and improvement in NSK’s corporate value through initiatives to
maximize environmental contributions through products and reduce the environmental impact from our own business activities based on NSK’s mission statement.
(cid:12255)The 6th Mid-Term Management Plan Targets and Fiscal 2019 Targets and Results
Long-Term Objectives
The 6th Mid-Term Management Plan Targets
Fiscal 2019 Targets
Fiscal 2019 Results
Contribute to a low-carbon
society
Contribute to a sound material-
cycle society
Contribute to a natural
symbiosis society
Avoid 2 million t-CO2 or more emissions at the stage of use of NSK’s products 1.7 million t-CO2
1.57 million t-CO2
Reduce CO2 emissions in manufacturing, offices and technology centers by
7% versus fiscal 2017 levels
3% reduction
11.8% reduction
Reduce waste per unit by 4% versus fiscal 2017 levels
2% reduction
15.8% increase
Recycling ratio of 99% or higher
98.7% or higher
98.6%
Expand social contribution activities related to biodiversity conservation
Continued activities
Continued activities
Examples of Initiatives in Fiscal 2019
Initiatives to Maximize Contributions to CO2 Emission Reduction
Bearings and other NSK products reduce friction loss, which helps customers
conserve energy when NSK products are used. When NSK advances its products
and reduces friction loss further, it contributes to the reduction of CO2 emissions
when its products are used in final products, such as automobiles and home
appliances. Moreover, the development and production of bearings used in wind
power generators facilitates growth in the use of renewable energy.
Category
Examples of Contributions
Contribution by improving
base performance (improving
performance of NSK’s products)
(cid:12255)Reduction in friction loss
(cid:12255)Downsizing due to longer operating life
(cid:12255)Smaller and lighter weight
Contribution to energy
diversification applications (coping
with new technological fields)
(cid:12255)Shift from hydraulic to electric
(cid:12255)Spread of renewable energy
(cid:12255)Development of new environmentally friendly products
Maximize reduction of CO2 emissions
Contribution to energy diversification applications
Improvement of base performance
High efficiency
Shift toward electric
(vehicles)
Renewable
energy
Long (operating) life
Bearings
Compact and lightweight
Precision
machinery
and
parts
Automotive
components
In addition to its NSK Eco-efficiency Indicators (Neco), NSK evaluates its contribution to reducing CO2 emissions in the product-use stage from two
angles, comprising improvement in base performance and contribution to energy diversification applications. To maximize this, not only did NSK work
to improve the performance of individual products, but the Company also promoted collaboration across development, design, manufacturing and sales
divisions throughout the product supply chain. In fiscal 2019, our contribution to reducing CO2 emissions was 1.57 million tons, a year-on-year increase
of 130,000 tons. Sales of products that contribute to the reduction of emissions accounted for around 35% of total sales.
Developing Environmentally Friendly Products
The development of environmentally friendly products requires
a good balance between diverse factors, including service life,
performance, product weight and power consumption. However,
there are many trade-offs that must be considered. For this
reason, in fiscal 2008, we introduced the NSK Eco-efficiency
Indicators (Neco) as a standard for comprehensively evaluating the
contributions of our products to the environment. The Company
aims to increase the Neco score of developed products.
In fiscal 2019, 6 new environmentally friendly products were
developed with Neco scores of at least 1.2.
Neco =
Product value V (product life, performance, other)
Environmental impact E
(product weight, power consumption, other)
Product value UP
Environmental impact DOWN
Neco UP
Neco UP
Newly developed
product
Environmentally friendly
products
Existing
NSK product
1
Existing
NSK product
1
Newly developed
product
Examples of Products Developed in Fiscal 2019
Ultra-high-speed ball bearing for
EV motors
Neco score 1.3
Technology developed by NSK
(cid:12255)Low-heat generating grease
(cid:12255) Cage with new shapes and
materials
Contributions for customers
(cid:12255) Smaller and lighter weight
(resource conservation)
(cid:12255)Greater reliability
Product value V
Environmental impact E
https://www.nsk.com/company/
news/2020/0318a.html
Endorsement of TCFD Recommendations
NSK announced its endorsement of the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations.
In accordance with the recommendations of the TCFD, NSK will identify
business risks and opportunities, adapt management plans and enhance
information disclosure with the aim of contributing to both the sustainable
development of society and the sustainable growth of NSK. NSK aims to use this
endorsement as an opportunity to take its environmental activities to the next level.
TCFD: TCFD is the acronym for the Task Force on Climate-related Financial
Disclosures established by the Financial Stability Board (FSB) in 2015 to
promote the disclosure of climate-related financial information.
In 2017, the TCFD released its latest report recommending that corporations
disclose information on climate change–related risks and opportunities that
impact finance, in order to facilitate the investment decisions of investors.
For more information and details of our other initiatives, refer to the Special Feature (PP. 20-21), the Non-Financial Highlights (P. 38), NSK’s website: Home＞Sustainability＞Environmental
Activity https://www.nsk.com/sustainability/environment/index.html, and the Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
!
!
NSK REPORT 2020
31
Strategies and Performance
Progress on Strategies for 2026
3 Contribute to the Environment and Society
Safety Management
NSK’s Approach
NSK has positioned safety as one of its core values. While continuously striving to further increase employee awareness, employees rely on safety as the basic
judgment for all their actions. To protect the safety and health of every employee, and to guarantee the safe conduct of all employees, NSK is implementing
various measures based on its Safety Philosophy. Never content with the status quo, NSK is constantly working to further raise the level of safety.
(cid:12255)The 6th Mid-Term Management Plan Targets and Fiscal 2019 Targets and Results
Policy
Prevention of fatal and
serious accidents
The 6th Mid-Term
Management Plan Targets
Each production site manages its
own PDCA cycle for identifying
dangerous spots and their
improvement
Fiscal 2019 Targets
Fiscal 2019 Results
Raise the level of STOP6+2 activities and realize
self-driven initiatives in identifying and reducing
risks at each site
Manuals and evaluation sheets used at each site; achieved self-driven
initiatives through visualization of activities to reduce dangerous spots
Enhance safety management of
outside contractors
Improve the level of rule guidebook use
for construction by outside contractors
Introduced the latest version of our rule guidebook for construction by outside
contractors and created a web-based system for managing construction
Train and implement behavior
that increases safety awareness,
including KYT* and the safety
practice of pointing and calling
Increase the amount of time employees spend
thinking about safety and continue to raise
the level of activities aimed at increasing each
employee’s awareness toward safety
Practiced Safety Contact in each division; shared opportunities to think about
safety from new perspectives at every meeting
Increasing safety
awareness
Prevention of accident
reoccurrence
Further enhance safety
management through continuous
ISO 45001 certification
Newly establish the Safety and Fire
Prevention Training Center and
foster an advanced safety culture
Expand the “Look Across Activities”
to operators on the shop floor
(seeing accidents at other sites as
relevant to one’s own workplace
and learning lessons from those
accidents)
Identify risks through risk
assessment of equipment and
work procedures and implement
countermeasures for those risks
Acquire ISO 45001 certification at 3 sites
in Japan and 8 global sites
Obtained ISO 45001 certification and began implementing it at
3 sites in Japan and 8 global sites
Take all preparatory steps to open the Safety and
Fire Prevention Training Center in 2020
Decided on procedures for operating the Safety and Fire Prevention Training
Center; finished preparations to start training
Advance the “Look Across Activities” up
to the operator level
Started implementing the use of “Look Across” sheets in Japan and started
an evaluation system for improvement suggestions overseas; advanced “Look
Across Activities” to the individual operator level
Implement, identify and evaluate risks of existing
equipment through risk assessments and
countermeasures
Conducted risk assessments of existing equipment according to the
risk assessment plan and promoted countermeasure implementation
*KYT: Kiken Yochi (hazard prediction) Training
Examples of Initiatives in Fiscal 2019
NSK makes a concerted effort to create a corporate culture that places safety as its first priority among all employees working at its business sites. We have created our own
occupational health and safety management system that complies with laws and regulations concerning occupational health and safety, as well as guidelines set forth by
international certification bodies. In addition, we speedily share with all global sites any occurrences of accidents and measures to prevent similar accidents from recurring.
In fiscal 2019, we moved toward obtaining international certifications for occupational health and safety management, resulting in 3 sites in Japan and 8 global sites
obtaining ISO 45001* certification. We plan to obtain certifications at more sites around the world in fiscal 2020.
*ISO 45001: The international standard covering occupational health and safety management systems issued by ISO in March 2018.
For more information and details of our other initiatives, refer to NSK’s website: Home＞Sustainability＞Creating a Dynamic Work Environment
https://www.nsk.com/sustainability/hr/index.html, and the Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
!
!
Supply Chain Management
NSK’s Approach
NSK is supported by many suppliers. We consider suppliers to be essential business partners, and will seek mutual development while
building relationships of trust.
(cid:12255)The 6th Mid-Term Management Plan Targets and Fiscal 2019 Targets and Results
Policy
The 6th Mid-Term
Management Plan Targets
Fiscal 2019 Targets
Fiscal 2019 Results
Ensuring stable supply
and optimizing supplier
portfolios
Stable procurement
BCP audit (40 companies)
BCP: Audited 40 suppliers in fiscal 2019
(total 73 suppliers since fiscal 2018)
Sustainable and responsible
procurement
Follow-up activity to the CSR audit
conducted by a third party in fiscal 2018
CSR: Based on fiscal 2018 audit results,
follow-up action was undertaken for 5 suppliers.
32 NSK REPORT 2020
Quality Management
NSK’s Approach
With quality as one of its 4 core values, NSK aims to become “No. 1 in Total Quality.” In other words, we are working to achieve the industry’s best quality in everything we
deliver̶not only products and services but also information. We believe that this commitment to quality ensures that our products will satisfy customers all over the world.
To achieve its Quality Assurance Vision 2026 (100% quality products that put the customer first), we engage in activities based on the Three Pillars of NSK Quality Assurance.
(cid:12255)The 6th Mid-Term Management Plan Targets and Fiscal 2019 Targets and Results
Three Pillars of
NSK Quality Assurance
The 6th Mid-Term
Management Plan Targets
Fiscal 2019 Targets
Fiscal 2019 Results
1. NSK Product Development
System (NPDS)
This is NSK’s proprietary quality
management system for quickly
transforming new orders into
reliable, stable production.
2. NSK Quality No. 1
(NQ1) Program
NSK is promoting initiatives to
realize stable production and
ensure zero defects.
(cid:12641) Verify performance with a
complete grasp of the level
and conditions required by
the market
(cid:12641)Improve field quality
(cid:12641)Improve procurement quality
(cid:12641) “Dantotsu” improvement
activities (ongoing activities
for zero defects)
(cid:12641) Identify front-line (gemba)
4Ms* quality risks, review
good product conditions
(cid:12641) Enhance reoccurrence prevention
3. Human Resources
Development
NSK is promoting human
resources development to build
a stronger foundation for quality
creation.
*4Ms: Man, Machine, Material and Method
(cid:12641) Foster quality-first human
resources development
(cid:12641) Strengthen NPDS activities
(cid:12641) Reduce loss costs from defects
(cid:12641) Prevent quality problems at customers
caused by suppliers
(cid:12641) Prevent irregular procedures attributable
to a lack of process capability
(cid:12641) Address kakotora (quality problems
experienced in the past)
(cid:12641) Thoroughly disseminate the standards for each process
(cid:12641)Enhance awareness of quality
(cid:12641)Reflect customer needs in specifications
(cid:12641) Improve communication between design
and manufacturing departments
(cid:12641) Unify the activities of regional quality
assurance departments
(cid:12641)Enhanced design reviews
(cid:12641) Created a platform for global design kakotora
(quality problems experienced in the past)
(cid:12641) Developed a platform for systemizing field quality
concerns
(cid:12641)Established the Global Quality Audit Office
(cid:12641)Improved quality to keep defects at zero
(cid:12641)Established the Supplier Quality Audit Group
(cid:12641) Promoted activities to improve supplier quality
(standardized evaluations/audits)
(cid:12641) Review of customer quality problems/
action to prevent recurrences
(cid:12641) Optimized Quality Investments
(cid:12641) Established “Quality-Dojo” globally
(cid:12641) Improved communications
(weekly reporting system, regional meetings)
Examples of Initiatives in Fiscal 2019
NSK conducts a variety of educational courses to train personnel who support
high-quality manufacturing. Through collaboration across divisions, we are keen
to create high-quality products and services that satisfy our customers. In fiscal
2019, we created areas called Quality-dojo in each plant. This Quality-dojo has a
globally unified structure and aims to develop comprehensive human resources
in manufacturing.
6 Key Items
① Importance of quality, Vision 2026
② Product knowledge
③ Kakotora (quality problems
experienced in the past)
④ Procedure manuals
⑤ Dimension and accuracy
measurements, visual inspections
⑥ Nonconformity, abnormalities and
defective product control
plants: 17 plants in Japan and 40 plants overseas (2 in South Korea, 11 in China, 9 in the U.S., 6 in Europe, 7
in the ASEAN region and 5 in India). The Quality-dojo is tasked with training all employees on 6 key items determined by the Quality Assurance Division
Headquarters. In fiscal 2019, we focused efforts on setting up the Quality-dojo and creating an educational curriculum.
Quality-dojo is a special area that NSK plans to set up inside all of its major
Quality-Dojo at Ohtsu Plant (Japan)
For more information and details of our other initiatives, refer to NSK’s website: Home＞Sustainability＞Creating Quality to Earn the Confidence of Society
https://www.nsk.com/sustainability/qa/index.html, and the Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
!
!
Examples of Initiatives in Fiscal 2019
NSK asks suppliers to perform CSR self-assessments and monitors their operations every 2 years. We feedback audit results to our suppliers.
In the last audit in fiscal 2018, we initiated steps to reduce risk and added assessment items on such areas as the status of compliance with labor
and environmental laws and the occurrence of environmental pollution accidents and workplace accidents. In the second half of fiscal 2020, NSK plans
to review the content of the assessment based on the results of a CSR audit conducted at suppliers in China by a third-party organization in accordance
with Responsible Business Alliance (RBA) standards.
CSR Audit in China
In 2018, a CSR audit based on RBA standards was conducted at five Chinese suppliers by a third-party organization, focusing on the following: labor,
ethics, safety and health, the environment and management systems.
As a result, some issues were found in safety areas (e.g., maintenance of fire extinguishers, set-up of evacuation routes, etc.) and labor
management (e.g., working time management such as overtime and holidays). In fiscal 2019, we visited these suppliers and requested that they improve
these points. We continue to monitor how suppliers react or progress.
For more information and details of our other initiatives, refer to NSK’s website: Home＞Sustainability＞Supply Chain Management
https://www.nsk.com/sustainability/supplier/index.html, and the Sustainability Report https://www.nsk.com/sustainability/csrReport/index.html
!
!
NSK REPORT 2020
33
Strategies and Performance
Financial Strategy / Policy on Shareholder Returns
Looking Back on the Financial Results of the Year ended March 31, 2020
The year ended March 31, 2020 saw a decline in ROE due to lower sales and profits. This in turn reflected a stagnant global economy on the back of prolonged
trade friction between the U.S. and China as well as the impact of the COVID-19 toward the end of the fiscal year. Despite this, indicators of NSK’s financial health,
including its ratio of net worth to total capital, net D/E ratio and A-level credit rating, all continue to perform well. Notwithstanding the uncertainty surrounding the
spread of COVID-19, NSK maintains the necessary financial base to ensure its continued operation as a going concern.
Mar/2019
Mar/2020
Comparison
Evaluation and Comments
Total assets
¥1,086.5 billion
¥1,029.9 billion
-56.6 billion
Total equity attributable to owners of
the parent (Shareholders’ equity)
¥536.7 billion
¥505.5 billion
-31.2 billion
Cash and cash equivalents
¥130.0 billion
¥137.3 billion
+7.3 billion
The scale of sales decreased due to trade friction between the U.S. and
China and the impact of COVID-19
Despite posting net income, other components of equity (foreign currency
translation adjustments) decreased
Secured an appropriate level of liquidity on hand as a COVID-19
emergency measure
Interest-bearing debt
¥274.8 billion
¥279.2 billion
+4.4 billion
Continued appropriate control of interest-bearing debt
Ratio of net worth to total capital
49.4％
49.1％ -0.3 percentage points Maintained at the MTP target of around 50%
Net D/E ratio
Total return ratio
ROE
0.27 times
0.28 times
+0.01 Maintained at less than the MTP target of 0.3 times
73.1％
10.4％
88.2％ +15.1 percentage points
Despite a reduction in dividends owing to lower profits, provided
shareholder returns in excess of the MTP total return ratio target of 50%
3.3％ -7.1 percentage points
Declined due to lower profits
The 6th MTP Financial Strategy / Policy on Shareholder Returns Overview
NSK’s fundamental financial strategy policy is to balance investment in future growth with shareholder returns under a stable financial structure.
1. Financial Base Stabilization
“Maintenance in Stabilization of Financial Base” is a prerequisite for
supporting NSK’s sustainable growth and for withstanding economic
fluctuation impacts.
NSK has been able to steadily improve its ability to generate cash flow
compared with the past, and has stabilized its financial base. (Please see
Financial Highlights on P. 36.) In addition, the Company has received high
evaluations from rating agencies, including an upgrade in its bond rating to
A from Rating and Investment Information, Inc. (R&I) in August 2014 after
being rated at A-, and an A+ rating from Japan Credit Rating Agency, Ltd.
(JCR), unchanged since September 2006.
NSK recognizes that maintaining an A bond rating while continuing
to keep its net D/E ratio around 0.3 times and its ratio of net worth to total
capital at roughly 50% will enable the Company to ensure financial stability.
Japan Credit Rating Agency,
Ltd. (JCR)
A+
Rating and Investment
Information, Inc. (R&I)
A
2. Growth with Profitability
Sustainably achieving“Growth with Profitability” is essential 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 a rate of return that exceeds the 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 its 6th Mid-Term Management Plan, which exceeds its 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
mid- term could contribute to further improvement in shareholder value.
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
(cid:12255)ROE of 10% or more
Pursuit of capital
efficiency exceeding
the cost of capital
(cid:12255)Dividend payout ratio of 30 - 50%
(cid:12255)Total return ratio (3 years) approximately 50%
Acquisition of treasury shares,
Agile capital policies
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
(cid:12255)Net D/E ratio of around 0.3 times
(cid:12255)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
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.
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 3-year
period covered by the 6th Mid-Term Management Plan, NSK is targeting a
total return ratio of 50%.
In addition to returning profits through dividends, NSK recognizes that
34 NSK REPORT 2020
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
●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
●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
Total Shareholders’ Return (TSR)
Along with achieving an ROE that exceeds the cost of capital over the midterm, increasing TSR acquired through dividends and a rising stock price is also important. NSK’s
TSR has been affected by demand adjustments over the most recent 2 to 3 years and a depressed stock price due to lower steering-related sales. Unfortunately, this has
led the stock price to underperform the TOPIX and the TOPIX machinery sector. Despite these circumstances, NSK will continue to promote stable shareholder returns
while working to achieve a TSR that exceeds the cost of capital over the mid- to long-term going forward.
Investment
Period
NSK
TOPIX
TOPIX Machinery
1 Year
3 Years
5 Years
10 Years
Cumulative/Annual Rate
Cumulative
Annual Rate
Cumulative
Annual Rate
Cumulative
Annual Rate
-30.2%
-9.5%
-11.2%
-49.5%
-0.4%
-8.5%
-20.3%
-0.1%
-2.9%
-50.2%
1.8%
-3.0%
-13.0%
0.4%
-0.6%
29.3%
78.4%
84.7%
2.6%
6.0%
6.3%
*TSR (Total Shareholders’ Return): Total return on investment including capital gains and dividends *Each index includes dividends.
*Annual rate based on the geometric mean *Created by the Company, based on Bloomberg data
NSK’s Share Price Trends (10-Year Period)
（INDEX）
300
NSK
TOPIX
TOPIX Machinery
200
100
0
2010/3
2011/3
2012/3 2013/3
2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3
*Share price index trends including dividends (March 31, 2010 = 100)
Share Price Trends by Fiscal Year
Fiscal Year
High (Yen)
Low (Yen)
Fiscal Year-End
(Yen)
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
836
815
758
1,360
1,815
2,120
1,739
1,916
1,488
1,208
495
458
414
646
1,023
910
691
1,261
885
579
717
637
715
1,062
1,758
1,030
1,592
1,426
1,037
694
Volatility
37.4%
36.7%
36.5%
45.7%
32.6%
39.0%
44.3%
28.5%
26.1%
33.7%
*Volatility refers to the standard deviation annualized rate
based on the daily closing price.
Policy on Cross-Shareholding
NSK aims to reduce the crossholding of shares deemed to have little benefit in increasing mid- to long-term corporate value. Conversely, if the Company believes
that there is a valid rationale for holding such shares, it will continue to do so. Regarding the appropriateness of crossshareholdings, 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 promote the sale of 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 72 stocks as of the end of March 2020 (a reduction of 7 stocks in the year ended March 2020, and 64 stocks over the 10
years from the year ended March 2010).
NSK REPORT 2020
35
Strategies and Performance
Financial and Non-Financial Highlights
Financial Highlights
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 expenses
Net cash provided by operating activities (A)
JP-GAAP up to and including the fiscal year ended March 31, 2015,
IFRS from the fiscal year ended March 31, 2016, onward.
2010
2011
2012
2013
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
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
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
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
Per Share
Data (Yen)
Financial
Indices
Net cash used in investing activities (B)
（29,355）
（33,348）
（56,090）
（45,262）
Free cash flows (A) + (B)
Dividends paid
Acquisition of treasury shares
Total equity attributable to owners of
the parent (Shareholders' equity)
Total assets
Interest-bearing debt
Earnings (Net income)
Equity attributable to owners of the parent
(Shareholders' equity)
Cash dividends*2
Operating income margin (%)
Return on average shareholders’ equity (ROE) (%)
Return on average assets (ROA) (%)
Ratio of equity attributable to owners of
the parent to total assets (%)
Net D/E ratio (times)
Dividend payout ratio (%)
Total return ratio (%)*3
Period-end share price (yen)
Price earnings ratio (PER) (times)
Price book-value ratio (PBR) (times)
Dividend yield (%)
21,753
4,327
ー
247,941
789,624
304,937
8.82
458.65
8.0
1.9
2.0
0.6
31.4
0.73
90.7
90.7
738
83.7
1.6
1.1
31,625
5,950
ー
257,012
788,626
274,585
48.30
475.45
11.0
6.1
10.3
3.3
32.6
0.60
22.8
22.8
717
14.8
1.5
1.5
1,068
6,491
ー
280,312
845,073
296,750
52.75
518.56
12.0
6.1
10.6
3.5
33.2
0.58
22.7
22.7
637
12.1
1.2
1.9
8,534
5,943
ー
319,286
882,547
305,102
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
Exchange
Rate Data
US$1
€1
92.83
130.89
85.63
112.92
79.02
109.40
83.10
107.14
*1. In accordance with segment changes in the business domains (part of operations transferred from the Industrial Machinery Business to the Automotive Business), data from
*2. 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 share dividend to
*3. Total return ratio = (Dividends paid + Acquisition of treasury shares) ÷ Net income attributable to owners of the parent.
36 NSK REPORT 2020
2014
2015
2016
2017
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
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
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
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
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
(Millions of Yen)
2019
2020
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
831,034
232,470
573,814
24,750
314,281
139,249
110,075
267,427
148,525
118,902
23,604
ー
17,412
54,927
53,926
18,265
72,387
（42,402）
（46,335）
（45,212）
（54,243）
（53,001）
（72,673）
（39,784）
27,940
8,650
ー
21,374
15,161
ー
63,410
18,425
ー
13,692
20,174
14,999
30,744
21,245
−
19,943
20,737
19,999
32,602
15,550
ー
359,201
456,046
454,661
461,350
537,175
536,676
505,505
1,000,932
1,129,164
1,032,374
1,043,955
1,092,310
1,086,456
1,029,884
315,532
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
326,400
114.56
842.69
28.0
10.0
15.3
5.8
40.4
0.31
24.4
24.4
1,758
15.3
2.1
1.6
109.93
138.77
278,152
121.38
839.56
34.0
9.2
14.3
6.1
44.0
0.23
28.0
28.0
1,030
8.5
1.2
3.3
120.14
132.58
267,399
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
250,908
131.16
1,016.30
274,780
107.46
1,048.18
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
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
279,170
34.00
987.01
30.0
2.8
3.3
1.6
49.1
0.28
88.2
88.2
694
20.4
0.7
4.3
108.75
120.83
the fiscal year ended March 31, 2016, onward, are presented under the new categories.
commemorate the 100th anniversary of the Company’s founding.
NSK REPORT 2020
37
Strategies and Performance
Financial and Non-Financial Highlights
Non-Financial Highlights
項目
Years ended March 31
Scope
Unit
2017
2018
2019
2020
Environment
（E）
Environmentally
friendly products*1
Products that contribute to
the reduction of CO2 emissions
Number of environmentally
friendly products (cumulative) NSK Group products
CO2 emissions avoided at
the product use stage
NSK Group ×103t-CO2e
Energy
Total energy consumption
NSK Group
Fuel and gas
NSK Group
Electricity and heat*2
NSK Group
Rate of renewable energy use NSK Group
Energy consumption per production unit
（base year: FY2017）
NSK Group
TJ
TJ
TJ
%
%
219
224
226
232
1,309
1,324
1,446
1,572
16,312
17,088
17,224 15,872*3
2,330
2,426
2,455
2,295
13,982
14,772
14,769
13,577
−
−
0.4
2.8
+2.6 0 （Base year）
+3.7
+14.0
Greenhouse gases Total GHG emissions
（Scope 1, Scope 2）
NSK Group ×103t-CO2e
991
1,001
Scope 1
Scope 2
NSK Group ×103t-CO2e
NSK Group ×103t-CO2e
137
854
143
858
978
142
836
883*3
132
752
Steel
Water
（Reference）Scope 3
NSK Group ×103t-CO2e
2,056
2,039
2,705
2,194*3
Reduction rate of GHG emissions
（base year: FY2017）
NSK Group
GHG emissions per production unit
（base year: FY2017）
NSK Group
%
%
− 0 （Base year）
2.3
+6.4 0 （Base year）
+0.6
11.8
+8.3
Steel consumption
NSK Group ×103t
705
756
758
618
Total water consumption
NSK Group ×103m3
4,716
4,713
4,700
4,308*3
Groundwater
General water
NSK Group ×103m3
1,840
1,869
2,011
1,789
NSK Group ×103m3
2,274
2,325
2,194
2,028
Industrial water
NSK Group ×103m3
601
519
495
490
Water withdrawal per production unit
（base year: FY2017）
NSK Group
%
+7.6 0 （Base year）
+2.6
+12.1
Total waste, etc.
Total waste
NSK Group ×103t
212.2
223.5
227.8
200.2*3
Landfill disposal volume
NSK Group ×103t
3.7
3.0
3.4
2.6
Recycling rate
NSK Group
Industrial waste per production unit
（base year: FY2017）
NSK Group
Air
NOx emissions
SOx emissions
NSK Group
NSK Group
%
%
t
t
98.2
98.6
98.4
98.6
+1.8 0 （Base year）
+5.6
+15.8
128
132
128
48
50
42
119
38
Water quality
Total discharged water
NSK Group ×103m3
2,863
3,040
3,159
2,847
Rivers
NSK Group ×103m3
704
453
729
591
Sewage system
NSK Group ×103m3
2,159
2,587
2,430
2,256
Environmentally harmful
substances
BOD
PRTR-designated substances
(materials and parts)
Discharge/transfer of PRTR-
designated substances
VOC
NSK Group
Group in Japan
Group in Japan
NSK Group
t
t
t
t
2.3
488
96
162
1.3
490
105
154
1.4
464
72
139
1.2
395
78
141*3
Biodiversity
Biodiversity conservation activities
（social contribution initiatives）
Number of sites undertaking initiatives
Group in Japan
Site
4
3
6
6
*1. Newly developed products until the year ended March 31, 2008, that are consistent with the “Basic Policy for the Development of Environmentally Friendly Products,” and from
the year ended March 31, 2009, newly developed products with an NSK Eco-efficiency Indicators (Neco) score of 1.2 or higher. *2. Energy use based on purchased power is set as the
primary energy input of power companies equivalent to the Company’s energy usage. *3. Third-party verification is performed. For more information, please see P. 75.
38 NSK REPORT 2020
Years ended March 31
Social
（S）
Number of employees
(consolidated)
Total
Japan
The Americas
Europe
Asia
Ratio of men/women
employees
Men
Women
Average age
Total
Men
Women
Number of employees
who took childcare leave
Total
Men
Women
Scope
Unit
2017
2018
2019
2020
NSK Group persons
31,501
31,861
31,484
30,747
Group in Japan persons
11,291
11,607
11,755
11,803
Group in
the Americas persons
3,065
3,080
3,093
2,804
Group in
Europe
Group in
Asia
persons
3,667
3,908
4,259
4,206
persons
13,478
13,266
12,377
11,934
NSK Group
NSK Group
％
％
Group in Japan
age
Group in Japan
age
Group in Japan
age
Group in Japan persons
Group in Japan persons
Group in Japan persons
82.4
17.6
82.4
17.6
41
42
36
75
34
41
2.20
0.68
−
−
−
13
17
403
507
41
42
37
69
40
29
2.09
0.60
25.7
93.8
39.1
14
15
466
536
80.9
19.1
41
42
37
109
73
36
2.25
0.37
25.3
95.9
37.6
13
10
451
563
81.0
19.0
42
42
37
162
125
37
2.24
0.35*2
25.1
94.9
36.6
12
10
527
631
22,365
28,893
15,538
15,518
Employment rate of
people with disabilities
Group in Japan
Occupational safety Lost-time injury frequency rate NSK Group
Health and wellness Percentage of employees participating in
the Specific Health Guidance program
Percentage of employees
receiving stress checks
Group in Japan
Group in Japan
Percentage of employees who smoke Group in Japan
％
％
％
％
％
Human resource
development
Employee Engagement
Survey*1
Research and
development
NSK Group persons
Number of participants in
Global Management College
Number of participants in
Japan Management College
Number of participants in
NSK Institute of Technology
Number of employees who have attained
a TOEIC score of 730 or higher (cumulative) Group in Japan persons
Number of participants
(officers and employees)
Group in Japan persons
NSK Group persons
NSK Group persons
Number of patents held
NSK Group patents
6,430
6,987
7,499
8,052
*1. Conducted as a compliance awareness survey until fiscal 2017.
*2. The Company receives third-party assurances. For more information, please see P. 75.
Governance
（G）
As of June 30
Composition of the Board of
Directors
Years ended March 31
Attendance at Board of
Directors meetings
Unit
2017/6
2018/6*
2019/6
2020/6
Number of directors
persons
Rate of outside directors
Ratio of males
Ratio of females
％
％
％
12
33.3
100
0
12
41.7
91.7
8.3
12
41.7
91.7
8.3
9
55.6
88.9
11.1
Unit
2017
2018
2019
2020
Number of meetings
meetings
Average attendance rate
Average attendance rate of outside directors
％
％
10
98
95
10
100
100
10
99
98
10
99
98
*The appointment of one independent outside director took place in July 2018.
NSK REPORT 2020
39
Strategies and Performance
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 2020.
Sales
(¥ Billions)
1,200
1,000
975.3
949.2
1,020.3
991.4
831.0
800
600
400
200
0
16/3
17/3
18/3
19/3
20/3
Operating Income Margin / Gross Profit Margin
Operating Income Margin Gross Profit Margin
（％）
25
20
15
10
5
0
22.5
22.2
22.8
22.1
9.2
6.9
9.6
8.0
18.5
2.8
16/3
17/3
18/3
19/3
20/3
In FY20/3, sales totaled ¥831.0 billion, a decrease of 16.2% from the previous
fiscal year. This was mainly due to the economic slowdown and a downturn
in demand attributable to U.S.-China trade friction, as well as the COVID-19
pandemic, which pushed down demand at the end of the fiscal year.
Despite efforts aimed at reducing labor and other costs, NSK’s
operating income margin declined to 2.8% (down 5.2 percentage points
year on year). This was due to the substantial downturn in sales.
Net Income Attributable to Owners of the Parent /ROE
Earnings per Share /Cash Dividends per Share, Dividend Payout Ratio
(¥ Billions)
80
■ Net Income Attributable to Owners of the Parent (left)
ROE (right)
14.3
13.9
60
40
20
0
65.7
45.6
69.3
9.9
10.4
55.8
3.3
17.4
16/3
17/3
18/3
19/3
20/3
（％）
15
(Yen)
150
■ Earnings per Share (left)
■ Cash Dividends per Share (left)
Dividend Payout Ratio (right)
12
120
121.4
131.2
107.5
（％）
100
88.2
9
6
3
0
90
60
30
0
86.1
44.1
38.0
28.0
34.0
30.5
40.0
37.2
40.0
34.0 30.0
16/3
17/3
18/3
19/3
20/3
ROE for FY20/3 came to 3.3% owing to the decrease in net income
attributable to owners of the parent as a result of the decrease in sales
attributable to sluggish demand.
NSK set its cash dividend per share at ¥30 for FY20/3, down ¥10 from the previous
fiscal year owing to the downturn in earnings per share. From the perspective of
continuously undertaking shareholder returns, however, the dividend payout ratio
came in at 88.2%, well above the 6th MTP target of 30%-50%.
Capital Expenditures / Depreciation and Amortisation
Interest-Bearing Debt / Ratio of Equity Attributable to Owners of the Parent to Total Assets
(¥ Billions)
100
■ Capital Expenditures
■ Depreciation and Amortisation
81.1
68.8
55.0
58.6
43.0
43.4
46.8
48.8
(¥ Billions)
500
400
■ Interest-Bearing Debt (left)
Ratio of Equity Attributable to Owners of the Parent to Total Assets (right)
49.2
49.4
49.1
44.0
44.2
54.9 53.9
300
278.2
267.4
250.9
274.8
279.2
16/3
17/3
18/3
19/3
20/3
200
100
0
16/3
17/3
18/3
19/3
20/3
80
60
40
20
0
（％）
50
40
30
20
10
0
80
60
40
20
0
Against the backdrop of a weak global economy, NSK undertook investments in projects related
to safety, quality and the environment; essential projects aimed at improving productivity and the
replacement of equipment; ICT projects to promote work style reform; and other areas. In FY20/3,
capital expenditures totaled ¥54.9 billion, down ¥26.2 billion from the previous fiscal year.
To address the spread of COVID-19 from the second half of FY20/3, NSK took steps
to properly control interest-bearing debt and secure working capital. The current
level, however, does not have an impact on the Company’s financial foundation,
and NSK has a good balance between shareholder returns and financial stability.
40 NSK REPORT 2020
Number of Employees Worldwide / Ratio of Overseas Employees
■ Japan ■ The Americas ■ Europe ■ Asia (left)
(Persons)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Ratio of Overseas Employees (right)
31,587
31,501
31,861
31,484
30,747
64.3
64.2
63.6
62.7
61.6
16/3
17/3
18/3
19/3
20/3
（％）
100
75
50
25
0
Ratio of Female Employees
（％）
35
30
25
20
15
10
5
0
17.3
17.617.617.617.6
17.6
19.1
19.0
16/3
17/3
18/3
19/3
20/3
NSK took steps to adjust its workforce to an optimal level that best
suits its business activities. As a result, the number of employees
worldwide at the end of FY20/3 fell to 30,747, a decrease of 737 from the
end of the previous fiscal year.
NSK is striving to expand work options and provide career advancement
programs for female employees. The ratio of female employees at NSK
was 19.0% on a global basis. Details of initiatives aimed at empowering
women are presented on P. 22.
Lost-Worktime Injury Frequency Rate
Number of Patents Held
0.8
0.6
0.4
0.2
0
0
0.70
0.68
0.60＊
0.37
0.35
16/3
17/3
18/3
19/3
20/3
(Patents)
10,000
8,000
6,000
4,000
2,000
0
8,052
7,499
6,987
6,275
6,430
16/3
17/3
18/3
19/3
20/3
Thanks to strengthened workplace safety initiatives, the lost-time
injury frequency rate is on a declining trend globally. For additional
information on NSK’s safety management, please see P. 32.
*Adjusted for the purpose of greater accuracy.
Toward realizing “challenging innovation” and “creation of new value”,
NSK is strengthening technical development. The number of patents
possessed in FY20/3 reached 8,052, an increase of 553 patents from the
previous fiscal year.
Greenhouse Gas Emissions
Number of Environmentally Friendly Products Developed
(×103t-CO2e)
1,200
1,000
953
991
1,001
978
883
800
600
400
200
0
16/3
17/3
18/3
19/3
20/3
(Accumulated No. of Products)
250
211
219
224
226
232
200
150
100
50
0
16/3
17/3
18/3
19/3
20/3
NSK continues to improve productivity and introduce energy-efficient
machinery. As production volume decreased due to the recession, in
FY20/3, greenhouse gas emissions declined 95 thousand tons from the
previous fiscal year to 883 thousand tons.
Note: Due to a change in calculation criteria, the data was recalculated.
NSK developed 6 new products, bringing the total number of
environmentally friendly products to 232. For more details, please see
Developing Environmentally Friendly Products on P. 31.
Note: Cumulative data from the year ended March 31, 2003.
NSK REPORT 2020
41
Foundation Supporting Sustainability
Core Technologies and Taking Up the Challenge of Creating New Collaborative Value
NSK’s 4 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 4 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 4 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.
4 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.
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
Friction on
the bearing’s ball surface
4 Core
Technologies
Numerical Simulation
Simulated Recreation in Cyberspace to Predict
Performance
Mechatronics
Technology Supports People for a Convenient,
Safe and Comfortable Future
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
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.
NSK vibration control actuator
for train cars
Manufacturing Engineering
Giving Shape to 4 Core Technologies
Contributing to the environment and heightening safety and security through our 4 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
42 NSK REPORT 2020
“SETTING THE FUTURE IN MOTION” with Mechatronics
NSK Vision 2026, “Setting the Future in Motion,” is a statement of what NSK will achieve in the 10 years following the 100th
anniversary of its founding in 2016. We are determined to create new movement for the Company, for our customers, and
for society at large with our mechatronics. Through this movement, we aim to establish “Industrial Actuators” as a new core
product of the Industrial Machinery Business.
Strengths of Our Mechatronics
NSK has expanded its business into the field of mechatronics since around 1980.
Utilizing NSK’s precision products, we have achieved the commercialization of XY
Tables and Direct Drive motors, and have contributed to the spread of industrial
robots and the automation of semiconductor manufacturing equipment. The
strength of mechatronics technology in NSK’s industrial machinery business is
“Precision Positioning Control Technology” that builds its own systems by utilizing
elemental technologies such as ultimate structural design, motor and servo
control, and sensors.
Rigid support, Precise motion
Social Needs and Technological Trends
Shifting Our Mindset
The major social trends (megatrends), consumption growth, work style
reform, supply and demand of resources, demographic structural changes
and prevention of infectious disease require the industry to promote Digital
Transformation (DX). In response to these demands, we are developing
technologies to accelerate electrification, automation and autonomous
control.
There is no doubt that we must have technology to support humans in the future.
We are strongly shifting our development process by identifying problems that need
to be solved from the final customer’s (end user’s) point of view and accelerating
key technology developments as solutions for our future needs. Through
collaboration with research institutes around the world and with other industries,
NSK is committed to combining a variety of expertise and technologies.
Initiatives for New Fields
In addition to production equipment, NSK is expanding its development area into the
biomedical and robotics fields. More advanced motion reproducibility and autonomy
will transform the work that currently must be done manually. Then, the number of
people who enjoy high-quality service will increase. Workers will be more creative and
more motivated to work. A smoother and more prosperous society will be realized.
Biomedical
Robotics for Service Robots
Cell manipulation via imagery
synchronization
Manipulation system for biomedicine
Robotics technologies under development to
enrich people’s inner life and to reform work styles.
Say goodbye to traffic jams and packed public transportation with a
telepresence robot to use as your physical body anywhere around the world.(left)
Both parents working? The robot can pick up your kids from school or take
them to piano lessons.(right)
NSK’s industrial actuators accelerate Digital Transformation (DX) by using mechatronics technology.
R&D Expenses
Along with R&D expenses based on institutional accounting, NSK
recognizes that all expenses involved in the technology divisions are R&D
expenses in a broader sense. As part of the 6th Mid-Term Management
Plan, NSK intends to make R&D expenses investments equivalent to
3%-4% of sales (¥30.0 billion-¥40.0 billion annually). This level of R&D
investment, which even rivals that of Japanese and overseas bearing
competitors, will enable us to quickly supply sophisticated products with
new features to the market. Moreover, we will contribute to the realization
of a more abundant, sustainable society by engaging in activities to save
energy, reduce CO2 emissions and conserve the global environment.
(¥ Billions)
■ R&D Expenses (on a statutory basis) (left)
■ R&D Expenses (on a managerial basis) (left)
Ratio of R&D Expenses to Sales (right)
35
25
15
〜〜
0
25.7
28.2
2.7
13.9
2.8
17.1
3.3
19.0
32.4
31.4
3.8
18.3
4.2
30.0
17.0
17/3
18/3
19/3
20/3
21/3 (Forecast)
（％）
5
4
3
2
1
0
NSK REPORT 2020
43
Foundation Supporting Sustainability
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 endeavor to further
enhance and strengthen its global business foundation.
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 Group-wide 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 Group-wide 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
Note: 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.
Sales Breakdown by Region (based on customer location) /
Number of Employees Breakdown by Region (consolidated)
Asia
11,934
(Year ended March 31, 2020)
Japan
11,803
Other Asia
14%
China
18%
Sales
¥831.0 billion
Number of employees
30,747
Japan
38%
Europe
13%
The Americas
17%
Europe
4,206
The Americas
2,804
Global Sites
Head-
quarters
Production
Sites
Sales
Sites
Representative
Offices
R&D
Centers
The Americas
U.S.
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
Asia/Oceania
Japan
Singapore
Indonesia
Thailand
Malaysia
China
Taiwan
South Korea
Philippines
Vietnam
India
Australia
New Zealand
13 countries and regions Total
Global
Total
1
1
1
1
1
1
1
1
4
6
7
2
1
10
4
1
4
9
20
3
2
2
11
2
5
45
64
9
2
1
5
1
1
19
2
2
1
1
1
1
3
1
1
1
1
15
31
2
2
5
4
18
3
2
2
10
4
1
84
118
2
2
1
1
2
4
1
1
2
1
1
1
3
7
1
1
1
1
11
16
44 NSK REPORT 2020
208 locations in 30 countries and regions
(As of March 31, 2020)
Interviews with Regional Management
Interviews with the new heads of the 3 regions
China
Regional Information and Profile
Company
History
NSK has been involved in Japan-China trade and technology exchanges since the
1960s. Based on this relationship, NSK established the Kunshan plant in 1995 as
the first production site in China. Since the 2000s, NSK has been expanding the
range of products such as industrial bearings, precision products, automotive
bearings and steering components, and now has 11 production sites. As the
Chinese market is expanding, NSK’s business in China has also been growing
with strengthened technology and sales management.
Sales
Profile
China
¥148.5 billion
¥831.0 billion
(cid:12255)NSK Career
Apr. 2020 Appointed as Senior Vice President and Head of All Chinese Operations
Jun. 2016 Appointed as Vice President and Deputy Head of All Chinese Operations
Apr. 2013 Joined NSK (China) Investment Co., Ltd., as CFO and Head of Corporate
Management Division and China Automotive Steering Business Unit
(cid:12255) Previously served as Director of Finance, General Manager of a China business unit, and Director
of International Marketing in an industrial and automotive component company in the U.S.
Senior Vice President
Head of All Chinese Operations
Guoping Yu
NSK’s Growth Potential in the Chinese Market
The top priority in the China region for fiscal 2020 is to secure
volume growth and profitability after the COVID-19 pandemic in an
environment of increasing geopolitical risks especially between
China and the U.S. The pandemic has significantly lowered Chinese
consumer confidence and weakened the import/export markets.
The political tensions between China and the U.S. will likely
increase, which could make things tough for China’s external
growth environment. Despite such risks, NSK still has many growth
opportunities in China. The Chinese government recently announced
many new measures to stimulate the Chinese economy. In addition
to increased investment in traditional infrastructure, the government
will significantly increase investment in “New infrastructure” such
as 5G, NEV charging, AI, big data analysis, industrial Internet and
intercity transit systems. Moreover, NSK products, such as sensor
technologies, coreless motors, robotics and servomotors, have
huge potential in the new market fields of biomedical equipment,
smart logistics and smart manufacturing. The government is also
determined to improve environmental conditions in China. This could
create additional long-term demand for NSK’s environmentally
friendly products. Local competitors have been improving their
technology and quality capabilities, leading to more intense market
competition. However, NSK China is well positioned in China through
the localization of its production and supply chain over the past two
decades. Furthermore, with China focusing more on high technology
development and high-quality living standards, we believe NSK’s
advanced technologies are better positioned than those of local
competitors. To further improve our competitiveness, NSK China will
fully utilize our existing investments, control fixed costs and speed
up the development of those new products and new businesses that
are a good fit for the growing markets in China. To this end, we need
to establish a more efficient decision-making process by reducing
the barriers between the sales/marketing, manufacturing and
R&D departments. We must intensify our efforts to understand the
different technical paths of new products developed by customers
and engage earlier in their development process. It is essential for
us to strengthen our local design capability to develop products and
manufacturing equipment suitable for the Chinese market.
Regional Management in China and NSK’s Global Management
Regarding our local management, to achieve sustainable growth in
the changing China market, the NSK China leadership team must
prioritize the development and implementation of future growth
strategies. We should work with the global Business Division
Headquarters to identify market demand and growth opportunities and
develop the right products and marketing strategies for these areas.
Working in China, it is imperative to maintain communication and
good relationships with various government agencies and industrial
associations for information updates and policy support. We must
continue to utilize outside advisory board meetings to get opinions
of Chinese leaders outside of NSK. In terms of human resource
development, we must do a better job in leadership training for our
internal talent. To further promote localization, I expect our regional
business leaders to be more proactive in developing initiatives with a
positive mindset and a “can-do” attitude.
Regarding global management, NSK is strong in establishing
and enforcing NSK’s core values and corporate philosophy. NSK
has a solid governance structure and matrix organization including
the Business Division Headquarters, regional headquarters and
Functional Division Headquarters to manage complicated global
businesses. The localized regional management joining NSK’s global
management brings new and diversified perspectives to help improve
business decisions.
I was born and grew up in China. Before joining NSK in 2013,
I worked for a major global industrial and automotive component
company in the U.S. for almost 20 years supporting Western and
Chinese customers. While there, I had increasing responsibilities in
financial management, operational and supply chain management,
marketing and aftermarket leadership, and general management
of a business unit. China is a distinctive place. I believe I can help
NSK to further grow our business in China by utilizing my strength
in understanding Chinese culture, my Western political and business
sense and my understanding of NSK’s global management policy.
I will lead NSK China to be more customer-focused, mutually
respectful of each other and committed to NSK’s core values.
NSK REPORT 2020
45
Foundation Supporting Sustainability
Global Business Foundation
Regional Information and Profile
Company
History
NSK started to expand into Europe with the establishment of a sales subsidiary
in Germany in 1963. The Peterlee plant (UK) started production in 1976 as the
first production site for NSK in Europe. Subsequently, NSK has been growing its
business while promoting M&A activities, and now has expanded its bases into
11 countries, including those in the Middle East and Africa, for which the Europe
regional headquarters is responsible.
Sales
Europe
¥110.1 billion
¥831.0 billion
Europe
Profile
(cid:12255)NSK Career
Oct. 2019 Appointed as Vice President and Head of All European Operations
Feb. 2019 Joined NSK Europe Ltd. as COO
(cid:12255)Previously worked as Senior Vice President of Product Group in an auto
component company in Europe
(cid:12255)Ph.D. on the wear of worm gears
Vice President
Head of All European Operations
Ulrich Nass
Regional Issues and NSK’s Strengths
NSK has been actively expanding its business in Europe since the
establishment of its first sales office in the 1960s. Europe is also a
region where the leading global bearing companies established their
bases early. Compared to those companies, NSK is still a niche player
in this region. However, we can use this as a strength by focusing
on our customers and understanding their specific needs. The true
partnerships that we build with customers are rooted in the Japanese
business culture, which is a unique attribute that a Western company
cannot provide. In the end, business occurs between people who
trust each other, so I believe that gaining customer trust is the most
important aspect of our business. NSK is committed to strengthening
our local sales and engineering capabilities in each European country
to swiftly and flexibly meet the diversified needs and expectations of
customers. We will continue improving our presence in Europe by
enhancing relationships with our customers based on trust, reliability,
flexibility and outstanding brand reputation in product performance
and quality.
Characteristics of Europe and Our Organizational Initiatives
Europe is a region marked by diversity, with many different countries,
cultures and languages. Understanding country-specific business
cultures and speaking a customer’s “language” are keys to
successfully developing business in this region. Having worked most
of my business life in global companies, one of my key observations
is that the diversity of a business and of its people and cultures is
a valuable asset of such organizations. NSK has been running the
Global Management College with the aim of preparing highly qualified
prospects for global responsibility. I think this is a good initiative to
ensure that there is a strong network inside NSK by fostering a deeper
understanding of regional characteristics and culture.
In developing human resources, one of my key values is that
leadership is a non-hierarchical concept and a service to be given
to people. This is a philosophy in which the leader exists not for
leading and controlling the people in the hierarchical system but for
supporting and serving them. Based on this concept, I have started
a strategic initiative called “leaders who people want to be led by” to
enable our employees at all levels to improve their leadership skills
and experience.
From a technological perspective, I see a big need to improve
the technology input from Europe to NSK. As Europe is one of the
leading regions in the world driving innovations and technological
improvement, NSK’s innovation and technological development must
understand European technological trends if we want to continue
to stay on top with our products. More specifically, we are in the
process of building the Technology Scouting Office (TSO) in Europe to
strengthen our activities. It has been established to scout business
opportunities for products or fields new to NSK and to function as a
bridge for collaboration between technology departments in Japan
and external organizations such as universities and companies in
Europe.
Improving NSK’s Global Management
NSK was an early promoter of localization in overseas operations. To
further improve our global management while respecting diversity,
the keys are active involvement in decision-making processes, a clear
framework of local decision-making authority and a matrix structure
that encourages teams to work across regions. The leadership
shown by the headquarters, especially the corporate functions, is
critical for this to be effective. Language skills and state-of-the-art
communication tools are a necessary basis for such an approach.
Global standards for processes, ICT infrastructure and ICT tools
need to be developed in collaboration with the respective regions
but clearly defined and communicated from the headquarters for all
global locations. Product design needs to be standardized yet consider
specific regional requirements and be flexible to country-specific
needs. Product innovation should follow the same approach, with
global trends and needs reflected in projects developed centrally to be
applied globally. The global utilization of resources must be defined
by the headquarters, for example, the establishment of a global back-
office center to consolidate operations. Finally, it is essential to further
develop local management while maintaining a common global vision.
This will enable us to take advantage of our diversity and strengths,
thus leading to NSK’s growth as a truly global company.
▲ Global Management College P. 30
46 NSK REPORT 2020
The Americas
Regional Information and Profile
Company
History
NSK Americas operations began with the establishment of a sales base in the U.S. in 1962.
The Company started producing bearings at plants in Brazil and the U.S. in the 1970s, later
expanding to steering components and precision machinery products. In 1988, the Technical Center
(now the NSK American Technology Center) was established in the U.S. to enhance technology
services. Also, production of automatic transmission components commenced at a new plant in
Mexico in 2017, leading to the further development of NSK Americas’ business.
Sales
Profile
The Americas
¥139.2 billion
¥831.0 billion
(cid:12255)NSK Career
Apr. 2020 Appointed as Vice President and Head of All Americas Operations
Apr. 2011 Appointed as CFO
Aug. 2009 Joined NSK Americas, Inc.
(cid:12255) Previously served as Finance Director after holding various finance
positions at a global automotive fluid systems manufacturer
Vice President
Head of All Americas Operations
Brian Parsons
Importance of Talent Development
On assuming the role of Head of All Americas Operations, my highest
priority is to continue to build on a key focus area we have been
developing in the region for a number of years: talent development.
Having talented people in the correct roles and allowing them to use
their expertise and experience to deliver great results is the key to
business success. Throughout my career, I have benefited from many
opportunities to develop my experience in new areas and have received
the support of management as I developed. It is therefore natural
for me to help communicate the importance of talent development
to others at all levels of our organization. I regularly participate in
executive Q&A sessions for our regional development programs such
as the Americas Regional College and the NSK Americas Women’s
Development Program. I have been able to share my experiences and
opinions, and to better understand the challenges and concerns facing
our leaders of tomorrow.
Key Issues in the Americas Market
Considering today’s business environment for the Americas, there are
two key themes: changes in international trade practice and world-
leading high-tech innovation.
First, specific technical competence in international trade
and compliance has become increasingly important in the past few
years, and NSK Americas has established and developed a dedicated
function responsible for supporting our businesses and managing
these complex issues. Longer term, the complexity of global trade is
compounding the risks associated with lengthy global supply chains.
Lengthy supply chains generally absorb working capital. COVID-19 has
been a forceful reminder of the physical risks associated with lengthy
supply chains. The long-term response to this is the development of a
local, capable, flexible supply chain, supporting NSK’s manufacturing
objectives and our customers’ requirements.
Second, NSK Americas sees technology as a key to continuing
to meet customers’ requirements throughout our region. We are
already working with several leading-edge companies including EV
manufacturers and are a key supplier to high-tech industries such
as medical and semiconductor. New technologies are expanding
our products into new market segments, such as the hub bearing
market for trucks in North America. Electrification continues to be
a theme of technological development across our business, and we
are successfully applying NSK’s technology to increase our business
in the growing medical markets. Alongside our product portfolio,
technology innovation also applies to our business processes. Our
digital strategy is becoming increasingly important, such as interactive
collaboration tools and full e-commerce support to quickly analyze,
understand and address changing customer requirements in real
time. While many technologically advanced customer requirements
might originate in the U.S., the global nature of NSK means that in
addressing these requirements we always work closely with our
affiliates across the globe. We work closely with the Business Division
Headquarters in Tokyo to communicate the latest technical trends.
We also work with global manufacturing locations, suppliers and R&D
centers, and this allows us to respond quickly to the latest customer
requirements. Going forward, we would like to continue to strengthen
NSK’s global network by playing a role as a liaison to communicate
the latest technological information.
Regional Management in the Americas and NSK’s Global Management
Considering the management of the Americas as a geographically
large region that stretches from north to south, we are focused on
benefiting from the wide range of cultures that make up our region.
Our executive leadership team has representatives from the U.S.,
Brazil, Mexico and Canada. We have team members on assignments
between countries, which further helps build bridges and teams
across our region. Our goal is to have a diverse leadership team, with
strong local management, who have a thorough understanding of
local customer requirements, local culture and our NSK culture.
Looking at NSK’s global management team, it has
representatives from many different countries and cultures. This
is critical as many of the customers we serve have a similar global
outlook and presence. This diverse management team brings huge
benefits to NSK in collaborative projects such as the development of
global financial systems and developing and delivering bearings for
global customer platforms. I think being able to work with colleagues
from different countries, exchange ideas, share experiences and
visit global locations is not only beneficial to our business but also
hugely enjoyable for the people involved and is a great motivator for
our employees. NSK’s Business and Functional Headquarters have
developed and expanded global interaction over the past few years,
and I believe that further regional involvement in strategy setting
would benefit NSK globally and continue this evolution.
▲
Global Management College P. 30
NSK Americas Women’s Development Program P. 22
NSK REPORT 2020
47
Foundation Supporting Sustainability
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 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 3 types
outlined in 1, 2, and 6 could lead to business opportunities for NSK,
and we include details concerning these as well.
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
Risk Heat Map
Short-term risk: 1-2 years
Long-term risk: 10 years
High
t
c
a
p
m
I
3
9
2
5
1
6
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
48 NSK REPORT 2020
Representative Risks and Mitigation Measures
Risk Types
1
Risk associated with changes
to technology innovation, and
the market or competitive
landscape
2
Risk related to local situations
and dependency on specific
region
Details of Representative Risks
(cid:12255) Risk of delayed product engineering response to market changes and
customer technology demands brought on by technological innovation
such as CASE and IoT
Risk Mitigation Measures
(cid:12255) Understand the needs through close relationships with a broad range of
customers
(cid:12255) Continually allocate resources to develop new products and new
(cid:12255) Risk of being unable to respond to an increasingly competitive market
technology
populated by rival companies and new market entrants
(cid:12255)Leverage open innovation and alliances
Opportunity
Generation and expansion of new businesses brought about by the
introduction of new products and new technology ▲ PP. 21, 27, 29, 43
(cid:12255) Risk of change in the economic environment of a specific region in
which the Company conducts business, and of the impact of falling into
political instability
(cid:12255)Expand and enhance a balanced presence in other regions
(cid:12255) Get an early grasp of information on dangers by strengthening ability to
gather information from each region
(cid:12255) Risk associated with halt in operations on account of deteriorating public
(cid:12255) Leverage our global network that has the principle of local production,
order, outbreak of riots or terrorism
local procurement
(cid:12255) Risk associated with business continuity in the event the supply chain
breaks down
(cid:12255)Risk of overemphasis on Asia, particularly China
Opportunity
Business expansion in important regions other than China, such as Europe,
ASEAN and others
▲ PP. 44-47
(cid:12255)Risk of major industrial accident occurring
(cid:12255) Risk of halt in operations due to mistaken BCP measures to address
(cid:12255) Strengthen and nurture safety awareness, thoroughly educate and enlighten
employees
3
Risks associated with safety,
prevention of fire and disaster,
and pandemics
fires or natural disasters
(cid:12255) Share case studies from other locations introducing what went right, and
(cid:12255) Risk of being unable to secure a comfortable and safe working
what went wrong
environment in neighboring regions, or for employees
(cid:12255) Conduct simulations of anticipated scenarios, prepare disaster
(cid:12255)Risks associated with the global outbreak of new infectious diseases
countermeasures, formulate a business continuity plan
(cid:12255) Implement thorough measures to prevent infection when an outbreak of an
infectious disease occurs, including development of responsive procedures
4 Risk associated with quality
(cid:12255)Risk of compensation claims due to significant quality defects
(cid:12255) Risk associated with insufficient response due to improper quality
(cid:12255) Secure high quality by strengthening process management aimed at
enhancing design and product quality
assurance system or quality control management
(cid:12255)Risk of spoofed, falsified quality data
(cid:12255)Realize zero defects through continued quality improvement activities
(cid:12255)Create a system to prevent data falsification and conduct thorough training
5 Risk with regard to compliance
(cid:12255) Risk of losing the trust of society due to bearing responsibility for
criminal, civil and administrative acts associated with the above
(cid:12255) Risk of violating laws and regulations due to employee carelessness or
misunderstanding, etc.
6 Risk concerning the
environment
7 Risk associated with human
resources and labor
(cid:12255) Risk of not progressing toward attaining reduction in CO2 emissions (60%
reduction in emissions in 2050) and other specific goals related to the
environment
(cid:12255) 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
▲ PP. 21, 31
(cid:12255) Risk of being unable to secure globally competent human resources,
consequently hindering business expansion and execution of strategy
(cid:12255)Risk of impact on operations due to deteriorating labor relations
8 Risk with regard to
procurement
(cid:12255)Risk of procurement of raw materials or components being hindered by
dependency on a specific source of supply, occurrence of quality issues,
insufficient supplier production capacity, etc.
(cid:12255)Risk of impact from rising costs for raw materials or components
(cid:12255)Risk that CSR procurement initiatives will not make progress
(cid:12255) Undertake education on strict adherence to laws and regulations, create a
corporate culture and atmosphere interwoven with morals and manners
(cid:12255) Review compliance systems, policies, and related rules on an as needed
basis to strengthen and improve
(cid:12255) Promote specific measures related to strengthening compliance, follow
up to confirm on the status of implementation
(cid:12255) Formulate and implement environmental action plans through a special
committee dedicated to environmental protection
(cid:12255) Understand information, and formulate and implement specific response
measures, in order to conform to environment-related laws and systems
(cid:12255) 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
(cid:12255) Strengthen and thoroughly implement human resource management
policies such as leveraging a diverse workforce, building more engaging
workplaces, providing opportunities for growth
(cid:12255) Undertake measures to bolster engagement and systems, including
support for females, elderly and people with disabilities to play an active
role, conduct employee awareness surveys and Employee Relations (ER)
(cid:12255) 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
(cid:12255) Cultivate and educate new suppliers based on high and increasingly
sophisticated assessed purchasing capabilities
(cid:12255)Conduct supplier BCP inspections, as well as quality, environmental, and
CSR audits, and support supplier improvement
9
Risk associated with
information and
communication technology
(ICT)
10 Risk related to finance
(cid:12255) Risk of decline in competitiveness due to lagging sophistication of IT
(cid:12255) Maintain and raise technology level by pursuing new IT system technology
systems
and field trial deployment
(cid:12255) Risk of decline in business efficiency due to loss of stability in IT system
(cid:12255) Ensure stability through backup and redundancy of IT system
that underpins business operations
infrastructure and standardized system support
(cid:12255) 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
(cid:12255) 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
(cid:12255) Risk relating to the collection of accounts receivable due to sales
destination trust problems
(cid:12255) Risk of cost burden from problems that arise related to quality, litigation
concerning business activities
(cid:12255)Risk of procurement of necessary funds, cash flow
(cid:12255)Risk related to mistakes in accounting procedures
(cid:12255) Identify issues early by ascertaining information from the risk reporting
system in a timely manner, and respond to issues swiftly through close
collaboration with relevant divisions
(cid:12255) Perform Group management and increase effectiveness based on the
internal control system
Impact of and Response to the Novel Coronavirus
The global spread of the novel coronavirus, COVID-19, is posing a major risk to our business operations in the year ending March 31, 2021. There are signs that the
pandemic is pushing down sales due to a variety of factors. This includes the drastic reduction in the number of automobiles being manufactured and weak demand
in the industrial machinery sector owing to the stagnation across a wide range of economic activities. Depending on when COVID-19 will come to an end, there are
concerns that the risk could be prolonged. NSK is putting the safety and security of its customers, business partners and employees first, and thoroughly implementing
measures to prevent the spread of COVID-19. At the same time, we are promoting work style reform in preparation for a post-corona world through measures that
include working from home and encouraging the use of online conferencing systems. In addition to efforts aimed at securing our supply chain and liquidity on hand in
order to ensure business continuity, we are working to strengthen our corporate foundation by sharpening our competitive edge and restoring profitability.
NSK REPORT 2020
49
Foundation Supporting Sustainability
Compliance
NSK’s Approach
NSK has positioned compliance as one of its core values. For NSK, compliance goes beyond adherence to laws and regulations. It also entails acting in
accordance with internal rules, social norms and the Corporate Philosophy in a sincere and fair manner. Moreover, compliance means earning the trust of
society and contributing to the development of the economy and society in Japan and around the world.
Policy
NSK Group 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.
To that end, the Group has put in place policies and a management system related to compliance, constantly enhances its education and training for officers
and employees, conducts internal audits and has established the Compliance Hotline. It also strives to fulfill its corporate social responsibility through initiatives
such as preventing information leaks and addressing issues related to conflict minerals.
(cid:12255)NSK’s Efforts to Enhance Compliance
Key initiatives to enhance compliance undertaken to date are as follows.
Item
NSK Group Initiatives
Strengthening Systems
Establishing Relevant
Regulations & Systems
Strengthening Education
and Awareness Raising
Activities
Strengthening Monitoring
Established the Compliance Committee (meetings held 3 or 4 times a year)
Established the Compliance Enhancement Office (a dedicated organization)
Holds Global Legal and Compliance meetings (twice a year) with legal and compliance representatives outside Japan
Holds a Compliance Conference (twice a year) with compliance representatives in Japan
Distributed the NSK Compliance Guidebook to officers and employees (revised in 2018)
Established the Rules for Compliance with the Competition Law
Revised the Hotline Operational Rules to reflect the Consumer Affairs Agency’s guidelines concerning the operation of internal reporting systems
Revised Internal Regulation for Preventing Insider Trading, introduced a prior approval system for selling NSK stock and prohibited buying of NSK stock on the open market
Established Anti-Bribery Standards
Formulated Personal Information Management Regulations
Regularly distributed the president’s message calling for thorough compliance
Implemented compliance e-learning for officers and employees
Conducted compliance training at sales divisions, plants, engineering sections and Group companies
Started a regular Compliance Newsletter
Designated July 26 as “NSK Corporate Philosophy Day”
Conducted a compliance slogan contest during compliance month (July 26–August 31)
Internally shared compliance violation information
Conducted internal audits of sales divisions relating to Antimonopoly Act compliance
Inspected specific categorical risks in compliance for the NSK Group
Conducted an employee engagement survey for the NSK Group (compliance awareness survey)
(cid:12255)Main Initiatives in Fiscal 2019
1. NSK Corporate Philosophy Day
To revisit the lessons learned from past incidents, reconfirm the resolve of all
NSK Group employees that no anti-competitive incident will ever occur again and
ensure that all employees review the Corporate Philosophy and make it their own
code of conduct, July 26 has been designated as “NSK Corporate Philosophy Day.”
In fiscal 2019, employees at our domestic and overseas bases watched
videos titled “Message from the President,” “Understanding Our Corporate
Philosophy” and “A Look Back at the Cartel Incident.” In Japan, employee
questions were answered about the Corporate Philosophy and examples of how
the Corporate Philosophy is put into practice were shown. Overseas, after a
message from the management of local bases, each site held its own events that
included lectures by outside experts and discussions on compliance.
NSK Group Compliance System (As of August 2020)
2. Employee Engagement Surveys (Compliance Awareness Surveys)
An employee engagement survey was conducted with the Human Resources
Department with the objective of assessing the level of awareness of compliance
and state of work environments, in terms of motivation and opportunities
for growth for each employee. In fiscal 2019, we addressed issues that were
identified in the fiscal 2018 survey in Japan, namely enhancing awareness of
compliance in manufacturing divisions and further improving the reliability of
a whistleblowing system. In addition, we conducted surveys in some regions
overseas. A total of 15,518 officers and employees answered the survey.
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
Administrative
Divisions
Sales
Divisions
Production
Divisions
Technology
Divisions
NSK Group Companies
Outside Japan
Global Legal and Compliance Meeting
Regional Headquarters
The
Americas
Europe
China
ASEAN
India
South
Korea
All NSK Group Employees
50 NSK REPORT 2020
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 4 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
(cid:12255)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.
(cid:12255)NSK’s Corporate Governance Structure
Shareholders Meeting
(Executive Organizations)
Election & dismissal of Directors
Proposal & Report
(Supervisory Organizations)
President & Representative Executive Officer/CEO
Report
Report
Direction
Report
Report
Compliance Committee
CSR Division HQ
Legal Department
Compliance Enhancement Office
Disclosure Committee
Operating
Committee
Inquiry
Executive
Officers Meeting
Direction
Crisis Management
Committee
Direction
Internal Audit Department
Election & dismissal
of Executive Officers
Delegation of
authority Supervision
Report
Cooperation
Direction
Cooperation
Board of Directors
Election & dismissal
of each committee
member
Report
Nomination
Committee
Compensation
Committee
Audit Committee
(cid:12255)Roles and Structure of Supervisory Organizations (As of August 2020)
Internal
director
Outside director
(Men)
Outside director
(Women)
Organizations
Board of Directors
Nomination Committee
Audit Committee
Compensation Committee
Chair
Chair
Chair
Chair
Structure
9 members
(4 internal directors, 5 outside directors)
● Majority outside directors
3 members
(2 outside directors, 1 internal director)
● Majority outside directors
● Chair : Outside director
4 members
(3 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
● 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
● Audits the duties of
directors and executive
officers
● Creates audit reports
● Determines the content
of proposals related to
appointment or dismissal
of the accounting auditor,
and other matters
● Determines policies on the
compensation of directors
and executive officers
● Determines the individual
compensation provided
to directors and executive
officers, and others
matters
Corporate Planning
Division Headquarters,
Secretariat Office
Human Resources Management
Division Headquarters,
Corporate Planning Division Headquarters
Internal Audit Department
Human Resources Management
Division Headquarters
１０
8
１5
5
Objectives
and
Authority
Secretariat
Number of
times
convened
in FY2019
NSK REPORT 2020
51
Foundation Supporting Sustainability
Corporate Governance
(cid:12255)Changes to NSK’s Corporate Governance Systems
Form of
Corporate
Organization
Committee
Outside
Director
Others
1999〜
2004〜
2006〜
2015〜
1999
● Adopted an executive officer
system
2004
● Transitioned to a Company
with Committees System
2006
● Transitioned to a Company
with Committees
2015
● Transitioned to a Company with Three Committees
(Nomination, Audit and Compensation)
1999
● (Voluntary) Established a
Compensation Committee
2004
● (Voluntary) Established a
Nomination Committee
● Established Nomination, Compensation and
Audit committees based on the Companies Act of Japan
2018
● Chairs of three committees
all outside directors
2003
● (Voluntary) Established an Audit Committee
1999
● 1 outside
director
2003
● 2 outside
directors
2004
● 3 outside
directors
2005
● 4 outside
directors
2018
● 5 outside
directors
2010
● Established criteria for the independence of NSK’s outside
directors
● 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
2006
● Established the Internal Control Project Team (later merged into
the current Internal Audit Department)
June 2020
● Outside directors a
majority on the Board of
Directors
2005
● Established the Information Disclosure Team (current Disclosure Committee)
2012
● Established the Compliance Committee
Initiatives to Further Enhance Effectiveness of the Board of Directors
(cid:12255)Officer Training
(cid:12255)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.
(cid:12255)Evaluation of Effectiveness of the Board of Directors
In order to achieve sustainable growth and increase our med- to long-term corporate value, NSK conducts annual assessments of the effectiveness of
its Board function and works to further enhance performance. To maintain the objectiveness of these assessments, they are commissioned to external
experts and conducted based on questionnaires and interviews. Findings are subsequently discussed by the Board.
The main content of the questionnaire conducted in fiscal 2019 is outlined below.
Main Content of
Questionnaire
● 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)
Continuing from the previous year, an assessment in fiscal 2019 by external experts found that the
assessment concluded that the Board of Directors maintained a high level of effectiveness.
Assessment
Results
● The decision-making authority delegated by the Board of Directors and the Board’s supervision of
executive directors’ duties is appropriate.
● Outside directors gave useful opinions based on their extensive knowledge of and experience in
corporate management, finance, accounting and technology at Board of Directors’ meetings.
● Discussions are advancing in terms of technology and global management.
Going forward, we will continue working to improve the effectiveness of our Board of Directors, consisting of a majority of outside directors, by further
strengthening our corporate governance system and focusing on discussions regarding the direction of long-term management.
52 NSK REPORT 2020
Outside Directors
(cid:12255)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.
!
(cid:12255)Supporting System
NSK provides opportunities for outside directors to attend meetings
of the operating organizations and visit business facilities in Japan
and overseas, which enables them to learn directly about the state of
business execution in order to deepen their understanding of NSK’s
business and matters specific to NSK.
In addition, NSK holds meetings comprised of outside directors to
facilitate information exchange and foster shared understanding among
outside directors and executive officers. While valuing these meetings
as an opportunity to freely share opinions, the Board secretariat follows
up on any relevant matters as appropriate to improve the effectiveness
of the Board of Directors.
Fiscal 2019 results
● Visited domestic business facilities (production bases and technology bases)
Visits to 7 locations, with 9 outside directors participating in all
● Meetings of executive organizations
All outside directors participated
● External exhibitions
4 outside directors attended
(cid:12255)Outside Director Attendance and the Three Committee Systems
● Chair
〇 Members
Name
Date Appointed
as Director
Attendance at Board of Directors
and Committee Meetings in FY2019
Composition of Each Committee from June 2020
Board
Nomination
Audit
Compensation
Nomination
Audit
Compensation
Teruhiko Ikeda June 2015
Hajime Bada June 2018
Akemi Mochizuki
July 2018
Toshio Iwamoto June 2019
Yoshitaka Fujita June 2019
〇
100%
(10/10)
〇
90%
(9/10)
〇
100%
(10/10)
〇
100%
(7/7)
〇
100%
(7/7)
Mitsuhiro Nagahama June 2020
ー
〇
100%
(15/15)
●
100%
(5/5)
●
100%
(15/15)
〇
100%
(4/4)
ー
ー
●
100%
(8/8)
〇
100%
(7/7)
ー
ー
●
〇
ー
ー
●
〇
〇
〇
●
※Each of the outside directors has been registered with the Tokyo Stock Exchange as an independent director.
※ On June 25, 2019, Toshio Iwamoto was appointed to the Board of Directors and Compensation Committee, and Yoshitaka Fujita was appointed to the Board of Directors and Nomination
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 2019 differ.
※Teruhiko Ikeda retired as director on June 30, 2020.
Internal Control
Having stipulated its basic policy on the establishment of internal control
systems, which forms its basic policy for the appropriate and effective
functioning of global Group management and internal control functions,
NSK is working to strengthen its Group-wide internal control systems.
This basic policy consists of matters relating to the development of
the systems necessary 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 ̶and matters necessary for the Audit
Committee in the performance of its duties.
The Board formulates this basic policy, periodically confirms the
development of systems as well as the status of operations and oversees
effectiveness. Based on this policy, Executive Officers establish the
specific systems (covering the organization, personnel, decision-making,
reporting and auditing as well as the internal rules and regulations
system that supports them) while reporting on the status of operations
to the Board of Directors. Reporting directly to the CEO, the Internal
Audit Department is responsible for conducting audits to determine the
legality, adequacy, and efficiency etc. of operations and for the monitoring
of business execution from a standpoint independent from the auditees.
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 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
NSK REPORT 2020
53
Foundation Supporting Sustainability
Corporate Governance
Directors/Officers’ Compensation
Compensation for Directors and Executive Officers, Policy on Determining Compensation Amounts
and Calculation Methods
As a Company with Three Committees (Nomination, Audit, and Compensation), NSK makes decisions on executive compensation structure,
compensation levels, and individual compensation, etc, at a Compensation Committee chaired by an independent director, and based on advice
from external consultants as well as objective information on compensation levels and trends at other companies.
The Company will determine compensation for director and executive officer positions separately. When a director also serves as an
executive officer, the total of each respective compensation amount shall be paid. For directors who also serve as executive officers, stock-based
compensation will not be provided for the director position.
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.
Executive officer compensation package
① Basic compensation
② Performance-based compensation
a) Short-term
performance-based
compensation
b) Mid- to long-term
performance-based
stock compensation
4
6
①Basic 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.
②Performance-based compensation
The performance-based compensation consists of a short-
term performance-based compensation and a mid- to long-
term performance-based stock compensation.
a) 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.
b) 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
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 3 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.
①Basic 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.
②Stock compensation
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, 2019, and March 31, 2020, was as follows.
Classification
Compensation, etc., Total
( ￥ Millions)
Directors (internal)
Directors (outside)
Executive Officers
72
77
1,447
No. of Directors/
Officers
Basic Compensation
Amount
(￥ Millions)
65
7
7
33
61
1,058
Short-term Performance-Based Compensation
No. of Directors/
Officers
Amount
(￥ Millions)
ー
ー
ー
ー
31
110
No. of Directors/
Officers
Stock Compensation
Amount
(￥ Millions)
7
1
7
36
15
279
1. Compensation （excluding stock compensation） for directors （internal） includes compensation for directors who also serve as executive officers.
2. The amount of performance-based salary is the planned amount to be paid on July 1, 2020, based on the results for the year ended March 31, 2020.
The amount of performance-based salary paid on July 1, 2019, based on the results for the year ended March 31, 2019, was ¥410 million.
3. The amount of stock compensation is the amount recorded as expenses for the current fiscal year.
4. Figures listed above are rounded down to the nearest 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, 2019, and March 31, 2020, was as follows.
Name
Consolidated
Compensation, etc.,
Total ( ￥ Millions)
Title
Company
Amount for Each Item of Consolidated Compensation, etc. (￥ Millions)
Basic Compensation Short-term Performance-
Stock Compensation
Based Compensation
Adrian Browne
103
Executive officer
NSK
Jean-Charles Sanchez
129
Executive officer
NSK
87
119
14
7
1
2
54 NSK REPORT 2020
Takeover Defenses
NSK renewed its response measures to large-scale purchases of the
Company’s shares (“Takeover Defenses”) after obtaining shareholder
approval at the Ordinary General Meeting of Shareholders held in June
2020. At the Ordinary General Meeting of Shareholders, the resolution
passed with 74.17% approval (reference: the previous resolution to
maintain these measures passed with 71.03% approval in June 2017).
NSK is a stock company whose shares are traded on capital
markets, and therefore, NSK believes that, in the case of a large-scale
purchase of its shares, the decision whether to accept such a purchase
should ultimately be left to the shareholders.
In light of recent social and economic conditions, as well as the state of
the capital markets, however, there is a possibility that a sudden and unsolicited
large-scale purchase of the Company’s shares could occur without necessary
and sufficient information being disclosed, and without an opportunity to consider
the proposal being given to the shareholders and investors of the Company,
or without NSK’s Board of Directors being provided with the information and
time to express its opinion and make an alternative proposal. Such large-scale
purchases of shares could damage the Company’s corporate value and the
common interests of its shareholders, such as the case in which a purchaser
does not intend to manage the Company reasonably or in good faith.
For this reason, NSK decided to introduce and subsequently renew
Takeover Defenses for the purpose of securing and enhancing corporate value
and the common interests of its shareholders, believing that shareholders, who
will make the final decision on buying and selling stock, should have an adequate
understanding of any proposals for the large-scale purchase of shares by the
Large-Scale Share Purchaser, so they can make an appropriate decision.
For details of NSK’s Takeover Defenses, please see the “Continuation of the
Response Measures to Large-Scale Purchases of the Company Shares (Takeover
Defenses),” which is published on the Company’s website at the address below:
https://www.nsk.com/company/governance/index.html
!
Major changes as of June 2020:
1. Members of the Independent Committee are appointed from Independent directors.
2. It was clarified that no money or other economic benefits will be transferred in consideration for the acquisition of new
share options allotted to the Large-Scale Share Purchaser.
3. The countermeasure of the Takeover Defenses was limited to an allotment of share options without contribution.
NSK Receives “2019 Corporate Governance of the Year” Award
NSK was selected as a “Winner Company” in the 2019 Corporate Governance of the Year Awards* administered by the Japan
Association of Corporate Directors.
The Corporate Governance of the Year award was established by the Japan Association of Corporate Directors in 2015. The
award is bestowed on companies operating in Japan based on their initiatives to revamp governance structures toward realizing
healthy and sustainable business growth over the mid- to long- term. Evaluation also includes measuring company compliance
with the Corporate Governance Code set out by the Tokyo Stock
Exchange and the Practical Guidelines for Corporate Governance
Systems defined by the Ministry of Economy, Trade and Industry.
As a result of its evaluation, the Award Committee selected
NSK as a “Winner Company” for management that takes corporate
governance into account and for conducting initiatives to revamp
governance structures toward realizing healthy and sustainable
business growth over the mid- to long- term.
Moving forward, NSK will continue to evolve and adapt its
governance structures to further enhance the sustainability of the
Company and its operations over the long term.
*“ Corporate Governance of the Year” is a registered trademark of the Japan Association of
Corporate Directors.
At the award ceremony on February 25, 2020.
Yoshihiko Miyauchi (left; Chairman of the Japan Association of Corporate Directors)
and Saimon Nogami (right; Senior Executive Vice President of NSK).
NSK REPORT 2020
55
Foundation Supporting Sustainability
Interview with NSK’s Outside Directors
Toshio Iwamoto
Outside Director, Independent Director
Chief Corporate Adviser of NTT Data Corporation,
External Auditor of IHI Corporation,
Outside Director of Daiwa Securities Group Inc.
Yoshitaka Fujita
Outside Director, Independent Director
Executive Advisor of
Murata Manufacturing Co., Ltd.
NSK has adopted a “Company with Three Committees” system as its organizational design and is engaged in efforts to
enhance its corporate governance system in order to increase sustainable growth and mid- to long-term corporate value.
Just this year, the Company restructured its Board of Directors to include a majority of outside directors.
We asked some of these outside directors for their thoughts on corporate governance at NSK.
Q1
What are your thoughts on the role expected of you as
an outside director and on NSK’s future business strategy?
Mr. Iwamoto
I come from a company that has expanded globally in
the IT sector. Coincidentally, I conducted research on
bearings when I was a student, so I believe that I have a
solid understanding of bearing technology. From what I
have seen in the year since being appointed as an outside
director, I think that NSK is a truly focused and outstanding
company. That being said, I feel that NSK has a strong
tendency to think of the future of its business within the
confines of the Company’s relationship with its customers,
end product manufacturers. In considering the future of
the business 10 or 20 years down the road, it is important
to think proactively, one or even two steps ahead, about a
larger vision and strategy. This is where I think I can apply
my experience.
Mr. Fujita
I was the CFO of an electronic components manufacturer
that has expanded its business globally. Since it was
a business-to-business company like NSK, I have
experienced a similar type of organizational management
and business operations. Throughout that experience, I
paid close attention to developing and executing strategies
to gain a competitive edge. Although NSK’s main market
and core technologies are different, I strive to offer
recommendations on what it will take to set NSK apart
from the competition in the manufacturing industry and
increase profitability. I also have overall management
experience in finance, human resources, IT and intellectual
property, and hope to offer advice in these areas as well.
Q2
With regard to governance, NSK works to clearly separate
the functions of oversight and execution of business
operations in the way it runs its Board of Directors. What do
you think NSK’s strengths are in this area, and what do you
think NSK should change?
Mr. Iwamoto
NSK has increased the number of outside directors and
is making a considerable effort to shift the Board of
Directors into a monitoring role. In doing so, the execution
of business operations will be left to the executive officers,
and the Board of Directors will focus on oversight. I think
that this change in itself is great, and we will do our best
to fulfill our newly focused role. Now, as to what said
monitoring and oversight specifically entails, that is an area
of concern for companies around the world.
This is where the Audit Committee becomes essential.
I believe that NSK is now in a transitional period during
which the Audit Committee must determine whether the
execution of business operations is actually in keeping
with laws and ordinances, and whether it contributes to
the growth of the Company. To that effect, it is extremely
important to discuss what kind of company NSK will
become and what it will offer to all its stakeholders.
56 NSK REPORT 2020
Without first clarifying this, the Company will not be able to
determine how to execute business operations, much less
how to monitor them.
Mr. Fujita
No matter what organizational structure a company
adopts, it cannot increase its corporate value through
monitoring alone. Therefore, management is vital. The
Board of Directors should not only determine the details of
executing business operations but also engage in broader
discussions on what direction the Company should take,
whether that be business strategies or the Mid-Term
Management Plan. The Board of Directors would then
monitor whether those strategies and plans are being
properly implemented.
In the past year, there has been a lot of discussion on the
execution of business operations, and we have talked
about changing the subject of our discussions to agenda
items that are a little more strategic in nature. Rather
than getting hung up on the small details, the Board of
Directors should be focused on the big picture such as the
major direction of the Company or the Company’s strategic
differentiators. We should be discussing things like
marketing and how to take the business in a new direction,
and whether the Company is properly accomplishing
those things. As these discussions unfold, the Board of
Directors should change its approach to monitoring in turn.
We outside directors hope to provide wide-ranging advice
on aspects of the business that go unnoticed by internal
personnel.
Q3
Please tell us about the activities being carried out by the
committees.
Mr. Iwamoto
The Compensation Committee spent 3 years revising the
compensation system for directors and executive officers,
and the new system went into effect last fiscal year. In
observing the system over the year, I believe that NSK’s
compensation system and its design present a rational,
or rather, transparent and straightforward framework
for remuneration. Between basic compensation and
performance-based compensation, basic compensation
constitutes 40%. It is a well-designed system so much so
that I feel it is a bit inflexible.
Mr. Fujita
I am a member of the Nomination Committee, which is
chaired by Outside Director Bada. Our activities include
CEO succession planning and planning for the training
and succession of directors and top executive officers, as
required by Japan’s Corporate Governance Code. Outside
directors discuss the objectivity and appropriateness
of nominees, including the selection of outside director
candidates, placing an emphasis on diversity. I feel that our
discussions have been versatile and multifaceted.
Q4
When NSK conducts a merger or an acquisition, what do you
consider from the standpoint of an outside director?
Mr. Fujita
The Company should have a basic policy on mergers
and acquisitions. Whether buying technology, acquiring
products, obtaining new customers or starting a new
business in a totally different area, it is important for the
Company to take its own initiative and act on it. Of course,
for NSK to grow, the Company needs to seek out the
business areas or companies it needs to acquire to make
up for what it lacks in its Mid-Term Management Plan and
future vision. After closing on a merger or an acquisition,
the first 90 days are vital̶success hinges on post-merger
integration. These are the points that NSK should pin down
in conducting a merger or an acquisition.
Mr. Iwamoto
In the 6 years that I was a company president, we achieved
more than ¥800 billion in sales growth through a few
dozen global mergers and acquisitions. I feel the same
as Mr. Fujita̶NSK will flounder without its own policy on
mergers and acquisitions. A mergers and acquisitions
advisor will not work with the Company all the way through
post-merger integration. Unfortunately, however, I have
the feeling that NSK has not properly developed its own
policy or method for conducting mergers and acquisitions.
Mergers and acquisitions are not the be-all and end-all,
but as it is one strategy for growth, how NSK thinks about
them moving forward will be a critical factor.
Q5
What kind of discussions were held in the Board of Directors
meeting regarding the continuation of the takeover defenses
approved at this year’s General Meeting of Shareholders?
Mr. Fujita
In considering recent large-scale share purchases, we
can see cases that have clearly damaged corporate
value and the common interests of the shareholders.
Amid the COVID-19 pandemic, valuations of companies
in the automotive industry have dropped lower than their
accepted corporate value, increasing the risk of a takeover.
Under such circumstances, I feel that having these
takeover defenses in place is appropriate to ensure that the
Company has sufficient time to handle a large-scale share
purchase.
That being said, takeover defenses must not turn into
a self-preservation scheme for management. In carefully
examining NSK’s takeover defense scheme, the decision to
trigger takeover defenses is essentially determined by the
General Meeting of Shareholders. Even in the exceptional
case that the decision to trigger takeover defenses is
made by the Board of Directors, the recommendation of an
independent committee comprising solely outside directors
is respected to the greatest extent possible, and the Board
of Directors cannot trigger defense measures without a
unanimous vote. I approved the measures because this
scheme eliminates the self-preservation aspect, and I
thought that the measures were extremely well thought-
out and that it is best to have them in place.
NSK REPORT 2020
57
Foundation Supporting Sustainability
Interview with NSK’s Outside Directors
Mr. Iwamoto
I agree with Mr. Fujita, but I also pay attention to the
Financial Instruments and Exchange Act and the Foreign
Exchange and Foreign Trade Act. The fact that the Foreign
Exchange and Foreign Trade Act was revised to lower the
threshold for prior notification of stock purchases from
10% to 1% is a significant development. NSK also falls
into the scope of industries designated for foreign direct
investment screening by the Ministry of Finance, so I think
it is necessary to pay close attention to those world trends
and how discussions on mergers and acquisitions or large-
scale share purchases develop in other countries.
Furthermore, as I stated in the Board of Directors
meeting, last year’s Business Roundtable issued a
statement approved by all 181 American CEO members
declaring a move away from shareholder capitalism. There
was also a discussion on the role of companies in society
at this year’s World Economic Forum, which indicated a
shift away from the emphasis on shareholder primacy and
ROE to an emphasis on conducting business in a way that
benefits all stakeholders̶a move in the opposite direction
of how business has been conducted until now. Our
discussion on this also included ESG and SDGs, and we
additionally took the perspective of foreign investors and
shareholders into account as we came to our conclusions
on the takeover defenses.
Q6
What expectations do you have related to the growth of
NSK’s business and the Company’s contribution to society in
the future? In addition, what do you think are the associated
risks and areas in which NSK is lacking?
Mr. Fujita
In looking at materials such as the NSK Report, Vision 2026
establishes 3 key management tasks: business growth
and profitability, ESG management and utilization of robust
managerial resources. The 6th Mid-Term Management Plan
is based on these tasks. The plan sounds truly magnificent,
No matter what organizational structure a company adopts, it
cannot increase its corporate value through monitoring alone.
Therefore, management is vital. The Board of Directors should
not only determine the details of executing business operations
but also engage in broader discussions on what direction the
Company should take, whether that be business strategies
or the Mid-Term Management Plan. Outside directors have a
role to play in monitoring whether these discussions are being
properly undertaken.
58 NSK REPORT 2020
and if NSK can accomplish all of it, the Company will have
achieved a level of excellence. Now that the COVID-19
pandemic has occurred, the world might look very different
moving forward. However, NSK needs to properly follow
through with this Mid-Term Management Plan, even in an
unsparing financial environment. If the Company decides
to do something, it is important to see it through, although
some small adjustments might be necessary.
NSK can properly execute and analyze the tasks
immediately at hand, but I feel that the Company’s ability to
accomplish mid-term objectives is weak. I think that NSK
would be an even better company if it were to further clarify
the KPIs for its mid-term objectives and a time line for how
to achieve them within 3 years.
As NSK is a manufacturer, it is important to engage
in new product development̶particularly product
development that distinguishes and sets the Company
apart from its competition. This is something I would like
to monitor in Board of Directors meetings moving forward.
In addition, 70% of NSK’s sales are in the automotive
market. Although it might take some time, NSK should aim
to stabilize its operations by diversifying sales in existing
markets or increasing sales in new markets to reduce its
reliance on the automotive market.
Mr. Iwamoto
This year, many employees have been working from home,
and we have seen an increase in the utilization of web
conferencing systems to conduct business. I have always
said that we need to undergo a digital transformation (DX),
and I feel that the COVID-19 pandemic has initiated this
across all industries. I think that NSK has also in a sense
taken a serious blow from the pandemic, and this year has
become a critical juncture in which the Company really
needs to think about how it must change.
In looking ahead to 2050, NSK with its 100 years of
history has been an excellent company until now but
has gotten this far by doing its best only as a parts and
components manufacturer. The Company has not yet
broken out of that shell. That might be fine to make it to
2050. As with the Japanese economy, the world economy
is always growing. If the automotive industry expands, NSK
will grow along with it and see an increase in revenue and
profit. However, when the world undergoes a major digital
transformation, putting all the Company’s eggs into one
basket will not work anymore. A well-balanced distribution
across at least 3 baskets will be necessary. There are a
variety of aspects to consider, whether that be products or
business areas.
That is why mergers and acquisitions are necessary. If
NSK has a goal and considers whether it needs to buy into
a region or into a market to achieve that goal, then it will
become apparent how the Company should transform by
2050. In that sense, I think that now is the time for NSK to
discuss and seriously think about what kind of company it
wants to become.
Moreover, in the end, NSK is a manufacturer,
and a manufacturer cannot exist without technology.
The Company needs to create products through new
development and technology that will be indispensable to
the progress and development of society, whether that be
in terms of ESG or SDGs. NSK must secure profits along
with the recognition it gains for providing these products to
the world. I think discussions on strategy will be extremely
important moving forward, and I would be happy to be
involved in them in some way as an outside director.
Q7
From your perspective, how do you see the future of the
global management of NSK?
Mr. Fujita
In becoming a global company, it is important to determine
how to install the management function at each business
site and how to delegate authority. If these are not
firmly established, including at the Group headquarters,
globalization will not proceed smoothly. For instance, if
the research-and-development function is basically all
located in Japan, it is important to determine how much
authority to delegate to entities outside of Japan. Will
overseas entities make arrangements for research and
development? Will they only be allowed to carry out product
design? In the end, if the distribution of business functions
and authority is not properly established, overseas sites
might act independently and cause a variety of issues. I am
just speaking in general, but this is a critical point.
Mr. Iwamoto
With 20,000 employees outside of Japan, it is important to
have a mechanism for work-style reform and instilling a
sense of value in employees.
Mr. Fujita
The Company’s mission statement is particularly important,
as is ensuring that employees are invested in that mission
statement. The degree to which employees share an
understanding of the Company’s mission statement, as
well as the value and purpose of the Company, is all the
more important when dealing with employees in different
countries, as different cultures and customs can involve
different ways of thinking.
Mr. Iwamoto
Global corporations like Johnson & Johnson and IBM share
a creed-like corporate philosophy that employees around
the world take pride in. Without going to those lengths,
I do not feel that a company truly has become a global
company. That being said, I think that this is difficult to
achieve.
NSK must secure profits along with the recognition it
gains for providing these products to the world. I think
discussions on strategy will be extremely important
moving forward, and I would be happy to be involved in
them in some way as an outside director.
In NSK’s case, to what extent the Company can ingrain
the concept of Motion & Control™ in the minds of its
employees is important, and the Company needs a variety
of tools at its disposal to accomplish that. In that sense, the
NSK Report is a crucial tool, so I hope that NSK continues
to create good reports and that all employees who work
at NSK understand and take ownership of creating NSK’s
value.
NSK REPORT 2020
59
Foundation Supporting Sustainability
Dialogue with Shareholders and Investors
NSK’s Approach
NSK discloses management information promptly and fairly, and is actively engaged in dialogue with shareholders and investors. In addition, the Company
strives to achieve stable shareholder returns and pursues sustainable growth together with higher corporate value over the mid- to long- term. In this way, we
seek to continue to be a company that meets the expectations of our stakeholders, including shareholders and investors.
(cid:12255)General Meeting of Shareholders
Being cognizant that the General Meeting of Shareholders is a venue for active dialogue with shareholders, we set its date to avoid periods concentrated with the
shareholders’ meetings of other companies (at least 2 days prior to such a concentrated period) and promptly issue and post convocation notices and reports (normally
posted to our website 28 days prior to the date of the meeting), among other efforts we make to create favorable conditions for the meeting.
The 159th Ordinary General Meeting of Shareholders for the year ended March 31, 2020 (held June 30, 2020)
(cid:12255)Number of shareholders present: 25 (fewer than typical years to prevent the spread of the novel coronavirus)
(cid:12255)Ratio of shareholder voting rights exercised: 84.6%
For this fiscal year, we held the meeting on June 30 as processing consolidated financial results was delayed because of the global novel coronavirus (COVID-19)
pandemic. In addition, 27 days prior to the date the meeting was held the convocation and report were registered with the Tokyo Stock Exchange, and the
following day they were posted to our website. They were also issued 2 weeks prior to the date of the meeting.
(cid:12255)Dialogue with Investors
Dialogue with Institutional Investors
We hold financial conferences to discuss our financial results and Mid-
Term Management Plan where top management directly communicates a
variety of topics. Moreover, we hold some 20 events every year to engage
in constructive dialogue regarding our management strategy and ESG.
In fiscal 2019, not only did we discuss matters concerning our
business strategy and finances but also held dialogues that covered our
efforts for NSK’s ESG management, as outlined in the 6th Mid-Term
Management Plan. Institutional investors provided their assessment of
our initiatives concerning corporate governance and items regarding
ESG as a mid- to long-term management issue, and we received their
requests for ongoing dialogue and ample information disclosure.
Number of dialogue opportunities in fiscal 2019: Total of 445 companies (excluding large meetings)
Financial conferences (large meetings)
2 times for a total of 207 companies
Individual IR interviews
Total of 257 companies
Institutional investor engagement visits
Total of 25 companies
President’s small meetings
5 times for a total of 60 people
IR road shows outside Japan
Europe/North America/Asia (Hong Kong, Singapore, Taiwan)/Australia
4 times, 55 companies
Conference participation for overseas investors
4 times for a total of 44 companies
Business site interviews
Total of 4 companies
Dialogues with Individual Investors/Individual Shareholders
We hold briefings for individual investors multiple times a year, and additionally, with the objective of bolstering dialogue with NSK’s individual
shareholders, from 2018 we have been conducting plant tours. We have also created a website for individual investors in order to give them a better
understanding of the Company, among other efforts, and proactively disclose information and respond to queries.
Fiscal 2019
(cid:12255)Briefings for individual investors: Held 7 times, with 236 participants
(cid:12255) Plant tours for individual shareholders: Held 2 times
(Haruna Plant, Ishibe Plant), with 49 participants
“To Our Individual Investors” website (Japanese only)
https://www.nsk.com/jp/investors/individual.html
!
Scene during a plant tour for individual shareholders
NSK continues to properly convey management direction, business strategy and other information, and strives for communication that facilitates
accurate assessments and understanding.
At NSK, having determined our “Disclosure Policy,” we strive to conduct the disclosure of information in a fair manner that does not give rise to
discrepancies in information among market participants.
For further information on our Disclosure Policy, please access the link below to our website.
https://www.nsk.com/investors/management/disclosurepolicy.html
!
60 NSK REPORT 2020
Management
Toshihiro Uchiyama
Director, Representative,
President and Chief Executive Officer
[Number of Shares Owned: 94,800]
Saimon Nogami
Director, Representative,
Senior Executive Vice President,
Chief Financial Officer
[Number of Shares Owned: 53,200]
Akitoshi Ichii
Director, Representative, Executive Vice President,
Responsible for Administrative Divisions,
Head of Corporate Planning Division Headquarters,
Responsible for Europe and the Americas,
Responsible for Investor Relations Office
[Number of Shares Owned: 60,261]
Toshihiko Enomoto
Director
[Number of Shares Owned: 22,916]
Hajime Bada
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: 3,800]
Akemi Mochizuki
Outside Director, Independent Director,
Certified Public Accountant,
Employee of Akahoshi Audit Corporation,
Outside Director of Tsumura & Co.
[Number of Shares Owned: 3,800]
Toshio Iwamoto
Yoshitaka Fujita
Mitsuhiro Nagahama
Outside Director, Independent Director,
Chief Corporate Adviser of NTT Data Corporation,
External Auditor of IHI Corporation,
Outside Director of Daiwa Securities Group Inc.
[Number of Shares Owned: 800]
Outside Director, Independent Director,
Executive Advisor of
Murata Manufacturing Co., Ltd.
[Number of Shares Owned: 2,800]
Outside Director, Independent Director,
External Auditor of Kuraray, Co., Ltd.,
Outside Director of Tokyo Tatemono, Co., Ltd.,
Outside Director of Azbil Corporation
[Number of Shares Owned: −]
Executive Officers and Group Officers
President and Chief Executive Officer
Senior Vice Presidents
Vice Presidents
Toshihiro Uchiyama
Senior Executive Vice President
Saimon Nogami
Representative Executive Vice President
Akitoshi Ichii
Executive Vice Presidents
Masatada Fumoto
Nobuo Goto
Tomoyuki Yoshikiyo
Hideki Ochiai
Hiroya Miyazaki
Kenichi Yamana
Nobuaki Mitamura
Tatsuya Atarashi
Kunihiko Akashi
Masaru Takayama
Guoping Yu
Keita Suzuki
Seiji Ijuin
Susumu Ishikawa
Hiroya Achiha
Hayato Omi
Tamami Murata
Hiroyuki Tsugimoto
Jean-Charles Sanchez
Hisakazu Tadokoro
Narihito Otake
Hiromichi Takemura
Tatsufumi Soda
Ulrich Nass
Michio Ozaki
Masato Kitou
Natsuki Sensui
Hidenori Oka
Brian Parsons
Shinji Miyata
Gen Murayama
Group Officers
Seong-Il Jo
Minoru Arai
Katsumi Kobayashi
Masami Shinomoto
： Nomination Committee
： Compensation Committee
： 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 fiscal 2019 (the 159th) Ordinary General Meeting of Shareholders of NSK and Independent Directors/Auditors Notifications
published on the following websites of the Tokyo Stock Exchange.
2. Number of the Company’s shares owned
as of March 31, 2020
[Notice of the Ordinary General Meeting of Shareholders] https://www2.tse.or.jp/disc/64710/140120200603435016.pdf
!
[Independent Directors/Auditors Notifications] (Japanese only) https://www2.tse.or.jp/disc/64710/140120200603434628.pdf
!
NSK REPORT 2020
61
Data Section
Management’s Discussion and Analysis of Financial Position,
Results of Operations and Cash Flows
1.
Business Overview and the Results for the Year Ended March 31, 2020
（Billions of yen）
Sales
Operating income
(Operating income margin)
Income before income taxes
Net income attributable
to owners of the parent
FY2018
FY2019
991.4
79.3
〈8.0%〉
79.2
55.8
831.0
23.6
〈2.8%〉
24.1
17.4
Increase/
Decrease
YOY
-160.3
-55.7
-55.2
-38.4
The global economy during the year ended March 31, 2020,
remained sluggish, given the uncertainty surrounding concerns
over U.S.-China trade friction and the U.K.’s withdrawal from the
European Union, as well as rising tensions in the Middle East. In
Japan, exports mainly to China remained stagnant. In the U.S.,
economic slowdown in the manufacturing industry became more
pronounced in the second half of the fiscal year. The European
economy slowed due to stagnation in the manufacturing industry,
primarily the automotive industry. In China, both overseas and
domestic demand decelerated against the backdrop of trade
friction with the U.S. and the slump in the automotive market
continued. In addition, at the end of the fiscal year, COVID-19
spread globally, primarily in China, and largely affected each
nation's economic activities. Accordingly, uncertainty over the
economic outlook increased.
In this economic environment, consolidated sales for the
year ended March 31, 2020 totaled ¥831,034 million, a year-on-
year decrease of 16.2%, and operating income totaled ¥23,604
million, a year-on-year decrease of 70.2%. Income before income
taxes was ¥24,065 million, a year-on-year decrease of 69.6%. Net
income attributable to owners of the parent was ¥17,412 million,
a year-on-year decrease of 68.8%.
For details regarding the market environment and results
by business segment, please refer to P. 26 for the Industrial
Machinery Business and P. 28 for the Automotive Business.
Operating Income: Factors Behind Change（FY2018 ⇒ FY2019）
(Billions of yen)
79.3
Volume/ Mix
-59.3
Reduction of
external
procurement
costs, etc.
+5.8
Decline in
sales price/
Price increase
-3.0
Reduction
of costs
+6.7
Effect of
exchange rate
fluctuations
-4.7
Other
operating
expenses/
Equity
method
profits
-1.2
23.6
FY2018
-55.7
FY2019
2.
Analysis of Financial Position
Total assets were ¥1,029,884 million, a decrease of ¥56,572
million compared to total assets as of March 31, 2019, mainly
because of the decreases in trade receivables and other
receivables and other financial assets (non-current). Trade
receivables and other receivables declined primarily due to a
drop in sales. The decrease in other financial assets (non-current)
resulted from the partial sales of listed shares owned by the
Company and drop in market value due to a decline in share price.
Total liabilities were ¥503,365 million, a decrease of ¥22,690
million compared to total liabilities as of March 31, 2019, mainly
due to the decrease in trade payables and other payables.
Total equity totaled ¥526,518 million, a decrease of ¥33,882
million compared to total equity as of March 31, 2019, mainly
due to the decrease in other components of equity, despite the
increase in net income attributable to owners of the parent.
Assets
Current assets
Non-Current assets
（Billions of yen）
1,086.5
1,029.9
Change
from FY18
-56.6
-56.6
507.6
466.5
-41.2
-41.2
Liabilities / Total equity
Current liabilities
Non- Current liabilities
Ratio of equity attributable to owners of
the parent to total assets
Total equity
（Billions of yen）
1,086.5
Change
from FY18
1,029.9
-56.6
-56.6
285.4
217.9
-67.5
-67.5
240.6
285.4
+44.8
+44.8
49.4％
49.1％
62 NSK REPORT 2020
578.8
563.4
-15.4
-15.4
560.4
526.5
-33.9
-33.9
FY18
End of Q4
FY19
End of Q4
FY18
End of Q4
FY19
End of Q4
3.
Cash Flows
Total cash and cash equivalents at the end of the period under review were ¥137,298 million, an increase of ¥7,333 million compared to
total cash and cash equivalents as of March 31, 2019.
Trends in Cash Flows
(Billions of yen)
Cash flows from operating activities
Cash flows from investing activities
Free cash flows
120
100
80
60
40
20
0
-20
-40
-60
-80
Net cash flow provided by operating activities
Net cash flow provided by operating activities totaled ¥72,387
million, a decrease of ¥20,230 million, compared to the
previous year after adding and subtracting the depreciation and
amortisation, working capital, and so forth from the income
before income taxes of ¥24,065 million.
Net cash flow used in investing activities
Net cash flow used in investing activities totaled ¥39,784 million,
a decrease of ¥32,888 million compared to the previous year.
This includes ¥47,876 million in purchases of property, plant and
equipment.
Net cash flow used in financing activities
Net cash flow used in financing activities totaled ¥21,333 million,
an increase of ¥856 million compared to the previous year. This
main cash inflows were ¥17,688 million in proceeds from long-
term loans, and ¥30,000 million in proceeds from issuance of
corporate bonds. Meanwhile, the main outflows were ¥21,788
million in repayments of long-term loans, ¥20,000 million in
payments for redemption of corporate bonds, and ¥20,483 million
in dividends paid.
4.
Summary of Capital Investment
NSK’s basic policy is to sustain growth, enhance the
competitiveness of its businesses, and strategically invest in the
development of new technologies. During the fiscal year under
review, amid a sluggish global economy dragged down by U.S.-
China trade friction, NSK spent a total of ¥54,927 million (a
decrease of ¥26,175 million compared with the previous fiscal
year) on capital investments for projects related to “safety,
quality, compliance and the environment,” its core values; critical
projects to increase productivity; projects to upgrade facilities;
and ICT projects to advance work-style reforms.
Please see P. 43 for information about R&D.
108.6
83.7
92.6
72.4
67.9
-45.2
-68.1
-48.4
-54.2
-39.8
-53.0
-20.5
-21.3
-39.8
-72.7
FY2015
FY2016
FY2017
FY2018
FY2019
Capital Expenditure, Depreciation and amortisation
(Billions of yen)
90
Capital Expenditure
Depreciation and amortisation
81.1
68.8
60
55.0
58.6
43.0
43.4
46.8
48.8
54.9 53.9
30
0
FY2015
FY2016
FY2017
FY2018
FY2019
NSK Group Tax Policy
As the globalization of business advances, the NSK Group believes that the proper payment of taxes in the countries and regions
where it operates is one of the most fundamental and important social responsibilities that it should undertake. With this
understanding, the Group has established an NSK Group Tax Policy and is striving to ensure appropriate tax treatment. For more
details, please visit the website given below.
▶ https://www.nsk.com/investors/management/taxpolicy.html
NSK REPORT 2020
63
Data Section
Consolidated Statements of Financial Position (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
2019
(Millions of Yen)
2020
129,965
195,288
159,517
1,696
3,502
17,648
137,298
154,226
152,971
3,138
3,513
15,304
Total current assets
507,618
466,452
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
378,333
19,550
27,613
79,934
9,633
59,406
4,364
383,978
19,768
26,785
55,498
9,698
61,508
6,193
Total non-current assets
578,837
563,431
Total assets
1,086,456
1,029,884
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
130,333
101,145
85
4,004
49,841
97,193
71,806
159
3,474
45,305
285,411
217,939
175,467
8,677
31,128
19,530
5,839
228,707
8,160
24,764
18,345
5,447
240,643
285,426
526,055
503,365
67,176
80,456
405,842
67,176
80,426
400,720
（37,779） （37,662）
（10,308）
26,131
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity
64 NSK REPORT 2020
536,676
23,724
505,505
21,013
560,400
526,518
1,086,456
1,029,884
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)
2019
991,365
771,783
(Millions of Yen)
2020
831,034
677,511
219,581
153,522
141,808
5,493
3,987
130,238
2,282
1,961
79,279
23,604
2,661
2,710
79,229
20,491
58,738
55,809
2,928
107.46
107.24
3,409
2,948
24,065
5,956
18,108
17,412
696
34.00
33.91
Consolidated Statements of Comprehensive Income (IFRS)
Year ended March 31,
Net income
Other comprehensive income
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
2019
(Millions of Yen)
2020
Before tax effect Tax effect Amount (net) Before tax effect Tax effect Amount (net)
58,738
18,108
（4,423）
616 （3,807） 2,939 （1,194） 1,744
（9,276） 2,816 （6,460）（11,941） 3,607 （8,333）
125
（49）
75
（63）
18
（44）
Total items that will not be reclassified to profit or loss （13,575） 3,382 （10,192） （9,064） 2,430 （6,633）
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations （4,731）
Share of other comprehensive income of
investments accounted for using equity method
（20）
− （4,731）（22,150）
− （22,150）
−
（20） （459）
−
（459）
Total items that may be reclassified to profit or loss
（4,751）
− （4,751）（22,609）
− （22,609）
Total other comprehensive income
（18,326） 3,382 （14,944）（31,673） 2,430 （29,242）
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Owners of the parent
Non-controlling interests
43,794
40,803
2,991
（11,134）
（11,075）
（58）
NSK REPORT 2020
65
Data Section
Consolidated Statements of Changes in Equity (IFRS)
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
(Millions of Yen)
Equity attributable to owners of the parent
Issued capital Capital surplus Retained earnings Treasury shares
67,176
80,264
362,859
（17,815）
−
−
−
−
−
−
−
−
−
−
−
−
−
−
21
375
−
（235）
−
55,809
−
55,809
−
−
−
（21,514）
−
3,565
−
−
−
（20,053）
89
−
−
−
−
161
（17,948）
（19,963）
67,176
80,426
400,720
（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）
43,584
−
（6,537）
（6,537）
−
−
−
−
−
（3,551）
（3,551）
33,494
From April 1, 2019, to March 31, 2020
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
Other
Total transactions with owners, etc.
Closing balance
（3,645）
（15,006）
（3,645）
（15,006）
40,803
8,880
−
−
−
−
−
−
−
−
44,689
537,175
23,839
561,014
−
−
−
−
−
−
55,809
（15,006）
（20,053）
111
375
2,928
62
2,991
−
−
−
58,738
（14,944）
43,794
（20,053）
111
375
（21,514）
（2,816）
（24,330）
（235）
（290）
（525）
（3,551）
14
−
14
（3,551）
（41,302）
（3,106）
（44,408）
5,234
26,131
536,676
23,724
560,400
Equity attributable to owners of the parent
Issued capital Capital surplus Retained earnings Treasury shares
67,176
80,426
400,720
（37,779）
(Millions of Yen)
−
−
−
−
−
−
−
−
−
−
−
−
−
41
（11）
−
−
29
17,412
−
17,412
−
−
−
（20,501）
8,211
（12,290）
−
−
−
（11）
128
−
−
−
117
67,176
80,456
405,842
（37,662）
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
（12,598）
33,494
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
Other
Total transactions with owners, etc.
−
（21,864）
（21,864）
−
−
−
−
−
−
Closing balance
（34,462）
−
（8,376）
（8,376）
−
−
−
−
（7,951）
（7,951）
17,166
5,234
−
1,753
1,753
−
−
−
−
−
−
26,131
536,676
23,724
560,400
−
（28,487）
17,412
（28,487）
696
（755）
18,108
（29,242）
（28,487）
（11,075）
（58）
（11,134）
−
−
−
−
（11）
169
（11）
（20,501）
（7,951）
259
−
−
−
（2,652）
−
（11）
169
（11）
（23,154）
259
（7,951）
（20,095）
（2,652）
（22,748）
6,988
（10,308）
505,505
21,013
526,518
66 NSK REPORT 2020
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 of other financial assets
Other
Net cash used in investing activities
Financial activities
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of corporate bonds
Payments for redemption of corporate bonds
Repayments of lease liabilities
Acquisition of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Other
2019
(Millions of Yen)
2020
24,065
53,926
79,229
48,801
621
（2,368）
2,600
(5,493）
18,602
（17,859）
（10,856） （26,888）
（1,127）
（80）
（2,145）
2,523
（2,282）
34,335
579
（1,354）
111,924
82,905
7,484
（2,642）
4,693
（2,581）
（24,149） （12,629）
92,617
72,387
（73,379）
1,090
（38）
6,829
（7,176）
（47,876）
1,638
（22）
13,606
（7,131）
（72,673） （39,784）
34,333
17,688
（46,809） （21,788）
40,000
−
−
30,000
（20,000）
（4,157）
（2）
（20,044）
（21,495） （20,483）
（2,652）
（2,892）
（3,569）
61
Net cash used in financial activities
（20,477） （21,333）
Effect of exchange rate changes on cash and cash equivalents
（784）
（3,934）
Net increase (decrease) in cash and cash equivalents
（1,318）
7,333
Cash and cash equivalents at the beginning of the period
131,283
129,965
Cash and cash equivalents at the end of the period
129,965
137,298
NSK REPORT 2020
67
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.
NSK products
are used here too?
Bearings are called the staple of industry. What’s more, NSK’s bearings are used
in unexpected places, such as yo-yos, fidget spinners and spintops. Through such
products that use NSK’s bearings, we see opportunities to get more people aware
of bearings in objects where they ordinarily would not notice them.
Yo-yo:
Developed with yo-yo world champion, the yo-yo using NSK bearings sets a world record
● NSK’s bearings jointly developed with yo-yo world champion Mr. Takahiko
Hasegawa are used.
● NSK’s bearings are assembled in clean rooms at domestic plants.
● The area where the yo-yo string passes through was ground to specifications
for competitions.
This is surprising!
NSK’s high-precision bearings make yo-yos rotate well. In a competition
for the longest spinning yo-yo, the yo-yo using NSK bearings set a world
record, at 21 minutes and 21 seconds. Many of the contestants and world
champions use yo-yos with NSK bearings.
Yo-yo world champion Mr. Takahiko Hasegawa
Fidget Spinner:
Popular hit as a relaxation toy
● Fidget spinners are a simple toy that is spun while squeezing the central part with
2 fingers.
● Fidget spinners that spin for a long time are each made by hand and spin tested
before being shipped at NSK’s domestic plant.
This is surprising!
!
https://youtu.be/YJ3dGMbKBXA
By using special NSK bearings with exceptionally light torque (also used
in HDDs), spinning times, which are typically 3–4 minutes, were increased
to 12 minutes. When these fidget spinners were launched, they attracted much attention
in the media as a toy made by a bearing manufacturer.
Company
Introductions
These products were made in a collaborative effort
with companies that are unique and have strong
expertise in certain fields.
Soloham Co., Ltd. President & CEO Takahiko Hasegawa
Takahiko Hasegawa is a world yo-yo champion. He is a producer of
skill-based toys that have evolved from traditional toys such as yo-yos,
spintops and Kendama (cup and ball).
URL: http://spingear.jp/index.php?sl=en
!
68 NSK REPORT 2020
Structure
The ball bearings and roller bearings pictured to the right
represent 2 typical types of the most basic category of
bearings, known as rolling bearings. Rolling bearings are
made up of 4 elements̶an outer ring, an inner ring, a cage
as well as rolling elements̶and have an extremely simple
basic structure.
Outer ring
Cage
Inner ring
Rolling
elements
(balls)
Outer ring
Rolling
elements
(rollers)
Cage
Inner ring
Ball Bearing
Roller Bearing
Function
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
Premium Gyroscope:
Unwavering spin
● This scientific toy lets people experience the gyroscopic effect (rotated at high speeds,
an object is unlikely to waver), thanks to high-precision bearings and lathe technology.
● Usage of bearings on the inside of the disk reduce friction and increase the idle
running time.
!
https://www.youtube.com/watch?v=cm46vwOUfos&feature=youtu.be
This is surprising!
NSK’s high-precision bearings eliminate noise and enable long rotation times.
Rotation times are at least 4 minutes on a stand and more than 14 minutes for an
internal disk.
Chaos Maker: A move the likes of which will never be seen again, unpredictable movements
● The Chaos Maker is a double pendulum that has not one but 2 rotating
joints. It exhibits the physical phenomenon of “chaotic motion,” a move
the likes of which will never be seen again, making the next movement
unpredictable.
This is surprising!
!
https://youtu.be/t_9St49Bc2M
LED light traces drawn
by the Chaos Maker
This product can be used to demonstrate the physical phenomenon
of “chaotic motion.” Beautiful long-exposure photographs can be
taken with LED lights on the pendulum.
YEN SPIN
Developed this spintop in the hope of a brightening our surroundings in this difficult time.
Since ancient times, spintops have served as a good luck charm to make the world a brighter place.
Planning was done by telework.
Message
from
the Developer
We came up with this product idea in 2020 with the wish of
giving the world a wheel-of-fortune for better luck. Because of
these challenging times with people living in lockdown mode
around the world, we hope to continue making projects that
open up a brighter future for us all, gathering the collective
wisdom and strengths within the realm of possibility at each
company.
!
https://www.youtube.com/watch?v=dwxbAUsy96Y
Mitsumi Factory Limited Company
This company mainly produces precision processed metal for
automobile, medical equipment and semiconductor applications. Its
metal processing plant is located in Katsushika, Tokyo.
URL: https://mitsumi-seisakusyo.co.jp/ (Japanese only)
!
NSK Micro Precision Co, Ltd.
This company develops, manufactures and sells small bearings
for use in PCs, ships, fishing equipment and dental/medical
equipment.
URL: http://www.nskmicro.co.jp/english/index.html
!
NSK REPORT 2020
69
Data Section
Glossary
Term
Actuator
Aftermarket
Ball Screw
BCP
Big Data
Brake Boosters
CMS
Column-Type EPS
Conflict Minerals
CSR Procurement
Design Quality /
Manufacturing Quality
ECU
Environmentally Friendly Products
Meaning
Actuators refer to mechanical components that, for example, play a role in the actuation of brakes and gear shifting of
automobiles.
Aftermarket refers to maintenance and repair demand. In NSK, aftermarket mainly means the demand and business for
repair and replacement.
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.
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.
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 the 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 4 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.
Design quality refers to “targeted quality” and is the quality realized by building it in at the design stage to achieve
satisfying function and performance. Manufacturing quality is known as “performance quality.” It is the quality of
products that have actually been manufactured and is realized through management at the manufacturing stage.
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.
Environmentally friendly products are those products that, together with offering higher performance than conventional
products, contribute to a greater reduction of negative environmental impact. At NSK, we emphasize the following for
product manufacturing that contributes to the reduction of negative environmental impact:
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; and
4.Products should contribute to the health and safety of end users by having low vibration levels and low noise and dust
emissions.
EPS
(Electric Power Steering)
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 3 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.
The Global Account Manager (GAM) refers to NSK’s manager in charge of performing cross-regional coordination for
global automobile platform projects. KAM stands for Key Account Manager at NSK. KAMs coordinate with GAMs for
key customers in each region and build close relationships with customers as the contact person in individual regions.
By taking advantage of such close relationships with customers, KAMs have a role in regional sales activities and
responses in technological matters.
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.
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.
5G
Friction
GAM/KAM
Hub Unit Bearings
IoT
70 NSK REPORT 2020
Term
Meaning
LGBT (LGBT Allies)
Linear Guide
MaaS
Modern Slavery Act
Mother Plant
Needle Bearing
NIT
NPDS
Open Innovation
LGBT is an acronym for Lesbian, Gay, Bisexual and Transgender. In a broad sense, this refers to sexual minorities. LGBT
allies are those people who understand and support LGBT activities.
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.
MaaS, or Mobility as a Service, seamlessly brings together any number of modes of transportation, other than personal
vehicles, into a single service. This is a new way of thinking about how people can get around via a greater level of
efficiency and convenience.
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.
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.
NPDS stands for NSK Product Development System. NPDS, NSK’s proprietary quality management system, is
geared toward promptly and reliably responding to new projects and to the mass production of products that satisfy
customers. Being rolled out globally, at each stage of the process, from product planning to development and design,
prototype manufacturing and mass production, dedicated staff perform stringent checks to confirm that any concerns
are resolved and to build quality. Even after a product has entered mass production, we conduct thorough management
to stably maintain high quality.
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.
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 3 elements̶sun gear, planetary gear and ring
gear.
Post-Merger Integration
Post-merger integration (PMI) is an integration process in which we seek to maximize the synergistic effects following
an M&A.
Powertrain
PRTR Act
PSI Management
QC Circle
QCDDSM
Rack-Type EPS
Safety Contact
Smart Factory
STOP6 + 2 Initiative
VOC
XY Table
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.
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.
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.
QCDDSM stands for Quality, Cost, Delivery, Development, Service and Management. The QCDDSM elements are
generally focused on by the manufacturing industry including NSK.
Rack-type EPS (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.
Safety Contact is an activity in which workmates share their mindsets and feelings regarding safety. At NSK, we
practice Safety Contact at the top of our meetings and discussions, morning briefings and other communications.
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.
STOP6 is an initiative for occupational safety to prevent fatal and serious accidents. In the manufacturing industry,
STOP6 classifies accident causes and conducts key activities.
STOP1: Getting caught-in or ensnared
STOP3: Contact with vehicles
STOP5: Electric shock
In addition to the STOP6 initiative that addresses the causes of the above accidents, NSK also addresses “oxygen
deficiency and poisoning” and “prohibition of working alone” as 2 additional accident causes in its “STOP6 + 2” activities.
STOP2: Contact with heavy objects
STOP4: Falling and falling from a height
STOP6: Work with hot objects, accidents caused by explosions
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.
NSK REPORT 2020
71
Data Section
NSK Group
As of March 31, 2020
Region
Company name
Consolidated
equity
Outline of business
Japan
NSK STEERING SYSTEMS CO., LTD.
100.0%
Manufacture of automotive components
NSK MICRO PRECISION CO., LTD.
55.0%
Manufacture and sales of automotive bearings, etc.
NSK MICRO PRECISION CO., LTD. (NAGANO)
100.0%
Manufacture of automotive bearings, etc.
AMATSUJI STEEL BALL MFG. CO., LTD.
100.0%
Manufacture and sales of steel balls
AKS EAST JAPAN CO., LTD.
NSK KYUSHU CO., LTD.
ASAHI SEIKI CO., LTD.
SHINWA SEIKO CO., LTD.
NSK TOYAMA CO., LTD.
NSK MACHINERY CO., LTD.
100.0%
Manufacture of steel balls
100.0%
Manufacture of precision machinery & parts
73.8%
Manufacture of industrial machinery bearing parts, etc.
82.4%
Manufacture of automotive bearing parts, etc.
100.0%
Manufacture of industrial machinery bearing parts
100.0%
Manufacture of machine tools, etc.
KURIBAYASHI SEISAKUSHO CO., LTD.
73.5%
Manufacture and sales of automotive bearing parts
NSK REAL ESTATE CO., LTD.
NISSEI BLDG. MANAGEMENT LTD.
100.0%
Real estate management and rental, etc.
70.0%
Management of Nissei Building
NSK HUMAN RESOURCE SERVICES LTD.
100.0%
Consignment services for salary and welfare, education and recruitment
NSK LOGISTICS CO., LTD.
100.0%
Distribution service
NSK NETWORK AND SYSTEMS CO., LTD.
100.0%
Design and development for computer systems, etc.
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.
THE AMERICAS
U.S.A.
65.0%
Sales of electrical components and insurance agent, etc.
100.0%
Research and development of automotive components
50.0%
50.0%
40.0%
Manufacture and sales of automotive-related products
Manufacture of automotive-related products
Manufacture and sales of industrial machinery bearings
100.0%
Control of American subsidiaries and affiliates
100.0%
Manufacture and sales of automotive bearings, etc.
100.0%
Manufacture and sales of precision machinery & parts
100.0%
Sales of industrial machinery bearings, etc.
NSK STEERING SYSTEMS AMERICA, INC.
100.0%
Manufacture and sales of automotive components
NSK-AKS PRECISION BALL COMPANY
100.0%
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.
100.0%
Sales of industrial machinery bearings, etc.
NSK BEARINGS MANUFACTURING, MEXICO, S.A. DE C.V.
100.0%
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.
100.0%
Control of European subsidiaries and affiliates
100.0%
Manufacture of automotive bearings, etc.
100.0%
Manufacture of precision machinery & parts
100.0%
Sales of industrial machinery bearings, etc.
NSK STEERING SYSTEMS EUROPE LTD.
100.0%
Manufacture of automotive components
AKS PRECISION BALL EUROPE LTD.
100.0%
Manufacture and sales of steel balls
Germany
NSK EUROPA HOLDING GMBH
100.0%
Holding company of subsidiaries in Germany
NSK DEUTSCHLAND GMBH
NEUWEG FERTIGUNG GMBH
100.0%
Sales of industrial machinery bearings, etc.
100.0%
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.
72 NSK REPORT 2020
Region
Company name
Consolidated
equity
Outline of business
Netherlands
NSK EUROPEAN DISTRIBUTION CENTRE B.V.
100.0% Distribution service
Poland
NSK BEARINGS POLSKA S.A.
95.5%
Manufacture of automotive bearings, etc.
NSK POLSKA SP. Z O.O.
100.0%
Sales of industrial machinery bearings, etc.
NSK STEERING SYSTEMS EUROPE (POLSKA) SP. Z O.O.
100.0%
Manufacture of automotive components
NSK NEEDLE BEARING POLAND SP. Z O.O.
100.0%
Manufacture of automotive bearings
AKS PRECISION BALL POLSKA SP. Z O.O.
100.0%
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.
100.0%
Control of Chinese subsidiaries and affiliates, sales of bearings, etc.
KUNSHAN NSK CO., LTD.
85.0%
Manufacture of automotive bearings, etc.
NSK STEERING SYSTEMS DONGGUAN CO., LTD.
100.0%
Manufacture of automotive components
ZHANGJIAGANG NSK PRECISION MACHINERY CO., LTD.
100.0%
Manufacture of automotive bearing parts, etc.
CHANGSHU NSK NEEDLE BEARING CO., LTD.
100.0%
Manufacture of automotive bearings
AKS PRECISION BALL (HANGZHOU) CO., LTD.
100.0%
Manufacture and sales of steel balls
SUZHOU NSK BEARINGS CO., LTD.
100.0%
Manufacture of automotive bearings
NSK (CHINA) RESEARCH AND DEVELOPMENT CO., LTD.
100.0%
Research and development of automotive bearings, etc.
NSK HANGZHOU AUTOMOTIVE COMPONENTS CO., LTD.
100.0%
Manufacture of automotive components
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%
Manufacture of automotive components
100.0%
Manufacture of precision machinery & parts
100.0%
Manufacture of industrial machinery bearings
100.0%
Manufacture of automotive bearings, etc.
40.0%
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.
100.0%
Control of ASEAN and OCEANIA subsidiaries and affiliates
NSK INTERNATIONAL (SINGAPORE) PTE LTD.
100.0%
Sales of industrial machinery bearings, etc.
NSK SINGAPORE (PRIVATE) LTD.
100.0%
Sales of industrial machinery bearings, etc.
Indonesia
PT. NSK BEARINGS MANUFACTURING INDONESIA
100.0%
Manufacture of automotive bearings, etc.
PT. NSK INDONESIA
100.0%
Sales of industrial machinery bearings, etc.
PT. AKS PRECISION BALL INDONESIA
100.0%
Manufacture and sales of steel balls
Thailand
NSK BEARINGS MANUFACTURING (THAILAND) CO., LTD.
74.9%
Manufacture and sales of automotive bearings
SIAM NSK STEERING SYSTEMS CO., LTD.
74.9%
Manufacture and sales of automotive components
NSK ASIA PACIFIC TECHNOLOGY CENTRE (THAILAND) CO., LTD.
100.0%
Development of products, etc.
NSK BEARINGS (THAILAND) CO., LTD.
49.0%
Sales of industrial machinery bearings, etc.
Malaysia
NSK BEARINGS (MALAYSIA) SDN. BHD.
51.0%
Sales of industrial machinery bearings, etc.
NSK MICRO PRECISION (M) SDN. BHD.
100.0%
Manufacture of automotive bearings, etc.
ISC MICRO PRECISION SDN. BHD.
100.0%
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
100.0%
Manufacture and sales of automotive bearings, etc.
RANE NSK STEERING SYSTEMS PRIVATE LTD.
51.0%
Manufacture and sales of automotive components
South Korea
NSK KOREA CO., LTD.
100.0% Manufacture and sales of automotive bearings, etc.
NSK REPORT 2020
73
Data Section
Information for Investors / Company Data
As of March 31, 2020
Corporate Address
NSK Ltd.
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku, Tokyo 141-8560, Japan
Tel: +81-3-3779-7111
Contact Information
IR Offi ce, NSK Ltd.
Nissei Bldg., 1-6-3 Ohsaki, Shinagawa-ku,Tokyo 141-8560, Japan
Tel: +81-3-5487-2564
E-mail: ir@nsk.com
Breakdown of Shareholders (%)
(by shareholder type)
1.71.7
3.73.7
3.63.6
6.76.7
6.06.0
10.2
24.2
9.2
9.7
25.3
8.9
10.9
24.1
8.7
13.7
18.1
8.2
3.33.3
2.42.4
1.71.7
3.53.5
14.3
19.9
7.8
2.02.0
51.6
50.1
50.9
49.9
50.1
NSK’s Website
▶ https://www.nsk.com/
Common Stock
Authorized: 1,700,000,000 shares
Issued: 551,268,104 shares
(including 32,910,962 shares of treasury stock)
Number of Shareholders
47,268
Transfer Agent
Mizuho Trust & Banking Co., Ltd.
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan
Listing
Tokyo
Security Code
6471
2016
2017
2018
2019
2020
(As of March 31)
■ Financial Institutions ■ Securities Companies
■ Other Japanese Corporations ■ Foreign Investors
■ Individuals / Others ■ Treasury Stock
Other Information Concerning the Company
IR-Related Information
Please refer to the Company’s IR website for other IR information
including the latest news and detailed fi nancial data.
https://www.nsk.com/investors/
CSR-Related Information
Please refer to the Company’s CSR
website and Sustainability Report
for more details on CSR activities
and other related information.
https://www.nsk.com/sustainability/
Sustainability Report 2020
Highly Evaluated by Outside Agencies (SRI/ESG)
NSK Report 2019
Over and above their fi nancial 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 2020.
NSK issued “NSK Report 2019” last year. NSK was recognized with the
WICI Japan Award for the Best Integrated Reporting Grand Prize.
Following the receipt of a WICI Japan Award for the 3rd
consecutive year, NSK received the grand prize for the fi rst time.
Furthermore, as part of the 23rd Environmental Communication
Awards, NSK received an excellence award for environmental
communication for NSK Report 2019 from Japan’s Ministry of the
Environment and the Global Environmental Forum.
※1
※2
NSK REPORT 2019
Year ended March 31, 2019
Integrated Report
https://www.spglobal.com/
esg/csa/indices/djsi-index-
family
https://www.ftserussell.com/
products/indices/
ftse4good
https://www.ftserussell.com/
products/indices/
blossom-japan
https://www.issgovernance.com/
esg/ratings/corporate-rating/
https://www.sompo-am.com
NSK Report 2019
WICI Japan Award for the Best Integrated Reporting
Grand Prize: award certifi cate and cup
※1： FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confi rms that NSK has been independently assessed according to the FTSE4Good criteria, and has satisfi ed the requirements
to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong
Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.
※2： FTSE Russell (FTSE International Limited と Frank Russell Companyの登録商標)はここにNSKが第三者調査の結果、FTSE Blossom Japan Index組み入れの要件を満たし、本インデッ
クスの構成銘柄となったことを証します。FTSE Blossom Japan IndexはグローバルなインデックスプロバイダーであるFTSE Russellが作成し、環境、社会、ガバナンス（ESG）について優れた対
応を行っている日本企業のパフォーマンスを測定するために設計されたものです。FTSE Blossom Japan Indexはサステナブル投資のファンドや他の金融商品の作成・評価に広く利用されます。
(Japanese Only)
74 NSK REPORT 2020
Third-Party Assurances
To ensure the reliability and accuracy of NSK Report 2020 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
(cid:12255)Energy Use (P. 38)
(cid:12255) Greenhouse Gas
Emissions (P. 38)
(cid:12255) Water Withdrawal (P. 38)
(cid:12255) Total Waste (P. 38)
(cid:12255) VOC Emissions (P. 38)
(cid:12255) Lost-Worktime Injury
Frequency Rate (P. 39)
Independent Verification Report
Independent Assurance Statement
At the Time of Publishing the NSK Report 2020
On its 100th anniversary in 2016, NSK
published its fi rst integrated report,
“NSK Report,” making this fi scal
year the 5th edition. Over this period,
we have endeavored to disseminate
information about our aims to balance
our development as a corporation
with contributions to solving social
issues, through collaborative value
that satisfi es expectations from
society.
This year’s NSK Report has a
Special Feature titled “Collaborative
Value Creation and Beyond,”
introducing examples of our initiatives
at value co-creation. The report
also conveys global management at
NSK through interviews with senior
executives in China, Europe and the
Americas. In continuation from last
year, this year’s report features an
interview with outside directors about
the Company’s corporate governance.
NSK hopes that this latest edition
of the integrated report will deepen
the understanding of collaborative
value with its stakeholders.
This report was produced
primarily by the IR Offi ce, which
worked in cooperation with a broad
range of departments involved and
edited the opinions expressed. As the
executive offi cer 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.
The NSK Report is an important
tool for deepening dialogues with
all our stakeholders, including
shareholders and investors, and
we are making concerted efforts
to further enrich the content of this
report. 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 HQs,
Responsible for Investor Relations Offi ce
Akitoshi Ichii
NSK REPORT 2020
75
CAT. No. E8413 2020 AX-11 Printed in Japan ©NSK Ltd. 2020