Reviewing the First Year of Our Mid-term Business Plan

 With the general recovery of the economy, we are now certain of being able to meet our sales and profit targets for the first year of our Mid-term Plan. We estimate sales to exceed 520 billion yen, with operating income of 24 billion yen.
 Our biggest achievement for the past year was undoubtedly the return to profitability of our European business. After six years of bleeding losses, our business restructuring activities, such as the reorganization of production sites, reduction of head count, and withdrawal from unprofitable businesses, have at last begun to bear fruit.
 The benefits obtained through these restructuring activities are as shown above.
 We have been able to achieve our initial target for the benefits to be obtained from restructuring of our domestic employment system and European business. We also expect to meet our procurement cost reductions target for the first year. We are expecting price increases from our steel suppliers and therefore achieving our cost reduction targets for the next two years will become more challenging. However, we will strive to meet the remaining targets by reinforcing global procurement activities and performing further procurement cost reductions of auxiliary supplies.
 The benefits obtained from the restructuring of our precision machinery business were a little disappointing. We had initially planned to return the business to profitability in the first half of fiscal 2003, but this was delayed by six months. We are seeing a strong recovery in demand, and together with our profitability improvement activities, we expect profits to improve dramatically in the next fiscal year.
 We have also started to see results from our production efficiency improvement activities (i.e. APS activities) which we implemented throughout the NSK group. We expect greater benefits from these activities which consist of establishing a strategically integrated business flow beginning from production, sales, through to delivery.
 The business environment recovered in fiscal 2003. We will of course take advantage of this trend which we expect to continue into fiscal 2004, but will be careful not become too dependent on external economic conditions. We will pursue any chance to transform our customers’ needs into new business opportunities.