Approaching the Final Year of Our Mid-term Business Plan
(FY 2003 ~ FY 2005)

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Reviewing the First Two Years of our Mid-term Business Plan

Achievements Implementation of “Select and Focus” strategy ·Obtain 100% ownership of NSK Needle Bearings ·Withdrawal from the seat belt business, etc. Reorganization of our European business (Achieved targeted benefit of ¥ 3 billion) Reorganization of the domestic employment system (Achieved targeted benefit of ¥ 3 billion) Improved the profitability of the Industrial Machinery Bearings business Returned the Precision Machinery business to profitability Improved financial position (Balance sheet reform) ·Reduced ¥58 billion worth of interest-bearing debts over 2 years Introduced a new customer-oriented business organization Reinforced the corporate governance structure ·Adopted of the “Company with Committees System” Unfinished Tasks Delayed response to changes in demand ·Implementation of capital expenditures behind schedule due to delays in installment of production machinery ·Decline in productivity due to unstable supply of steel => Subsequent increase in labor costs Did not achieve profit targets of the Automotive Products business Profitability improvement activities of the Precision Machinery business fell behind schedule due to the sudden sharp increase in demand Increase in start-up expenses of production facilities in China (Major factor for reduced profitability in the Asian businesses) Expected to achieve mid-term sales and profit targets for FY ‘04 Both sales and profits to reach record figures