A Message from the CEO

Akitoshi Ichii, President & CEO NSK Ltd.

NSK will strengthen its revenue base by reshaping its business portfolio, aiming to be a company that society continues to rely on for the next 100 years, and even the next 1,000 years

The outlook of the global economy is growing increasingly uncertain due to the impact of the economic slowdown in China, the prolonged situation between Russia and Ukraine, continued and mounting inflation, and tightening monetary policy in the Americas and Europe. With these environmental changes, NSK has had to address new challenges that it did not foresee when establishing its Mid-Term Management Plan (MTP2026), such as the need to reverify our supply chain and revise our pricing policy to account for increased materials, energy, and labor costs. As we tackle these challenges, we aim to increase profitability and establish a stronger operational foundation by reshaping our portfolio from a mid- to long-term perspective in terms of our business ventures, customers, and products.

In the automotive business, the electrification of vehicles is accelerating toward the establishment of a carbon neutral society. NSK has already received high reviews from the market for its products that contribute to the improved reliability and efficiency of electric vehicles such as high-speed electrical erosion-resistant bearings for eAxles, low-torque wheel bearings (hub bearings), and ball screw units for electric-hydraulic brake systems. The shift to electrification presents a significant business opportunity for NSK to increase its market share and improve profitability by differentiating its new products and new technologies from those of its competitors.

In the industrial machinery business, the evolution of robotics and innovations in manufacturing technologies demand a higher level of reliability and efficiency from NSK’s products. NSK will respond to the increasing sophistication of processing technologies in the growing markets of robotics and semiconductor manufacturing equipment as well as the machine tool industry by proposing technology solutions through its precision bearings and precision machinery products that stay one step ahead of the competition. By leveraging these areas of expertise, NSK will achieve a level of growth that surpasses market growth.

In MTP2026, NSK aims to enhance profitability by reshaping its business portfolio. The one trillion yen in sales that NSK achieved in FY2017 was comprised of 70% automotive business sales and 30% industrial machinery business sales. However, in MTP2026, we will improve our profit structure by reshaping our business portfolio to increase the proportion of industrial machinery business sales.

We aim to improve our ROE by enhancing capital efficiency along with profitability. As our capital strategy, we will maintain a stable dividend payout ratio of 30-50%, with a total return ratio of approximately 50%. We will also invest in growth through the effective utilization of capital, balancing mid-term growth and capital returns with flexible share buybacks. Additionally, NSK will effectively use funds for the enhancement of managerial resources such as technology, production, and human resources through digital technology, as well as for capital expenditure and M&A to develop new businesses with new products and services that go beyond bearings.

NSK will continue to move forward and step up to the challenge of achieving its high-aiming, future-oriented goals, and continue to be a company that is needed, trusted, and relied upon by society for the next 100 years, and even the next 1,000 years. We would like to thank you for your continued understanding and support.