fy2017 forecast and progress of the 5th mid-term plan · rebuild competitiveness sustainable growth...

March 2018NSK Ltd.

Cautionary Statements with Respect to Forward-Looking StatementsStatements made in this report with respect to plans, strategies and future performance that are not historical fact are

forward-looking statements. NSK cautions that a number of factors could cause actual results to differ materially from

those discussed in the forward-looking statements.

Note : This document is an English translation of material written initially in Japanese.

The Japanese original should be considered the primary version

FY2017 Forecast

and progress of

the 5th Mid-Term Plan

Copyright NSK Ltd. All Rights Reserved.

Contents

1. Consolidated Business Resultsfor FY2017 Q3 (Ended December 31, 2017)

2. Progress of the 5th Mid-Term Management Plan

(Supplementary Information)

1

Copyright NSK Ltd. All Rights Reserved. 2

1. Consolidated Business Results

for FY2017 Q3 (Ended December 31, 2017)


Business Results for FY2017: Q3

Current demand environment and FY2017 Forecast

3

✓Consolidated Business Results for FY2017: Q3

Q3 (Oct. – Dec.) (vs. FY2016:Q3)Q3 YTD

(Apr. – Dec.)

(vs. FY2016:Q3 YTD)

Net Sales : ¥ 264.3 billion(+¥ 22.3 billion

/ +9.2%) ¥ 757.7 billion(+¥ 60.0 billion

/ +8.6%)

Operating Income : ¥ 27.9 billion(+¥ 10.3 billion

/ +58.0%) ¥ 70.7 billion(+¥ 25.7 billion

/ +57.0%)

(O.I%) (10.6%) (+3.3p) (9.3%) (+2.9p)

Net Income Attributable to Owners of the Parent : ¥ 19.7 billion

(+¥ 9.3 billion / +89.2%) ¥ 48.1 billion

(+¥ 17.8 billion / +58.8%)

Segment Income＊ : ¥ 28.3 billion(+¥ 5.6 billion

/ +24.9%) ¥ 72.5 billion(+¥ 14.9 billion

/ +25.8%)

＊Segment Income : Operating income before deduction of other operating expenses

✓ Industrial machinery business： Strong demand. Business environment remains robust.

✓ Automotive business： Moderate growth on a global basis. Driven by AT-related

business.

✓ FY2017 forecast： No change from the revised forecast as of November. Need to

watch foreign exchange movements.

✓ YOY: Substantial increase in both sales and profit. Recovered double-digit

quarterly O.I%.

✓ Record quarterly sales and net income.

Summary of Consolidated Business Results for FY 2017 Q3


FY2016 FY2017

(Billions of yen)

Q3<Actual>

Apr-Dec

<Actual>Full year<Actual>

Q3<Actual>

Increase/

Decrease

YOY

Difference

YOY

Apr-Dec

<Actual>

Increase/

Decrease

YOY

Difference

YOYFull year

<Nov. Fcst>

Net sales 242.1 697.7 949.2 264. 3 +22.3 +9.2% 757.7 +60.0 +8.6% 1,000.0

Operating income 17.7 45.0 65.3 27.9 +10.3 +58.0% 70.7 +25.7 +57.0% 92.0

<%> <7.3%> <6.5%> <6.9%> <10.6%> <9.3%> <9.2%>

Income before income taxes

17.5 44.0 63.6 28.0 +10.5 +59.9% 70.4 +26.4 +60.0% 91.0

Net income attributable to owners of the parent 10.4 30.3 45.6 19.7 +9.3 +89.2% 48.1 +17.8 +58.8% 62.0

(Ex. rate:1USD=)

( 〃 1EUR=)

( 〃 1CNY=)

109.34

117.83

15.98

106.68

118.09

15.96

108.42

118.84

16.11

112.99

133.01

17.08

+3.65

+15.18

+1.10

+3.3%

+12.9%

+6.9%

111.71

128.53

16.64

+5.03

+10.44

+0.68

+4.7%

+8.8%

+4.3%

110.54

125.65

16.41

*Reference：

Segment income 22.7 57.6 83.8 28.3 +5.6 +24.9% 72.5 +14.9 +25.8%

<%> <9.4%> <8.3%> <8.8%> <10.7%> <9.6%>

Summary of Consolidated Business Results for FY2017 Q3

Segment Income : Operating income before deduction of other operating expenses Other operating expenses : Antimonopoly Act -related losses, foreign exchange losses

4


FY2016 FY2017

(Billions of yen)

Q3<Actual>

Apr-Dec


Q3<Actual>

Increase/

Decrease

YOY

Difference

YOY

Apr-Dec

<Actual>

Increase/

Decrease

YOY

Difference

YOY

Full year<Nov.

Fcst>

Total Net sales 242.1 697.7 949.2 264.3 +22.3 +9.2% 757.7 +60.0 +8.6% 1,000.0


<%> 7.3% 6.5% 6.9% 10.6% 9.3% 9.2%

IndustrialMachineryBusiness

Net sales 57.5 165.4 226.9 68.5 +11.0 +19.2% 195.5 +30.1 +18.2% 259.0Industrial Machinery Bearings

46.8 134.8 184.3 53.6 +6.8 +14.5% 153.7 +18.8 +14.0% 204.0

Precision Machinery and Parts

10.7 30.6 42.7 14.9 +4.2 +39.3% 41.8 +11.2 +36.8% 55.0


<%> 8.1% 6.0% 6.5% 11.8% 9.4% 9.8%

AutomotiveBusiness

Net sales 178.1 513.5 696.3 187.8 +9.7 +5.5% 540.0 +26.5 +5.2% 713.0Automotive Bearings

83.6 241.4 328.0 91.5 +7.8 +9.4% 262.0 +20.6 +8.6% 350.0

Automotive Components

94.4 272.1 368.3 96.3 +1.9 +2.0% 277.9 +5.8 +2.1% 363.0


<%> 9.5% 8.7% 9.3% 9.9% 9.2% 9.0%

Others Net sales 14.0 37.9 52.9 15.2 +1.2 +8.3% 41.9 +4.0 +10.6% 56.0


<%> 8.1% 7.0% 8.4% 10.1% 9.8% 9.5%

Eliminations (sales) -7.5 -19.1 -26.9 -7.2 +0.3 -19.6 -0.6 -28.0

Other operating expenses/ Adjustments -4.9 -12.5 -18.3 -0.3 +4.7 -1.6 +10.9 -2.8

Sales & Operating Income Results by Business Segment


44.4 43.6 46.8 49.4 49.3 50.7 53.6

9.8 10.0 10.7

12.1 13.2 13.6 14.9 54.3 53.6

57.561.5 62.6 64.3

68.5

3.7

1.6

4.6 4.7 5.5

4.7

8.1

Q1 Q2 Q3 Q4 Q1 Q2 Q3

Ind BRG Precision O.I

FY17FY16

6.8%

2.9%

8.1%7.7%

8.8%7.3%

11.8%

O.I (%)

6

1USD= 108.25 102.45 109.34 113.64 111.10 111.04 112.99

1EUR= 122.17 114.27 117.83 121.09 122.19 130.39 133.01

1CNY= 16.54 15.36 15.98 16.56 16.21 16.63 17.08

Business Results: Industrial Machinery Business

✓ Recovered double-digit O.I ratio on a quarterly basis.

✓ Robust demand continued in major sectors such as machine tools,

semiconductors, construction machinery and fluid machinery.

✓ Precision: Quarterly record for both sales and profit.


81.0 76.8 83.6 86.6 84.2 86.3 91.5

90.1 87.5 94.4 96.2 89.9 91.6

96.3

171.2 164.3

178.1 182.8 174.2 178.0

187.8

15.9 12.2 16.8 19.7

17.2 14.1

18.6

Q1 Q2 Q3 Q4 Q1 Q2 Q3

Auto BRG Auto Comp O.I

FY16 FY17

9.3%7.4%

9.5%10.8%

9.9% 7.9% 9.9%

O.I (%)

7

1USD= 108.25 102.45 109.34 113.64 111.10 111.04 112.99

1EUR= 122.17 114.27 117.83 121.09 122.19 130.39 133.01

1CNY= 16.54 15.36 15.98 16.56 16.21 16.63 17.08

Business Results: Automotive Business

✓ Q3 sales: YOY +5%. Achieved new record for quarterly sales.

✓ Japan Q3: YOY +9%, strong growth driven by AT-related products.

✓ US, China: negative impact of certain vehicle model changes.


2. Progress of the 5th Mid-Term Management Plan


The 5th MTP Concept

9

Embark on new chapter in evolution towards next 100 years

Business Foundation as 1 trillion Yen Company

NSK Vision 2026 Setting the Future in Motion

Industrial Machinery ・ Automotive

Sustainable GrowthDeliver new value to society

Work together with stakeholders

Reconstruct profit base

Increase and stabilize profitabilityMonozukuri, quality, personnel

Expand into new growth fields

Growth in core businessesNew products, new fields

Operational Excellence

Innovate and Challenge

Safety ・ Quality ・ Compliance


Industrial Machinery Business: 1Changes in Business Environment

10

Fierce competition

in sluggish growth

environment

Entry of

Chinese

manufacturers

Changes to current business environment

Growth fields

Mid-term focus fields

Respond to smart

technology, new

added-value fields

Evolving mid-term needs

（Environment,

Infrastructure, IT)

Wind Turbine High Reliability

Machine Tool LCC Saving

Medical & Robot Sensing & Control

Building & Railway Safety

Smart Factory IoT

Construction Machine, Railway CMS

Environ-ment

Infrast-ructure

ITElectrification

*LCC: Life Cycle Cost


Industrial Machinery Business: 2Key Initiatives

11

Respond to changes

in business

environment

Create new added

value and demand

Initiatives for focus

sectors

Operational Excellence

・ Reinforce response capabilities and

profitability

・ Enhance product capability

Innovate and Challenge

Key Initiatives in Industrial Machinery Business

Respond to changes in business environment and expand target fields

Rebuild competitiveness Sustainable growth Solution provider

1) Respond to fierce competition

-F2 (Fujisawa) project

-Introduce new manufacturing methods

-Reassess product capability

-Shorten lead time

2) Improve cost competitiveness

1) Expand presence through solution-provision capability

-GAM

-Infrastructure (wind turbines, railcars)

-Capital goods (machine tools)

-Robots, medical

2) Channel management

2) Harness synergy effect between bearing and linear-motion technologies

3) Make advance in maintenance business

1) Develop CMS technology and establish business model

・ Concentrate resources on focus sectors

・ Generate new added value and demand

11


1

MTP Key Initiatives

2

桐原工場写真

・Machine tools →

・Industrial motors/servomotors

・Semi-conductors →

Focus sectors Major products

・Wind Turbines →

・Railcars →

・Robots →

→

12

Respond to changes in business environment Expand target fields

・FY2017/2H OI: recover to double-digit range.・Expand presence over mid- to long-term and

strive for prompt realization of 15% OI level.

Respond to changes in business environment and expand target fields

Reinforce supply capability

Increase capacity to respond to demand surge

Reorganize production site

F2 project : Production commenced

Shenyang plant : Expansion of capacity

Innovation in production methods

Enhance brand power

Proactive response to

increasing customer

quality requirements

Improve profitability

Sales price revision

Cost reduction

Maximize sales and improve profitabilityunder demand recovery environment

Precision brgs/BS

Ball brgs for high-accuracy motors

Expand sales in focus sectors by leveragingpresence and engineering capability

Extra-large brgs

Precision machinery and parts

Axle brgs (Tapered andCylindrical roller)

Thin-section brgs

Industrial Machinery Business: 3The 5th MTP: Status of Key Initiatives


２-2

0

100

200Demand Sales

Machine tools２-1 ２-2 Railcars２-3２-2 Wind Turbines２-2

２-2Robots２-4

FY16 FY18 FY21 FY16 FY18 FY21

２-2Industrial motors/servomotors２-5

0

100

200

Demand Sales

0

100

200Demand Sales

FY16 FY18 FY21

0

100

200 Demand Sales

FY16 FY18 FY21 0

100

200Demand Sales

FY16 FY18 FY21

Semiconductors２-6

0

100

200Demand Sales

FY16 FY18 FY21

Industrial Machinery Business: 4The 5th MTP: Status of Key Initiatives

13

Market Environment・ Increase in vehicle production volume,

technological innovations・ Demand increase in NC machine tools

due to rising labor costs in China.・ Sophistication of machinery due to IoT/CMSMeasures・ Reinforce supply capability.

Improve response to demand fluctuations.

Market Environment・ Steady demand expansion due to clean

energy policies around the world.・ Trend to off-shore and large sized turbines・ Full-scale demand in MRO businessMeasures・ Increase production at Shenyang plant.

Strive for increase in sales by reducing costand lead-time through production at regionsof end demand.

Market Environment・ Expansion in infrastructure investment

due to Chinese government policies.・ Achieve entry into EU market.Measures・ Expand business with CRRC by leveraging

engineering capability. Work to strengthen presence in EU gearbox market

Market Environment・ Demand expansion in response to FA

due to decline in work force.・ Expansion due to rise of labor costs in

China, need for stable high quality.Measures・ Introduce new products meeting enhanced-

performance requirements.

Market Environment・ Increasing demand for robot and machine

tool. ・ Higher requirements for efficiency and

performance due to energy-efficiency regulations around the world.

Measures・ Differentiate through high performance

seals and low dust emission grease.

Further strengthen Global No.1 brand Reinforce competitiveness by promotingproduction at regions of end demand

Expand business in China, enhance presence in Europe

Develop new products for robots /gearboxes in response to growing market size

Leverage technical capabilities to respond to high-speed/accuracy/efficiency needs

Respond to requirements for High speed/reliability

Market Environment・ Investment in 3D-NAND and DRAM due to

expansion of application scope, includingsmartphones, memory for data centers andin-vehicle motors.

Measures・ Utilize technical capabilities to expand sales

to Japanese and US manufacturers・ Work to achieve entry into Chinese market.


0

20

40

60

80

100

120

140

2015 2016 2017 2018 2019 2020 2021 2026 2027 2028

Automotive Business: 1Changes in Automotive Business Environment

ＩＴ14

Autonomous

driving

Improved

vehicle

safety

Electrifi

-cation

Improved

efficiency

Power

-train

Future diversification in power source, evolution in vehicle dynamics control

Rapid Changes for Automotive Vehicle Innovation

Environ

-mentSafety

Fields requiring further

technological innovation

Vehicle

Dynamics

Diversification in power source

Level 1 Driver Assistance

Cars can handle one task at a time

Level 2 Partial AutomationCars would have at least two automated functions.

Level 3 Conditional Automation

Driving is fully controlled by software.

In emergency, driver resume control.

Level 4 High Automation

Officially driverless in certain environments.

Level 5 Full Automation

Operate entirely without any driver presence.

Autonomous Driving

(Source: IHS Automotive, As of Feb. 2017)

EV・FCV

Strong HEV

ICE

Mild HEV


Automotive Business: 2EV Impact and Opportunities

Technology Required :Down SizingLower WeightHigh EfficiencyLower FrictionAnti Electrolytic Corrosion

NSK’s Engineering Expertise is Advantage for New Opportunities

NSK’s OpportunityBearings requiring advanced technology Electric Power SteeringElectric Brake BoosterNew Products EV Drive Units

Transmission equipped Wheel Hub MotorWireless Power Transfer System

Challenges for EV：Longer Cruising RangeBattery Cost ReductionShorten Recharge Time Infrastructure of Recharge Station Capacity of Electricity SupplyDecrease in Employment due to EV Shift

15


Maximize sales opportunity

EPS products

Actuator products

Ball screw for electric brakes

18 19 20 21 22 23

Existing Project A B C

4.54.0

0.9

(FY)

0.2

Volume trend for gained order(M unit)

100 123

0

50

100

150

Automotive Business: 3The 5th MTP: Status of Key Initiatives

MTP Key Initiatives

<Sales (index, forecast)>

FY15Act

FY16Act

FY17Fcst

FY18Fcst

Powertrain Business 1 Steering and Actuator Business 2

Mid- to long-term growth through core businesses and technology development toward a new automotive era

Expansion of powertrain products to continue(AT, electrical components).

Maximize sales opportunities by leveraging technical and solution-proposal capabilities.

Establish foundation of renewed growth bydeveloping next-generation products and

expanding customer base.Expand electric brake business.

Advanced requirements for bearing performance:small, lightweight, high-efficiency, low-torque Expand sales through low-torque HUB for

mass-produced EV

(Unique grease and seal technologies)

New applications

In-vehicle motors

Expansion of customer portfolio

Increase sales to major Tier 1 manufacturers

Column-type EPS: Improve cost competitivenessContinue initiatives to expand customerbase (Chinese, European and US customers)

Rack-type EPS: Under evaluation in demonstrationcars. Working to expand target vehicles.

Pinion-type EPS: Expand EPS product lineup Next-generation steering system: Steer-by-wire

・Gained orders from several customers in addition to existing Japanese EVs

・4.5M units of new businessconfirmed

・Strive for 30M units inlatter half of 2020s

16


EV

Year1990 2000 2010 2020 2030 2040

Radical innovation

Incremental innovation

CASE

Increase in AT ratio

Evolution in AT, engine

Automatic brake

Autonomous driving

Future automotive technology3

1. Variolink suspension

Technology changes

２-2Flex corner module concept3-1

２-2Wireless power

transfer3-3

2. Wheel hub motor Fit

２-2Traction² drive (Traction reducer)3-2

BS Actuator

Steer-by-wire

Column-type EPS

Rack-type EPS

Variolink suspension

Wireless power transfer

Wheel hub motor

Traction drive

HUB unit

Multistepping AT

Electrification

New in-vehicle application

17

Automotive Business: 4The 5th MTP: Status of Key Initiatives

Contributing to dramatic technological innovations in automotive industry

Wireless power transfer from a coil array on the

ground to an in-wheel motor

・5 independently moving actuators

・Enables toe/camber/steering angle,

axle track, and wheel base to be

controlled at will.

・EV drive unit which incorporates tractiondrive speed reducer

・Conveys power through unique oil,without using gears

・Achieved downsizing, lower weight andlower noise by incorporating high-speedmotor and traction drive speed reducer

・Driving system within the wheel・Second-generation thin type miniaturized motor installed directly in the wheel.

Combination of driving and steering technology


Ind Brg204.020% Precision

55.06%

Auto Brg350.035%

Auto Comp363.036%

Others28.03%


FY2017 Sales Breakdown Forecast by Business Segment

Automotive Segment

713.0 71%

Industrial Segment

259.0 26%

FY2017 Fcst

Total 1,000.0

Others

Steel Ball

(Billions of yen)

19



Consolidated Business Trend

522.8 522.2 581.0

628.5

717.2 772.0

647.6 587.6

710.4 733.2 732.8

871.7

974.9 975.3 949.2

1,000.0 Fcst

1,000.0 MTP

17.8

26.0

38.3 42.6

62.4 69.3

22.1

11.3

43.5 44.4

32.4

68.0

97.3

65.3

92.0 Fcst

100.0 MTP

0

20

40

60

80

100

120

0

200

400

600

800

1,000

20

(Billions

of yen)

$ 125 116 108 110 117 115 101 93 86 79 83 100 110 120 108 111 105

EURO 118 131 134 137 150 162 145 131 113 109 107 134 139 133 119 126 120

ROE

Operating Income %

Operating Income (Right)Net Sales (Left)

The 5th Mid-term Plan

94.7

FY07 FY08FY05 FY06FY03 FY04FY02 FY09 FY10 FY11 FY12 FY13 FY14 FY15

・Select & Focus Strategies・Assembly of Streamlined Competitive Business Units

・Growth Strategies

・Improve Profitability

・Respond to Paradigm Shifts

・Reorganize Business Structure

(Billions of yen)

Developing CorporateFundamentals to Support a1

1 trillion Yen Company

Embark on new chapter in evolution towards next

100 years

FY16 FY17Forecast

FY18PlanIFRSJP GAAP

-1.4%

8.0%

11.9% 12.1%14.0%

16.1%

1.8%

2.0%

10.3% 10.6%

5.2%

9.2%

15.3% 14.9%

9.9%

3.4%

5.0%6.6% 6.8%

8.7% 9.0%

3.4%

1.9%

6.1% 6.1%4.4%

7.8%10.0% 9.7%

6.9%9.2% 10.0%

1st MTP 2nd MTP 3rd MTP 4th MTP 5th MTP



Sales Trend by Customer Location

388.9 323.4 289.5

354.5 363.8 333.3 329.1 328.8 318.4 330.5 367.0

107.3

78.870.6

85.5 86.3103.4 134.5 164.8 183.7 165.2

152.0

133.9

111.998.5

102.2 107.9 102.7124.6

133.8 131.8 121.9131.5

141.9

133.6

128.9

168.2 175.2 193.4

283.5

347.5 341.4 331.6349.5772.0

647.6

587.6

710.4733.2 732.8

871.7

974.9 975.3949.2

1,000.049.6% 50.1% 50.7% 50.1% 50.4%54.5%

62.2%66.3% 67.4% 65.2% 63.3%

0

200

400

600

800

1,000

08/3期 09/3期 10/3期 11/3期 12/3期 13/3期 14/3期 15/3期 16/3期 17/3期 18/3期

Japan The Americas Europe Asia Non-Japan ratio

FY2010 FY2011FY2008 FY2009FY2007FY2013FY2012 FY2014 FY2015

(Billions of Yen)

FY2017 FcstFY2016

Japan

37%

15% The

Americas

Asia

35%

Europe

13%

Japan

50%

The Americas

14%

Asia

18%

Europe

17%

Japan

45%

The Americas

14%

Asia

26%

Europe

14%

21


77.3 79.9 85.2 88.1 87.7 91.6 97.8

43.9 38.9 39.4 43.0 38.8 36.9 37.7 32.7 26.8 28.5 33.9 32.3 31.7 34.2 46.9 47.7 55.8 50.7 50.7 53.4

58.6 31.0 30.5

33.2 35.7 34.3 36.0 36.1 231.8 223.8

242.1 251.5 243.8 249.5 264.3

0

50

100

150

200

250

300 Japan The Americas Europe China Other Asia

Q3 Q4Q2FY16 Q1 FY17 Q1 Q2 Q31USD= 108.25 102.45 109.34 113.64 111.10 111.04 112.99

1EUR= 122.17 114.27 117.83 121.09 122.19 130.39 133.01

1CNY= 16.54 15.36 15.98 16.56 16.21 16.63 17.08

（Billions of yen）

FY2016 FY2017

(Billions of yen)

Q3<Actual>

Apr-Dec


Q3<Actual>

Increase/

Decrease

YOY

Difference

YOY

Apr-Dec

<Actual>

Increase/

Decrease

YOY

Difference

YOY

Net sales 242.1 697.7 949.2 264.3 +22.3 +9.2% 757.7 +60.0 +8.6%

Japan 85.2 242.4 330.5 97.8 +12.6 +14.8% 277.1 +34.7 +14.3%

Non-Japan 156.9 455.3 618.7 166.5 +9.6 +6.1% 480.6 +25.3 +5.6%

<Non-Japan ratio> <64.8%> <65.3%> <65.2%> <63.0%> <63.4%>

The Americas 39.4 122.2 165.2 37.7 -1.7 -4.4% 113.4 -8.7 -7.2%

Europe 28.5 88.0 121.9 34.2 +5.7 +19.8% 98.1 +10.1 +11.5%

China 55.8 150.5 201.2 58.6 +2.8 +5.0% 162.6 +12.1 +8.1%

Other Asia 33.2 94.7 130.4 36.1 +2.9 +8.8% 106.4 +11.8 +12.4%


Sales Results by Customer Location

22


537.7 561.7 586.7

506.3 524.7 522.4

1,044.0 1,086.4 1,109.1

Non-Current assetsCurrent assets

485.0 529.1 554.9

240.3 236.2 236.5

318.6 321.1 317.7

1,044.0 1,086.4 1,109.1

Current liabilities Non- Current liabilities Total equityRatio of net worth to total capital

44.2%46.6%

47.8%

Assets Liabilities / Total equity

+65.1

+16.1

+49.1

+65.1

-0.9

+69.9

-3.8

23


Ex. Rate FY16 End of Q4 FY17 End of Q2 FY17 End of Q3

1USD= 112.20 112.74 113.05

1EUR= 119.78 132.81 134.95

1CNY= 16.29 16.96 17.30


Consolidated Balance Sheet

FY16 FY17 FY17

End of Q4 End of Q2 End of Q3

Change

from Q4


Change

from Q4

FY16 FY17 FY17

End of Q4 End of Q2 End of Q3


FY2016 FY2017

（Billions of yen） Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3Full year<Feb. Fcst>

Capital

expenditure8.0 11.5 13.6 25.4 58.6 8.9 15.3 18.1 68.0

Depreciation and

amortization10.6 10.3 10.8 11.6 43.4 11.4 11.6 11.9 45.0

R&D expenses （on Statutory basis）

2.8 3.2 3.2 4.6 13.9 3.8 4.4 4.5 17.0

(Supplementary Information) Capital expenditure,

Depreciation and amortisation, R&D expenses



Finance Strategy / Policy on Shareholder Returns

ROE: 10% or more

Investment for future growth

:180 billion/ 3 years

Credit rating: maintain

level A

Net D/E ratio: around 0.3

Shareholder

returns

Growth with

profitability

Stabilize financial

base

-Dividend payout ratio of

approximately 30%

-Acquisition of treasury stock

Balance investment in future growth with shareholder

returns under a stable financial structure

25


9.0 10.0 4.0 5.0 6.0 6.0 7.0

12.0 17.0 14.0

19.0 10.0 4.0

4.0 6.0 6.0 5.0 9.0

16.0

17.0 14.0

19.0 10.0

19.0 14.0

8.0 11.0 12.0 11.0

16.0

28.0

34.0 38.0

38.0

24.1%

165.9%

90.7%

22.8% 22.7% 37.7%27.7% 24.4% 28.0%

44.1%32.4%

-100%

-50%

0%

50%

100%

150%

200%

0

10

20

30

40

50

60

70

80

90

100

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017（Fct）

■ Dividend Policy●Our basic dividend policy is to provide dividends to our shareholders on an ongoing basis.

●Specifically, we aim to pay a per-share dividend, maintaining a dividend payout ratio of

approximately 30% on a consolidated basis, while taking into account financial situation.

■ Dividend Transition

yen


Dividend

■ Acquisition of treasury stock ¥15.0 billion (FY2016)26

fy2017 forecast and progress of the 5th mid-term plan · rebuild competitiveness sustainable growth...

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