NSK : Financial Results for Q1 FY2021 (Consolidated)

NSK Ltd.

For Immediate Release

July 30, 2021

CONSOLIDATED RESULTS FOR THE THREE MONTHS ENDED

JUNE 30, 2021 (Unaudited)

[IFRS]

Company name

NSK Ltd.

Stock exchange on which the shares are listed

Tokyo Stock Exchange in Japan

Code number

6471

URL

https://www.nsk.com/

Representative

Akitoshi Ichii, President and CEO

Contact person

Keita Suzuki, Senior Vice President

Filing date of quarterly securities report

August 6, 2021

Figures are rounded down to the nearest million yen

1. Consolidated financial highlights for the three months ended June 30, 2021

(1) Consolidated financial results

% indicates changes from the previous year

Operating

Net income

Total

Income before

Net income

attributable to

Sales

comprehensive

income

income taxes

owners of the

income

parent

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

Three months ended

213,458

65.6

9,177

9,478

5,395

4,833

19,146

Jun. 30, 2021

Three months ended

128,870

-42.2

-12,903

-12,527

-9,910

-9,699

-2,838

Jun. 30, 2020

Basic earnings

Diluted earnings

per share

per share

Yen

Yen

Three months ended

9.43

9.40

Jun. 30, 2021

Three months ended

-18.94

-18.94

Jun. 30, 2020

(2) Consolidated financial position

Total assets

Total equity

Total equity attributable

Ratio of equity

attributable to owners of

to owners of the parent

the parent to total assets

Millions of Yen

Millions of Yen

Millions of Yen

As of Jun. 30, 2021

1,172,294

587,661

569,165

48.6

As of Mar. 31, 2021

1,167,498

573,428

554,375

47.5

2. Cash dividends
				Cash dividends per share
	(Record date)	End of the		End of the	End of the		Year-end	Full-year
	1st quarter		2nd quarter	3rd quarter		total
		Yen		Yen	Yen		Yen	Yen
Year ended Mar. 31, 2021			10.00			10.00	20.00
Year ending Mar. 31, 2022
Year ending Mar. 31, 2022			10.00			15.00	25.00
	(Forecast)
Note	Revision to the forecast of cash dividends from the latest announcement: None

3. Forecast of consolidated results for the year ending March 31, 2022

• indicates changes from same period of previous year Net income

	Sales		Operating income		Income before	attributable to		Basic earnings
			income taxes	owners of the		per share
							parent
Six months ending Sep.	Millions of Yen		Millions of Yen		Millions of Yen		Millions of Yen		Yen
425,000	34.5	18,000		18,000		13,000		25.36
30, 2021
Year ending Mar. 31, 2022	860,000	15.0	53,000 732.7		52,500	791.5	38,000		74.14
Note Revision to the forecast of consolidated results from the latest announcement: None

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Others

1. Changes in the significant subsidiaries during the period (Changes in specified subsidiaries resulting in change in the scope of consolidation): None
2. Changes in accounting policies, or changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: None
   2. Changes excluding the above: None
   3. Changes in accounting estimates: None
4. Number of shares issued and outstanding (common stock)
5. 1. Number of shares issued and outstanding at the end of each period (including treasury stock):

As of Jun. 30, 2021	551,268,104	shares	As of Mar. 31, 2021	551,268,104 shares
(ii) Number of treasury stock at the end of each period:
As of Jun. 30, 2021	38,713,303	shares	As of Mar. 31, 2021	38,717,721 shares
(iii) Average number of shares issued and outstanding in each period:
Three months ended Jun. 30, 2021	512,553,816	shares	Three months ended Jun. 30, 2020	512,164,857 shares

This summary of quarterly financial results is out of scope of review by certified public accountants or an auditor.

Cautionary statement with respect to forward-looking statements

The forecasts in this document are based on currently available information and certain assumptions that the Company regards as reasonable, and actual results may materially differ from any future results expressed herein due to various factors.

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1. Business overview

(1) Qualitative information regarding consolidated business results

The NSK Group is promoting a range of initiatives toward its 6th Mid-Term Management Plan, which spans the three years beginning April 2019 and sets a target of "building a business base and strengthening resources in preparation for the next growth phase." Positioning safety, quality, compliance and environment as NSK core values, we continue to implement two key policies of "operational excellence" and "challenging innovation" and are addressing three main management themes: new initiatives targeting growth, enhancement of managerial resources, and contribution to the environment and society.

Looking at the global economy during the first quarter of the fiscal year ending March 31, 2022, although COVID-19 infection rates varied by country and region, economic activity has gradually progressed and the global economy continued moving toward recovery.

In Japan, although exports increased due to economic recovery overseas, consumer spending remained weak in certain categories. In the US, large-scale economic stimulus measures and easing of restrictions supported consumer spending and the economy is steadily picking up. In Europe, the rollout of COVID- 19 vaccines put the brakes on the spread of infection and consumer spending and capital expenditure increased in line with the resumption of economic activity. In China, capital expenditure and exports to the US continued growth steadily and the economy is recovering.

In this economic environment, consolidated sales for the first quarter of the year ending March 31, 2022 totaled ¥213,458 million, a year-on-year increase of 65.6%, and operating income totaled ¥9,177 million (compared to an operating loss of ¥12,903 million in the same period last year). Income before income taxes was ¥9,478 million (compared to a loss before income taxes of ¥12,527 million in the same period last year). Net income attributable to owners of the parent was ¥4,833 million (compared to a net loss attributable to owners of the parent of ¥9,699 million in the same period last year).

Business segment information

1) Industrial Machinery Business segment

In the industrial machinery business, a global recovery in capital expenditure was seen in the first quarter due to improved business conditions in the manufacturing industry in addition to increasing demand in the semiconductor industry. Sales increased compared to the same period of the previous year.

Looking at the Company's results by geographic breakdown, demand in Japan increased, especially in the machine tool, semiconductor, electrical and electrical accessory sectors. In the Americas and Europe, sales in the electrical and electrical accessory and aftermarket sectors increased. In China, demand steadily increased in the machine tool and aftermarket sectors.

As a result, sales in the industrial machinery business totaled ¥82,193 million, a year-on-year increase of 40.6%, and operating income was ¥6,531 million (compared to an operating loss of ¥679 million in the same period last year).

1. Automotive Business segment

With global vehicle production dropping significantly during the first quarter of the previous fiscal year due to the spread of COVID-19, a rebound in sales saw a year-on-year increase, although this was partially restricted by semiconductor supply shortages.

Looking at the Company's results by geographic breakdown, sales in Japan increased as demand recovered from the same period last year. In the Americas and Europe, sales increased due to recovery from the previous year's weak vehicle sales, which had been impacted by the COVID-19 lockdown restrictions. In China, sales increased slightly compared to the same period last year, as sales in the previous year had already shown recovery due to China's rapid recovery from the impact of COVID-19. In other Asian countries, mainly ASEAN nations and India, sales increased compared to the same period last year.

As a result, sales in the automotive business totaled ¥121,732 million, a year-on-year increase of 84.5%, and operating income was ¥1,675 million (operating loss was ¥11,939 million in the same period last year).

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1. Qualitative information regarding consolidated financial position
   Assets and liabilities
   At the end of the period, following the recovery of overall business conditions, cash and cash equivalents and other financial liabilities (current) decreased due to repayment of part of the borrowings procured as a countermeasure for liquidity risks posed by the global spread of COVID-19. Cash and cash equivalents decreased by ¥15,032 million and other financial liabilities (current) decreased by ¥13,206 million compared to the same period of the previous year. There was an increase of ¥13,527 million in inventories due to increased production volume in anticipation of demand growth.
   Total assets at the end of the period were ¥1,172,294 million, an increase of ¥4,796 million compared to total assets as of March 31, 2021. Total liabilities at the end of the period were ¥584,632 million, a decrease of ¥9,437 million compared to total liabilities as of March 31, 2021.

Total equity

Total equity at the end of the period was ¥587,661 million, an increase of ¥14,233 million compared to total equity as of March 31, 2021 primarily due to the increase in net income attributable to owners of the parent and other components of equity, which offset the payment of cash dividends.

Qualitative information regarding cash flow

Total cash and cash equivalents at the end of the period were ¥161,606 million, a decrease of ¥15,032 million compared to total cash and cash equivalents as of March 31, 2021. This represents a decrease of ¥24,284 million compared to total cash and cash equivalents as of the same period last year due to repayment of borrowings as the current business condition is improving.

1. Net cash flow provided by operating activities
   Net cash flow provided by operating activities totaled ¥12,949 million, an increase of ¥3,540 million compared to the previous year. This includes the net income before income taxes of ¥9,478 million with subsequent adjustments including depreciation and amortisation, and change in working capital.
2. Net cash flow used in investing activities

Net cash flow used in investing activities totaled ¥5,984 million, a decrease of ¥2,820 million compared to the previous year. This includes purchases of property, plant and equipment totaling ¥6,078 million.

3) Net cash flow provided by financing activities

Net cash flow used by financing activities resulted in an outflow of ¥22,757million (net cash provided by financing activities was ¥47,313 million at the same period last year.) The main cash outflows were ¥5,005 million in dividends paid and ¥15,647 million in decrease in short-term loans.

(3) Explanation regarding future forecast information including consolidated business forecast

No revision has been made to the consolidated business forecasts for the year ending March 31, 2022 announced on May 11, 2021.

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2. Quarterly consolidated financial statements and notes

(1) Quarterly consolidated statements of financial position

			(Millions of yen)
		As of Mar. 31, 2021	As of Jun. 30, 2021
Assets
Current assets
Cash and cash equivalents	176,638	161,606
	Trade receivables and other receivables	185,228	184,443
Inventories	150,046	163,574
Other financial assets	1,569	1,617
Income tax receivables	4,670	4,528
Other current assets	15,850	19,544
Total current assets	534,004	535,314
Non-current assets
Property, plant and equipment	378,677	371,471
Intangible assets	39,435	39,501
	Investments accounted for using equity method	29,773	27,138
Other financial assets	79,203	78,830
Deferred tax assets	10,962	11,296
Net defined benefit assets	88,809	101,943
Other non-current assets	6,632	6,798
Total non-current assets	633,493	636,980
Total assets	1,167,498	1,172,294
Liabilities and Equity
Liabilities
Current liabilities
Trade payables and other payables	111,609	109,313
Other financial liabilities	130,205	116,998
Provisions	318	278
Income tax payables	3,203	5,635
Other current liabilities	54,888	59,411
Total current liabilities	300,224	291,637
Non-current liabilities
	Financial liabilities	223,211	218,837
Provisions	2,919	3,002
Deferred tax liabilities	42,225	45,301
Net defined benefit liabilities	17,349	17,657
Other non-current liabilities	8,139	8,196
Total non-current liabilities	293,845	292,994
Total liabilities	594,070	584,632
Equity
	Issued capital	67,176	67,176
Capital surplus	80,338	80,628
Retained earnings	397,837	398,687
Treasury shares	-37,303	-37,299
Other components of equity	46,325	59,973
	Total equity attributable to owners of the parent	554,375	569,165
Non-controlling interests	19,052	18,496
Total equity	573,428	587,661
Total liabilities and equity	1,167,498	1,172,294

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