A Message from the CEO

Akitoshi Ichii, President & CEO NSK Ltd.

Continuing the Challenge to Change & Go Beyond to Create Value with New Motion

After becoming the first company in Japan to develop and manufacture bearings in 1916, NSK has been refining its technologies that have kept society in motion for over 100 years. From automobiles, machine tools, robots, and wind power generation to home appliances and medical instruments, NSK’s products are used in a wide range of fields and have secured the company a world-class share of the market for precision bearings, ball screws, automotive bearings, and ball bearings.

In the automotive industry, technological development is accelerating throughout the world as the transition to electric vehicles (EV) progresses. This shift to EV presents an opportunity for NSK to introduce new products to the market and make its new technologies stand out from the competition. At NSK, we have jumped at this opportunity by devoting resources to automotive electrification to boost our development capabilities and revolutionize the way we work in order to meet the needs of our customers with products highly rated by the market such as our ball screws for electric-hydraulic brake systems. Taking on a multi-pathway approach that includes products for conventional internal combustion engine vehicles, we aim to secure the stability and profitability of our business by adapting our product and customer portfolio while stepping up to meet new demand, such as that for hydrogen-fueled vehicles.

In the industrial machinery industry, we can expect significant growth in precision machinery products and precision bearings for applications such as semiconductor manufacturing equipment, robotics, and machine tools as automation and AI becomes increasingly sophisticated to address the shrinking labor force. As technological advancements are made to implement renewable energy and energy conservation in industrial infrastructure, we will accelerate our decarbonization initiatives leveraging renewable energy, and we expect to see an expansion of business opportunities in products and services that reduce energy consumption as well as in wind power, hydrogen-related businesses, and cleantech. We will seize these new business opportunities while maintaining NSK’s competitive advantage and increase our operating profit margin through a focused expansion of highly profitable products and services.

In our mid-term management plan, MTP2026, we aim to achieve \900 billion in sales, \75 billion in operating income, and an ROE of 8% by pursuing growth with profitability based on our concept of “Bearings & Beyond.” We plan to leverage the long-term growth potential of the industrial machinery business to increase its sales ratio to approximately 60% by 2030—a scale on par with the automotive business. We will also further increase the value added to existing products by expanding solution-based sales, such as condition monitoring systems, in addition to expanding business areas and developing new products through our core technologies. In the areas of customer services and assembly unit products such as electric actuators, we will also seek out opportunities for M&A and joint ventures that will lead to increased technological capabilities and value added to our products.

Using these strategies, NSK will continue to build a business structure that is less affected by demand trends and the dramatically changing business environment in which we find ourselves. We will work to improve profitability and capital efficiency by increasing our resilience to downturns in demand such that we can achieve an operating profit margin of over 10% when demand is stable.

Moving forward, NSK will aim to be a company that continues to be needed, trusted, and favored by society by continuing to offer new value through our efforts to change and beyond. We would like to express our deep gratitude for the continued support of all our stakeholders.