NSK Ltd.
For Immediate Release | May 11, 2021 |
CONSOLIDATED RESULTS FOR THE YEAR ENDED MARCH 31, 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 |
Date of the ordinary general shareholders' meeting | June 25, 2021 |
Payment date of cash dividends | June 11, 2021 |
Filing date of securities report | June 25, 2021 |
(Figures are rounded down to the nearest million yen) | ||||||||||||||||
1. Consolidated financial highlights for the year ended March 31, 2021 | ||||||||||||||||
(1) Consolidated financial results | (% indicates changes from the previous year) | |||||||||||||||
Net income | Total | |||||||||||||||
Operating | Income before | Net income | attributable to | |||||||||||||
Sales | comprehensive | |||||||||||||||
income | owners of the | |||||||||||||||
income taxes | income | |||||||||||||||
parent | ||||||||||||||||
Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | |||||
Year ended Mar. 31, 2021 | 747,559 | -10.0 | 6,364 | -73.0 | 5,889 | -75.5 | -748 | - | 355 | -98.0 | 58,708 | - | ||||
Year ended Mar. 31, 2020 | 831,034 | -16.2 | 23,604 | -70.2 | 24,065 | -69.6 | 18,108 | -69.2 | 17,412 | -68.8 | -11,134 | - | ||||
Basic earnings per share | Diluted earnings per share | Return on equity | Income before income | Operating income margin | ||||||||||||
(ROE) | taxes / Total assets | |||||||||||||||
Yen | Yen | % | % | % | ||||||||||||
Year ended Mar. 31, 2021 | 0.69 | 0.69 | 0.1 | 0.5 | 0.9 | |||||||||||
Year ended Mar. 31, 2020 | 34.00 | 33.91 | 3.3 | 2.3 | 2.8 | |||||||||||
(Note) Share of profits of investments accounted | Year ended Mar. 31, 2021 | 4,076 million yen | Year ended Mar. 31, 2020 | 2,282 million yen | ||||||||||||
for using the equity method |
(Note) Basic earnings per share and diluted earnings per share are calculated based on the net income attributable to owners of the parent.
(2) Consolidated financial position
Total equity attributable | Ratio of equity | Equity per share | |||
Total assets | Total equity | attributable to owners of | attributable to owners | ||
to owners of the parent | |||||
the parent to total assets | of the parent | ||||
Millions of Yen | Millions of Yen | Millions of Yen | % | Yen | |
As of Mar. 31, 2021 | 1,167,498 | 573,428 | 554,375 | 47.5 | 1,081.60 |
As of Mar. 31, 2020 | 1,029,884 | 526,518 | 505,505 | 49.1 | 987.01 |
(3) Consolidated results of cash flow
Net cash provided by | Net cash used in investing | Net cash provided by | Cash and cash equivalents | |
operating activities | activities | financing activities | at the end of the period | |
Millions of Yen | Millions of Yen | Millions of Yen | Millions of Yen | |
Year ended Mar. 31, 2021 | 53,842 | -51,096 | 29,992 | 176,638 |
Year ended Mar. 31, 2020 | 72,387 | -39,784 | -21,333 | 137,298 |
2. Cash dividends
Cash dividends per share | Total dividend | Dividend | Dividend on | |||||
payout ratio | equity (DOE) | |||||||
End of the | End of the | End of the | Year-end | Full-year | (Full-year) | (Consolidated) | (Consolidated) | |
1st quarter | 2nd quarter | 3rd quarter | total | |||||
Yen | Yen | Yen | Millions of Yen | % | % | |||
Year ended Mar. 31, 2020 | - | 20.00 | - | 10.00 | 30.00 | 15,550 | 88.2 | 2.9 |
Year ended Mar. 31, 2021 | - | 10.00 | - | 10.00 | 20.00 | 10,367 | 2,885.8 | 1.9 |
Year ending Mar. 31, 2022 | - | 10.00 | - | 15.00 | 25.00 | 33.7 | ||
(Forecast) | ||||||||
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3. Forecast of consolidated results for the year ending March 31, 2022
(% indicates changes from the previous year)
Sales | Operating income | Income before | Net income attributable | Basic earnings | |||||
income taxes | to owners of the parent | per share | |||||||
Six months ending Sep. 30, | 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 | |
2021 | |||||||||
Year ending Mar. 31, | 860,000 | 15.0 | 53,000 | 732.7 | 52,500 | 791.5 | 38,000 | - | 74.14 |
2022 | |||||||||
Others
- Changes in the significant subsidiaries during the period (Changes in specified subsidiaries resulting in change in the scope of consolidation): None
- Changes in accounting policies, or changes in accounting estimates
- Changes in accounting policies required by IFRS: None
- Changes excluding the above: None
- Changes in accounting estimates: None
- Number of shares issued and outstanding (common stock)
- Number of shares issued and outstanding at the end of each period (including treasury stock):
As of Mar. 31, 2021 | 551,268,104 shares | As of Mar. 31, 2020 | 551,268,104 shares |
(ii) Number of treasury stock at the end of each period: | |||
As of Mar. 31, 2021 | 38,717,721 shares | As of Mar. 31, 2020 | 39,111,034 shares |
(iii) Average number of shares issued and outstanding in each period: | |||
Year ended Mar. 31, 2021 | 512,427,148 shares | Year ended Mar. 31, 2020 | 512,142,780 shares |
(Reference)
Non-consolidated financial highlights for the year ended March 31, 2021
(1) Non-consolidated financial results
(% indicates changes from the previous year)
Sales | Operating income | Ordinary income | Net income | |||||
Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | Millions of Yen | % | |
Year ended Mar. 31, 2021 | 389,199 | -8.9 | -3,108 | - | 15,329 | -21.5 | 16,178 | -23.9 |
Year ended Mar. 31, 2020 | 427,006 | -13.5 | -6,372 | - | 19,518 | -32.1 | 21,267 | -24.8 |
Net income per share - | Net income per share - | |||||||
Basic | Diluted | |||||||
Yen | Yen | |||||||
Year ended Mar. 31, 2021 | 31.54 | - | ||||||
Year ended Mar. 31, 2020 | 41.49 | - |
(Note) The Company reported "Valuation loss on investments in subsidiaries & associates" under "Extraordinary loss" in the year ended March 31, 2020. However, as the amount of this component has become less material, related expenses have been included in "Non-operating expenses - Others" from the year ended March 31, 2021. Accordingly, "Ordinary income" for the year ended March 31, 2020 has also been adjusted.
(2) Non-consolidated financial position
Total assets | Net assets | Shareholders' equity to | Net assets per share | ||
total assets | |||||
Millions of Yen | Millions of Yen | % | Yen | ||
As of Mar. 31, 2021 | 717,129 | 273,959 | 38.1 | 533.22 | |
As of Mar. 31, 2020 | 666,368 | 252,086 | 37.8 | 490.93 | |
(Reference)Equity capital | As of Mar. 31, 2021 | 273,554 million yen | As of Mar. 31, 2020 |
(Note)Figures for non-consolidated financial highlights were formulated based on Japanese GAAP.
1. Business overview
(1) Qualitative information regarding consolidated business results
The NSK Group is promoting various initiatives of its 6th Mid-Term Management Plan, spanning the three years beginning April 2019 with a target of "build business base and strengthen resources in preparation for next growth phase." Setting safety, quality, compliance and environment as NSK core values, we continue to implement two key policies of "operational excellence" and "challenging innovation" established in the 5th Mid-Term Management Plan (From April 2016 to March 2019) and we address three main management themes: new initiatives targeting growth, enhance managerial resources, and contribute to the environment and society.
Looking at the global economy during the year ended March 31, 2021, the economic situation in each country deteriorated rapidly due to the global spread of COVID-19 in the first quarter. From the second quarter onward, resumption of economic activities has progressed in stages. Although economic activities appeared to be at a standstill in some regions due to even stricter restriction of activities because of the new surge of COVID-19 cases, the economy continued moving towards recovery.
In Japan, although exports increased against the backdrop of global recovery of vehicle production, consumer spending has partially been weak due to the second declaration of a state of emergency in response to COVID-19, and the economy remained in a severe condition. In the US, the economy continued to pick up as additional economic measures began to take effect and economic activities resumed further with the rollout of COVID-19 vaccines. In Europe, although there were some signs of bottoming out in capital expenditure and picking up in manufacturing activities after easing of restrictions, the pace of recovery became slow due to the resurgence of cases. In China, manufacturing activities quickly resumed, and the economy continued to show signs of picking up such as recovery in new vehicle sales thanks to the government's vehicle subsidies.
In the economic environment, consolidated sales for the year ended March 31, 2021 totaled ¥747,559 million, a year-on-year decrease of 10.0%, and operating income totaled ¥6,364 million, a year-on-year decrease of 73.0%. Income before income taxes was ¥5,889 million, a year-on-year decrease of 75.5%. Net income attributable to owners of the parent was ¥355 million, a year-on-year decrease of 98.0%.
Business segment information
1) Industrial Machinery Business segment
In the industrial machinery business, the cautious approach in capital expenditure across the world was seen in the first quarter against the backdrop of the contraction of economic activities due to the global spread of COVID-19. Thereafter, production activities in China returned toward normal before other regions, and demand in regions other than China also started to recover toward the end of the fiscal year. However, the full-year sales in the industrial machinery business decreased year-on-year due to sluggish demand in the first half.
Looking at the Company's results by geographic breakdown, overall sales in Japan decreased due to slumping demand in every sector although the machine tools sector started to show recovery toward the end of the fiscal year. In the Americas, overall sales declined due to sales decrease in the aftermarket sector as well as the impact of the foreign exchange factor, while sales in the semiconductor sector increased. In Europe, overall sales declined due to sales decrease in the electrical and electrical accessory sectors. On the other hand, sales in China increased thanks to robust demand in the wind power, machine tools as well as electrical and electrical accessory sectors.
As a result, sales in the industrial machinery business totaled ¥275,226 million, a year-on-year decrease of 3.2%, and operating income was ¥7,697 million, a year-on-year decrease of 47.8%.
2) Automotive Business segment
Global vehicle production in the first quarter dropped substantially due to restrictions on movement, disruption in the supply chain and suspension of production because of the global spread of COVID-19. From the second quarter onward, although the automotive market changed to a recovering trend, the full-year sales in the automotive business decreased year-on-year due to the significant drop in the first quarter.
Looking at the Company's results by geographic breakdown, sales in Japan decreased due to a sluggish automotive market. In the Americas and Europe, sales dropped due to stagnant vehicle sales caused by a restriction on economic activities. In China, while sales in electric power steering (EPS) systems decreased, overall sales increased due to stronger sales of bearings and products for the automatic transmission (AT) systems.
As a result, sales in the automotive business totaled ¥449,722 million, a year-on-year decrease of 13.8%, and operating loss was ¥4,018 million (operating income was ¥9,174 million in the same period last year).
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Qualitative information regarding consolidated financial position
Assets and liabilities
In the fiscal year ended March 31, 2021, other financial liabilities (current) increased by ¥58,398 million compared to other financial liabilities (current) as of March 31, 2020 due to the borrowing in preparation for liquidity risk posed by contingencies including the global spread of COVID-19. Meanwhile, outflow associated with the acquisition of the condition monitoring system (CMS) business was ¥20,118 million. Accordingly, cash and cash equivalents increased by ¥39,340 million. Trade receivables and other receivables increased by ¥31,002 million and trade payables and other payables increased by ¥14,416 million as the business environment has recovered with the resumption of economic activities. Moreover, other financial assets (non-current) increased by ¥23,704 million due to the rise in stock prices.
As a result, total assets were ¥1,167,498 million, an increase of ¥137,614 million compared to total assets as of March 31, 2020. Total liabilities were ¥594,070 million, an increase of ¥90,704 million compared to total liabilities as of March 31, 2020.
Total equity
Total equity totaled ¥573,428 million, an increase of ¥46,909 million compared to total equity as of March 31, 2020 mainly due to the increase in net income attributable to owners of the parent and other components of equity, which offsets the decrease in cash dividends. - Qualitative information regarding cash flow
Total cash and cash equivalents at the end of the period were ¥176,638 million, an increase of ¥39,340 million compared to total cash and cash equivalents as of March 31, 2020. Free cash flow remained positive (¥2,745 million) despite the decreases in profits and cash due to the outflow associated with the acquisition of the CMS business.
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Net cash flow provided by operating activities
Net cash flow provided by operating activities totaled ¥53,842 million, a decrease of ¥18,544 million compared to the previous year. This includes the net income before income taxes of ¥5,889 million with subsequent adjustments including the depreciation and amortisation, and movements on working capital. - Net cash flow used in investing activities
Net cash flow used in investing activities totaled ¥51,096 million, an increase of ¥11,312 million compared to the previous year. This includes purchases of property, plant and equipment of ¥33,797 million and acquisition of shares of subsidiaries of ¥20,118 million associated with the acquisition of CMS business.
3) Net cash flow provided by financing activities
Net cash flow provided by financing activities totaled ¥29,992 million, an increase of ¥51,326 million compared to the previous year. The main cash inflows were ¥39,194 million in increase in short-term loans in preparation for contingencies such as the spread of COVID-19, and ¥16,727 million in proceeds from long-term loans. Meanwhile, the main outflows were ¥10,142 million in repayments of long-term loans and ¥10,253 million in dividends paid.
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(4) Business forecast
Regarding the business environment for the year ending March 31, 2022, the Company anticipates a pick-up in momentum will continue, although there are risk factors including further spread of COVID-19 and short supply of some components such as in-vehicle semiconductors, which will worsen business confidence.
The business environment surrounding both the industrial machinery and automotive businesses is expected to recover in machine tools and demand expansion in semiconductors as well as recovery in automotive demand due to increase in global automotive production volume.
Year ending Mar. 31, 2022 | (Changes from the previous year) | |
Consolidated financial highlights | ||
(IFRS) | ||
Sales | ¥ 860,000 million | (+15.0%) |
Operating income | ¥ 53,000 million | (+732.7%) |
Income before income taxes | ¥ 52,500 million | (+791.5%) |
Net income attributable to | ¥ 38,000 million | (-%) |
owners of the parent | ||
*Exchange rate forecast for the year ending March 31, 2022: 1 USD=¥106, 1 EUR=¥124, 1 CNY=¥15.7
*For business forecast by segment, please refer to page 16: "Supplementary material of consolidated results for the year ended March 31, 2021."
Notes
All forecasts are based on a number of assumptions regarding business environment and policies, and are subject to change with various factors. Actual financial results may differ materially and NSK accepts no liability whatsoever for any direct or consequential loss arising from any use of this report.
(5) Basic policy on appropriation of retained earnings and dividends
NSK places great importance on shareholder returns. As part of the 6th Mid-Term Management Plan, spanning the three years beginning April 2019, we have aimed to provide stable dividends to our shareholders on an ongoing basis, and set the target of dividend payout ratio ranging from 30% to 50% as well as a per-share annual dividend of 40 yen or more on a consolidated basis. Also we regard treasury shares as an option to execute agile capital policy, and set a target of a total return ratio of 50% during the three-year period. We take into account the financial situation and so forth to make proper decisions for the execution.
Based on the policy stated above, we comprehensively took into account our business performance in this fiscal year and future business environment. As a result, unfortunately the year-end dividends for the fiscal year ended March 31, 2021 will be ¥10.00 per share. The dividends for the first half of the year, paid on December 8, 2020, was ¥10.00 per share. Accordingly, the full year dividends for the fiscal year ended March 31, 2021 will be ¥20.00 per share, a ¥10 decrease from the fiscal year ended March 31, 2020.
The dividends forecast for the fiscal year ending March 31, 2022 are planned to be ¥25.00 per share (¥10.00 per share for the first half of the year.)
2. Basic stance on selection of accounting standards
Beginning with the consolidated financial statements in the Annual Securities Report for the year ended March 2016, NSK has adopted International Financial Reporting Standards (IFRS) in order to improve management efficiency through standardization of the group's financial reporting and enhance comparability of financial information across international capital markets.
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NSK Ltd. published this content on 11 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 May 2021 06:13:05 UTC.