Business Risks and Other Risk Factors

As NSK’s business activities spread to more areas, the range of anticipated risks also widens. Listed below are the principal risk factors we have identified with the potential to significantly impact the NSK Group’s financial position, business performance, and cash flow. These risks represent the NSK Group’s judgment as of June 23, 2023.
NSK has established a risk management framework as stipulated in the NSK Group’s Risk Management Rules and adopted a range of measures in order to avoid or reduce risks. Risks including changes in technology, natural disasters and infectious diseases, and changes in local conditions are comprehensively identified and reported on either a regular or immediate basis.

Representative Risks and Mitigation Measures

Risk Heat Map

Risks Related to the Impact of Infectious Disease Outbreaks

Over the past several years, the global spread of the COVID-19 pandemic has been a significant risk to business operations. Specifically, the impact of the pandemic led to reduced product sales from the drop in automotive production and downturn in demand in the industrial machinery sector due to the strict movement restrictions imposed in China by the country’s zero-COVID policy.

During that time, the NSK Group put the safety and security of its customers, business partners, and employees first. In addition to thoroughly implementing measures to prevent the spread of COVID-19 and establishing response procedures, the NSK Group also promoted work style reform in preparation for a post-COVID world through measures such as working from home and encouraging the use of online conferencing. Additionally, NSK worked to minimize its supply chain risk in order to ensure business continuity and strengthen its corporate foundation by sharpening its competitive edge and restoring profitability. Although the COVID-19 pandemic has been subsiding since we entered 2023, the NSK Group will apply the knowledge and experience it gained from the pandemic to risks associated with new infectious disease outbreaks in the future.