May 19, 2014
NTN Corporation
2014/5/19

1

Contents
Ⅰ. Progress of mid-term management plan
“Revival 2014”
Ⅱ. Financial Results for FY2013 andForecast for FY2014
This presentation and comments made in this conference or during the following Q&A session include forward-looking
statements about management expectations for future performance and future business strategies. These statements
represent the best judgment of the management of the company based on the information currently available. However,there can be no assurance that future results will meet any expectation, estimate or projection conveyed by thesestatements or comments. Actual results may differ materially from management projections depending on various
factors such as changes in product demand, exchange rates and interest rates and contingent liabilities.

2014/5/19

2

Financial Result for FY2013 and Forecast for FY2014
Operating margin

FY2013 (Results)
Net sales ： 6,390 (100 million yen)
Operating income： 330 (100 million yen)
Operating margin： 5.2％
Net loss ： -146 (100 million yen)
Year-end dividends： 2 yen（Resumption of dividends）

Net sales(100 million yen)

Operating income(100 million yen)Completion of“Revival 2014”

NTN 2010for The Next Step

2014/5/19

Global Advance2013

Revival 2014

※Exchange rate of FY2014：US$=¥100, €=¥130

FY2014 (Forecast)
Net sales：6,600 (100 million yen)
Operating income：400 (100 million yen)
Operating margin： 6.1％
Net income： 200 (100 million yen)
Full year dividends： 5 yen

3Progress of mid-term management plan
“Revival 2014”
Completion of“Revival 2014”policies

Towards the new growthframework

１．”Emergency Measures”
 Reduce personnel costs and fixed costs
 Limit capital expenditure Reduce inventories

Improve profitability

２．”Centralization of Management Resources”
 Sales expansion for Aftermarket
 Strengthening Industrial machinery
business globally
 Greater profits in Automotive Business３．”Structural Reform”
 Reforms to personnel costs Acceleration of overseas production
 Selection of business
４．”Expansion of New Products and NewBusiness”
 Strengthen development of module
products and system products
 Full operation of the EV system products
business Development of composite material
products and market deployment

2014/5/19

・Sales expansion for Aftermarket
・Expansion for Industrial machinery・Greater profits in Automotive Business

Improve asset efficiency
・Improve capital investment efficiency

・Improve inventory turnover ratio

Better management framework
・Strengthen overseas production andlocal procurement
・Strengthening organizational structure
・Acceleration of new product development

4Improve profitability (Sales expansion for Aftermarket)＜FY2013 Results（compared with FY2012）＞ Net sales 1,038 (+16%), Operating income 177 (+20%)• Automotive parts were positive, despite a slowdown in demand for Industrial machinery• Automotive parts were positive in the Americas and Europe
Net sales（100 millionyen）

Operatingmargin(100 million yen)

＜FY2014 Forecast＞
Net sales 1,100 (+6%), Operating income 195 (+10%)(100 million yen)Japan

Strengthen sales system and increasein employees
Cooperate with distributors and provide technicalguidance to customers

Expand sales with collaborative system between
Americas three North American companies
Increase in automotive parts and products

2014/5/19

EuropeShift from western Europe to central Europe andRussia
Increase in new distributors for automotive parts

Asia

Increase in MRO projects with mobile technicalservice
Increase in new distributors for automotive parts

5

Improve profitability (Expansion for Industrial machinery)＜FY2013 Results（compared with FY2012）＞ Net sales 1012 (+8%),Operating income 33 (+120%)(100 million yen)•Construction machinery recovered in China, while wind turbine and rolling stock also increased•Rolling stock and aircraft were positive in Japan and Europe, while wind turbine and other segments
positive in the Americas
Net sales（100million yen）

＜FY2014 Forecast＞
Net sales 1,010 (±0%), Operating income 40 (+21%)
Operatingmargin(100 million yen)Japan

Increase in aircraft, machine tools, robots
Reduction in rush demand for construction
machinery

Recovery in demand for construction machinery
Americas New orders for agricultural machinery will alsoplay a roleEuropeAsia
2014/5/19

Increase in aircraft and wind turbine
Slight reduction in general machinery such as
gearboxes and reducers

Increase in wind turbine and construction
machinery in China
Decrease in construction machinery andmachine tools throughout Asia

6

Improve profitability (Greater profits in Automotive Business)＜FY2013 Results（compared with FY2012）＞ Net sales 4339 (+22%), Operating income 120 (become profitable)(100 million yen)

• In addition to ongoing growth of car production in the Americas, there was a recovery in
car production in Europe• Drastic increase in China due to rebound in demand for Japanese manufacturers, and Japanesecar sales were also positive
Net sales（100 million yen）

＜FY2014 Forecast＞
Net sales 4,490 (+3%),Operating income 165 (+38%)(100 million yen)

Operatingmargin

Japan

Reduction in rush demand before theincrease in consumption tax
Demand increase due to increase in exports
to customers

Major increases towards Japanese andAmericas American manufactures with market growthof car production
Slight reduction due to the impact of reduced

Europe demand from certain manufacturers
Asia
2014/5/19

Start of mass-production of new orders
Increase in demand due to local Chinesemanufactures7

Improve asset efficiency
Depreciation and Capital expenditure

Inventory turnover ratio

Revival 2014
Scope of depreciation
expenses
・Increased operating rateof existing equipment
・Reduction in equipment
unit costs

Revival 2014
・More stringent basic
inventory
・Better “system” forinventory management

2014/5/19

8

Better management framework(on local site with local materials by local personnel)
Overseas production ratio

Local procurement ratio

Overseas production ratio

Revival 2014

Revival 2014

Xiangyang NTN-Yulon
Drivetrain Co., Ltd.
Mass productionin April, 2015

NTN Manufacturingde Mexico
Mass production
in FY2015

Acceleration ofcustomer approval
Adjust amount toswitch due toexchange rates

NTN Fukuroi Corp.
Second Plant
Mass productionin May, 20142014/5/199Better management framework(Strengthening organizational structure)

Establish CSR Headquarters
Strengthen system for implementing corporate social responsibility on a global scale
・Incorporate the “Corporate Social Responsibility Department”, “Legal Department”
and “Fair Trade Promoting Department”
・Establish a new “Internal Control Section” in each Office of the General manager overseas

Strengthen Aftermarket Business Headquarters
Increase employees, strengthen a direct visit to customers and technical service system
・Establish a new “East Japan Sales Office”, “West Japan Sales Office” and “Central
Japan Sales Office”
・Establish a new “Sales Engineering Planning Department” and “Production PlanningDepartment”

Establish a new Global Human Resource Development Department
・Systematic training of global human resources capable of being active across countries
and regions
・Training of human resources capable of passing on technology and skills to manufacturing
plants around the world・Promotion of diversity
2014/5/1910Better management framework(Acceleration of new product development)Commercialization of module products
and system products

Strengthen development of composite
material products

Condition Monitoring System (CMS)

Amorphous

Seal rings

MotorizedLinear
ModulePlastic Sliding nutand screw

SystemBearings withsensor
High-strength
Sintered Gear

MechanicalClutchUnit(MCU)

ModuleSteering System
for Steer-by-Wire
In-wheel Motor
SystemBall Screw
Drive Module
Bearing Unit

For Industrial
machinery

Unit

Compact EV
commuters

Individualproducts
Hub bearing

For Automobile

2014/5/19

Products withsensorConverted
EV

Acceleration of EV system products
demonstration project11Completion of Mid-term management plan
“Revival 2014”
Amount of effects on operating income of major policies（100 million yen）
Centralization ofManagement Resources（proportional expenses）
Structural Reform（early retirement system ＋distribution innovation）
Emergency Measures（personnel costs ＋expenses）

55

55

159

250

136

173

64

82
75

56

67

3575

PlanResults
FY2012 2HPlans were brought forward for
emergency measures to achieve
reductions.
2014/5/19

175

250

4255

4247

35

Plan

Results

Firstplanning

Forecast

FY2013

FY2014420 employees completed their early retirement procedures outof 600 planned. The rest to be applied to Aftermarket Business.
Proportional expenses reduced much further than planned.

12Financial Results for FY2013
andForecast for FY2014

2014/5/19

13

Contents★Financial Results for FY2013 : Key Factors
１．Consolidated Statements of Operation
２．Net Sales by Region
３．Net Sales and Operating Income by Business Sector
４．Results by Business Sector （Quarterly Trend）
５．Analysis of Operating Income(1) FY2013(2) FY2014
６．Net Sales and Operating Income by Region(1) Japan, Americas(2) Europe, Asia & Others
７．Inventories
８．Interest-Bearing Debt
９．Capital Expenditure and Depreciation
１０．Cash Flows
2014/5/1914Financial Results for FY2013 : Key Factors
FY2013 Results◇ Net sales increased by 99.4 billion yen (+18.4%) year-on-year to 639 billion yen.
◇ Operating income increased by 25.7 billion yen (4.5-times) year-on-year to 33 billion yen.

◇ Net loss following extraordinary losses for the year was 14.6 billion yen (the last year was14.2 billion yen)
◇ Sales CF was 69.1 billion yen (+48.6 billion yen year-on-year), Free CF was 34.9 billion yen(+71 billion yen), both the highest ever recorded.

◇ Dividends planned for 2 yen at year end.

FY2014 Forecast◇ Net sales forecast to increase by 21 billion yen (+3.3%) year-on-year to 660 billion yen.
◇ Operating income forecast to increase by 7 billion yen (+21.2%) year-on-year to 40 billion yen.

◇ Net income forecast to increase by 34.6 billion yen year-on-year to 20 billion yen.
◇ Dividends planned for 5 yen for the year (2.5 yen for both interim and year-end).
◇ Exchange rate of 1US$ = 100 yen, 1EURO = 130 yen.
2014/5/1915

1. Consolidated Statements of Operation(100 million yen)

Net sales
Operatingincome
OperatingmarginOrdinary income
Extraordinary
income/loss
Net income/loss
Exchange US＄rate

EURO2014/5/19

FY2012
Results

FY2013Results

FY2014
Forecast

Year on year
FY2013
FY2014

①②

③

5,396
73(1.3%)6,390
330(5.2%)

6,600
400(6.1%)

994
257(3.8%)

210
70(0.9%)25- 164
- 142

287
- 311
- 146

330
0200

262
- 147
-543311
346

82.9
106.8

100.2
134.2

100.0
130.0

17.3
27.4

- 0.2
- 4.2

②－①

③-②

16

2. Net Sales by Region＜Net Sales by Region＞(100 million yen)
Year on year
FY2013②-①

Year on year
FY2014③-②FY2012

FY2013

FY2014

Results

Results

Forecast①②③Total

Volume

Forex

Total

Volume

Forex

Japan

1,775

1,791

1,810

16

16019190

Americas

1,416

1,746

1,890

330

36294

144

153-8Europe

1,248

1,663

1,585

415

76

339

- 78

- 31

- 47

Asia &Others

958

1,190

1,315

232

44188

125141

- 16

Total

5,396

6,390

6,600

994

172

821

210

281

- 71

2014/5/19

17

3. Net Sales and Operating Income by Business Sector＜Net Sales by Business Sector＞(100 million yen)
Year on year
FY2013
FY2014②-①③-②

FY2012FY2013

FY2014

ResultsResults

Forecast①②③

Total Volume Forex

Total Volume Forex

Aftermarket

892

1,038

1,100

146

6 140

6274 -13

Industrial
machinery

937

1,012

1,010

74 -41 115-2

6

Automotive

3,566

4,339

4,490

773 207 566 151 201 -50

6,600

994 172 821 210 281 -71

5,396
6,390
＜Operating Income by Business Sector＞
Total-8(100 million yen)

FY2012FY2013

FY2014

Year on year

Results

Results

Forecast

FY2013

FY2014①②③②-①③-②

Aftermarket

147

16.5%

17717.1%

195

17.7%

300.6

180.6

Industrial
machinery

151.6%

333.2%

404.0%

171.670.8

Automotive- 90-2.5%

1202.8%1653.7%2105.3

450.9

Total

731.3%

330

5.2%

4006.1%

257

3.8

700.9

2014/5/19

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4. Results by Business Sector （Quarterly Trend）◆Major improvements to profit ratio across all business types in 4Q with the effects of exchange rates
Automotive
Industrial machinery
Aftermarket

Operating Income/ Operating Margin

Net Sales’13/3-1Q 2Q
2014/5/19

3Q

4Q’14/3-1Q 2Q

3Q

4Q’13/3-1Q

2Q

3Q 4Q ’14/3-1Q 2Q 3Q

4Q
19

5-1. Analysis of Operating Income （FY2013）＊All figures in 100 million yen.
Positive factors（ 319 ）

Negative factors（ 62 ）
Sales price levels

Decrease in variablecosts
Scale merits

66

27

9

Increase in personal costs

26

Expenses etc.
(Depreciation -5, Other -21)

35

Exchangerates

+257
218
FY2012
Full year
Operatingincome73

FY2013Full year
Operatingincome
330

FY2012 Full year < Results >vsFY2013 Full year < Results >2014/5/19

20

5-2. Analysis of Operating Income （FY2014）＊All figures in 100 million yen.
Negative factors（ 151 ）

Positive factors（ 221 ）Increase in personal costs
Sales price levels
Decrease invariable costs

9055

Expenses etc.
(Depreciation -6, Other -23)

53

Exchange rates

29
Scale merits

131

14+70
FY2014
Full year
Operatingincome

FY2013Full year
Operatingincome
330

400

FY2013 Full year < Results >vsFY2014 Full year < Forecast >2014/5/19

21

6. Net Sales and Operating Income by Region《 Americas 》《 Japan 》
Net Sales

Operating Income

2014/5/19(100 million yen)

Net Sales(100 million yen)

Operating Income226. Net Sales and Operating Income by Region《 Europe 》
Net Sales

Operating Income

2014/5/19(100 million yen)

《 Asia & Others 》
Net Sales(100 million yen)

Operating Income

237. Inventories
Inventories (100 million yen)

2,500

3.5

3.3

1,551

1,633

2,000

3.8

4.0

1,665

1,650

4.0

3.0

1,500
1,000

977

1,102

1,140

1,142

1.0

500
0

2.0

574

530

525

508

FY2011FY2012FY2013

FY2014Inventory turnover ratio (times)

The year ended March, 2014 was +3.2 billion yen year-on-year (of which physical quantity
was -8.2 billion yen)JapanOverseas
Inventory turnover ratio (times)

0.0(100 million yen)

Inventories
OverseasJapanIn ve n t o r y t u r n o ve rr at io(t im e s)

2014/5/19

FY2011FY2012FY2013

FY2014

Results

Results

Results

Forecast

1,551(977)
(574)

1,633
(1,102)
(530)

1,665
(1,140)
(525)

1,650
(1,142)
(508)

3.5

3.3

3.8

4.0
24

8. Interest-Bearing Debt
5,000
4,000

39.2%

3,000

2,720

2,000

924

1,000

1,7960FY2011

47.0%

45.0%

44.9%

50%

3,608

3,818

3,680

40%

1,322

1,427

1,356

30%
20%

2,286

2,391

2,324

FY2012FY2013

FY201410%0%Interest bearing debt ratio (％）

Inteerest bearing debt (100 million yen)

 Net interest-bearing debt for the year ended March, 2014 reduced by 22.6 billion yen compared toprevious year.
JapanOverseas
Interest-bearing debt ratio (%)(100 million yen)

In t e r e st - be ar in g de bt

Overseas
JapanNe t In t e r e st - be ar in gde bt
In t e r e st - be ar in g de bt
r at io (% )2014/5/19

FY2011FY2012FY2013

FY2014

Results

Results

Results

Forecast

2,720(924)(1,796)
2,194

3,608
(1,322)(2,286)
2,747

3,818
(1,427)(2,391)
2,521

3,680
(1,356)(2,324)
2,520

39.2%

47.0%

45.0%

44.9%
25

9. Capital Expenditure and Depreciation
 Capital investment for FY2013 and forecasts for FY2014 are both within the scope of depreciation expenses.
Investment（Japan）

600

300

348

342
357

203

133

0
F Y2011 R es ul ts

Capit al e xpe n dit u r eOverseasJapan

Depreci a ti on

OverseasJapan

2014/5/19

Depreciation（Overseas）

490

139
181

Depreciation（Japan）

600

544

364

Investment（Overseas）

161
188

F Y2012 R es ul ts

393332350300233

22325724488396170

F Y2013 R es ul ts

94

1620(100 million yen)

F Y2014 F oreca s t

FY2011Results

FY2012
Results①FY2013
Results②

FY 2 0 1 4
Fo r e c ast ③

②-①

③-②

FY2011Results

FY2012
Results①FY2013
Results②

FY 2 0 1 4
Fo r e c ast ③

②-①

③-②

544(364)(181)
342(139)(203)

490(357)(133)
348(161)(188)

332(244)(88)393(223)(170)

350(256)(94)396(233)
(162)

-158
(-113)(-46)
45(63)(-18)

18(12)(6)
3(10)(-8)
26

10. Cash Flows
Sales cash flow and Free cash flow both the highest ever.
FY2011Results(100 million yen)

FY2012
Results ①FY2013
Results ②FY2014
Forecast③

②-①

③-②

Ⅰ．Cash flow from operating
activities

171

205

691

367

486

-324

Ⅱ．Cash flow from investing
activities

-528

-566

-341

-363

225

-22

Ⅲ．Cash flow from financing
activities

472

696

66

-121-630-187

11020-20

20-40

125

335

436-137

101-573

Ⅳ．Effect of exchanging rate translation
on cash and cash equivalents

Ⅴ．Net increase in cash andcash equivalents
1,000CF from operating activities

CF from investing activities

Net CF691

500349205

17136740-500

- 528

- 358

- 566

- 361

- 341

- 363

FY2013Results

FY2014
Forecast-1,000FY2011
Results

2014/5/19

FY2012
Results

27

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