New Medium-term management plan

Global Advance2013
April.2011

March.2014

Beginning Year

August 1st,２０１１
ＮＴＮ Corporation
2011/8/1

1

New Medium-term management plan
“Global Advance 2013”
１． Results of “NTN 2010 for The Next Step”
２． Target and Business Strategy of “GlobalAdvance 2013”2011/8/1

2

Results of “NTN 2010 for The Next Step”• Achieved a V-shaped recovery that exceeded initial plans, and expanded business inChina, Americas and Europe
FY2010（Results）

FY2010（Plan）

Comparison withPlan

Net sales （100 million yen）

5,301

4,900+401

Operating Income （100 million yen）

246190+56

Operating income margin

4.6%

3.9%

+0.7 point

Ordinary income （100 million yen）

211

130+81

Net income （100 million yen）

144

65+79

Inventory （100 million yen）

1,370

1,035+335

3.9

4.7-0.8

2,461

2,340+121

2.2

2.1+0.1

Interest-bearing debt （100 million yen）

2,233

2,560-327

D/E ratio

1.12

1.3-0.18

Inventory turnover ratio （times）
Property, plant and equipment（100 million yen）
Property, plant and equipment
turnover ratio （times）

improvement
NTN-ROI
2011/8/1

4.2%

3.7%

+0.5 pointNTN-ROI＝Net operating income after tax/(Inventory + Property, plant and equipment) 3

Results of “NTN 2010 for The Next Step”
Expanded business in Europe
through synergy with SNR






Ratio of European sales increased
as part of overall consolidated net sales

Basic preparationof NTN-SNR

Ａｓｉａ ＆Ｏｔｈｅｒｓ

17％

Expansion of production and sales sites
Japan
３５％
 Production start of CVJ in Romania plant （December,2009) Americas
22％ FY2010
 Establishment of sales site in Poland （December,2009）,
Russia （November,2010）
 Integrated sales companies and bases within the European region
EuropeBusiness expansion for Industrial machinery market
25％ Increase of mutual sales of needle, tapered roller bearing, etc
 Increased new orders for rolling stock around the world Increased new orders for the four major airplane engine
Ａｓｉａ ＆Ｏｔｈｅｒｓ
manufacturers in the world
16％
Expansion of business for auto parts of Automotive
Japan
Increase of new business development for Automotive
41％
FY2007
Acceleration of R&D for cutting-edge technology
Americasand commercialization25％
 high-resolution rotary sensor, multi axis load sensor, etc
EuropeCorporate name change to NTN-SNR ROULEMENTS (July 2010) ,Increase share of capital to 80% （April 2010）18％
2011/8/1

4

Results of “NTN 2010 for The Next Step”
NTN-LYC (image)

Sales trends in China

Reinforcement business base in China and Americas
350



Reorganized production of Industrial machinery bearingsProduction capacity increase of Noto region in Ishikawa Pref Operation of NTN HOUDATSU SHIMIZU CORPORATION(October,2009) Operation of NTN SHIKA CORPORATION (January,2010)
 Establishment of NTN NOTO Corporation (December,2010)2011/8/1

NTN HOUDATSU SHIMIZUCORPORATIONN e t s a le s（ 1 0 0 m illio n y e n ）Reinforcement of production, sales and technologicaloperations in China
 Production capacity increase for bearings and CVJs
on local site
Construction of the Opening of Nanjing Branch (October, 2010)
NTN China Technical Establishment of joint venture company in the Bearing Center Completed
Business with Luoyang LYC. (February, 2011) Construction of the NTN China TechnicalCenter Completed (May,2011)
Production capacity increase in Americas
 Established CVJ production subsidiary in Brazil(Established in June, 2010)
 Established joint venture company for pre-processing NTA Precision Axle Corp
(Established in December, 2010)
 Production increase of hub bearings

Ne t s ale s（100 m illio n ye n）

300
250
200150FY2008FY2009FY2010

Sale trends in Americas
12001100
1000
900
800
700600FY2008FY2009FY20105Towards the company’s 100th anniversary in the FY2017
Operating
Income margin

New Medium-term
management plan

15%

10%

100th Anniversary

Rapid Advance21483.8 billion yen
9.7%

FY2011585 billion yen
Global Advance
6.0%

Net sales
1 trillion yen

2013
700 billion yen
10%

FY2017

The First year

5%

NTN 2010 for
The Next Step530.1 billion yen
4.6%

April, 2011-March, 2014

Growth through Creativity
and Achievements 21
527.1 billion yen
1.8%

2005/3 06/3 07/3
2011/8/1

08/3

09/3

10/3

11/3

Size of circle：Net sales
Height of circle：Operating income margin
12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3
6

New Medium-term management plan
“Global Advance 2013”
Acceleration of globalization
by “On local sitewith local materials
by local personnel”

the company’s 100thanniversary
Toward 1 trillion yen

FY2013
Net sales：700 billion yen
Operating income margin：10%

Expand business globally with a focus on growthmarkets
Establish world’s No.1 business segments
Establish new business segments such as EV systems

Expand sales for Industrial machinery,
Aftermarket & Distributor
Expand sales in growth market
Expand local production and procurement
2011/8/1

7

“Global Advance 2013”
Trends on Net sales and Operating income• 32% increase in net sales over a 3-year period, with a 2.8-fold increase in operating income
Ne t sale s (1 0 0
8,000
m illion ye n )

8.6%

10.0%

9.7%

8.7%

◆9.3%
4.6%

7,000

1.8%

0.3%

3,883

700

3,000

2,000

1000

4,527

4,348

468332

376

350

400
300
200

95
141000FY2005

FY2006

Rapid Advance21

2011/8/1

700

500

2460FY2004

Operatingincom e900
（ 100 m illion800yen）

600

496

1,000

1300

1100

5,301

5,271

1400

1200

4,838

5,000

4,000

7,000

5,850

6,000

5,340

6.0%

Ope r at in g
1500
in c o m em ar gin

FY2007

FY2008FY2009FY2010FY2011FY2013Growth through Creativity
Global AdvanceNTN 2010 for
and Achievements 212013
The Next Step

8

Main fact of “Global Advance 2013”
NTN 2010 for
The Next StepFY2010 ①Net sales （100 million yen）

Global Advance 2013

Increase &Decrease

FY2013 ②FY2011

②-①

5,301

5,850

7,000+1,699

Operating Income （100 million yen）

246

350

700+454

Operating income margin

4.6%

6.0%

10%

+5.4 point

Net income

144

175

425

+281

1,370

1,300

1,400

+30

3.9

4.5

5.0+1.1

ROA

2.3%

2.7％

6.1%

+3.8 point

ROE

7.2%

8.5％

17.0%

+9.8 point

D/E ratio

1.12

1.07

0.75

0.37
improvement

NTN-ROI(※)

4.2%

6.0％

11.1%

+6.9 point$:¥85.7 €:¥113.1$:¥80.4 €:¥111.9$:¥80 €:¥110

Inventory （100 million yen）
Inventory turnover ratio （times）

Exchange rate
2011/8/1-NTN-ROI＝Net operating income after tax/(Inventory + Property, plant and equipment) 9

Target sales by region and business sector＜Target sales by region＞
・Major increase in Asian markets such as
China and India
・Acceleration of sales expansion in favorable
markets such as Europe and Americas
8,000
Ne t sale s(1 0 0 millio nye n )（+1,699）

7,000
5,850

5,000（+369）

6,000

2,235
5,000

JapanJapan

4,000Japan

5,301
2,056

1,866

35%
Europe （+412）

4,000Europe
1,328

2,000
1,000
0Americas
1,180
Asia &Othe rs

Europe
1,392

5,301
A f term a rk et

862
In du strial

Americas
1,304
Asia &O th e r s

1,098

FY2010FY2011

1,290

40%

A f terma rk et

1,010
In dustrial

In du strial

1,445

3,000（+821）

2,000

1,520
Asia &Othe rs

65%（+578）（+450）

1,150

Americas （+340）

927

2011/8/1

5,850

A f term a rk et （+428）

995

1,740
3,000

7,000

ye n )

7,000

7,000
6,000

＜Target sales by business sector＞
・ Expansion for Industrial machinery andAftermarket & Distributor market
・Shift to a 60:40 ratio for automotive/nonautomotive product
8,000
Ne t sale s（+1,699）(1 0 0 millio nA utomoti v e
A utomoti v e

3,444

3,690

FY2010FY2011

A utom oti v e

60%

4,265

1,000

1,505
0FY2013

FY201310

Business strategy for Industrial machinery market• Reinforcement of global production capacity for products such as large bearings and precision
bearings, and increase market share• Create products that stand out through the use of cutting-edge sensor technology, and provide a←Bearings forcomprehensive level of service
N e t sal e s（ 1 0 0 million
ye n ）（+450）

Industrial machinery

1,445

IC Tag Integrated
Bearing→

1,400

1,150

1,200JapanJapan

Reinforcement of production capacity tosuit increased global demand
Increase the number of new projects, including
those for renewable energy

EuropeBusiness expansion for large/precision bearings
for wind power generation, construction
machinery and airplane

Americas

Expand sales and production to becomea leading supplier of construction machineryand agricultural machinery

Asia

Acquire new orders for wind power generation,construction machinery and rolling stock andexpand production of bearings in China

995
1,000

Japan
800

Japan600EuropeEuropeEurope

Am e r ic as

400
Am e r ic as
Am e r ic as

200
Asia &Others

Asia &Others

FY2010FY2011

Asia &Others0

2011/8/1

FY201311

Business strategy for Aftermarket & Distributor market• Reinforcement machinery distribution network throughout Europe/Americas,
China and Asia
• Expand automotive parts business into regions
other than Europe（+428）

N e t sal e s（ 1 0 0 m illio nye n ）

1,290

1,200

1,010

Japan1,000862

Maintenance service Auto parts kit Training seminar with exclusive vanJapan

Create new demand for renewable energy
related business, and expand sales
to users with low market share

EuropeExpand regions for theauto- parts business
Expand equipment repair services

Americas

Focus on Aftermarket/ Distributor market
Further expansion of sales in theauto-parts business

Asia

Expand distribution network in India,
ASEAN and China
Expand sales to key distributors in China

Japan
800

EuropeJapan
600

EuropeEurope400

Am e r ic as
Am e r ic as

Am e r ic as

200
Asia &Ot h e r s

Asia &Ot h e r s

Asia &Ot h e r s0FY2010

2011/8/1

FY2011FY201312

Business strategy for Automotive market• Acceleration of business expansion of Axle bearing （World’s No.1）, CVJ（World’s No.2）• Design review and material change for more compact vehicles and global platforms• Faster development speed of products that meet environmental and fuelefficiency regulations （+821）

N e t sal e s（ 1 0 0 m illio nye n ）

4,265

4,000

3,690
3,444

3,000JapanJapanJapan

Low torque deep groove ball Drive Shaft Exclusivelybearing (without seal)
for Rear Wheel Drive Cars

Japan

Product and market development separated
into environmentally friendly vehicles
and low cost vehicles

EuropeAcquire new projects in Western Europe andexpand sales in new markets such as
Eastern Europe and Russia

Europe2,000EuropeEurope

Am e r ic as

1,000

Am e r ic as

Am e r ic as

Asia &Ot h e r s

Asia &Ot h e r s

FY2010FY2011

Asia &Ot h e r s0

2011/8/1

FY2013

Multi Axis Load Sensor
Integrated Hub Bearing

Respond to increased demand from AmericanAmericas and Japanese manufacturers, and expandsales through new projects

Asia

Expand local production in China, India andASEAN that are experiencing increased demand,and expand sales to local manufacturers
13Business expansion in growth market• Reinforcement local development, production and sales in the automotive market to suit increased
demand in each region• Increase production capacity for the industrial machinery market in fast-growing China in addition toJapan and Europe

North America
・Sales expansion for aftermarket/
distributor
・Production reinforcement ofNTN-BOWER
・ Production reinforcement ofautomotive productEastern Europe（Romania, Turkey, Russia, etc）
・ Production reinforcement of automotive productWestern Europe （France, Germany）
・Production reinforcement of large
Europe： and precision bearing of NTN-SNR

・Production
reinforcement oflarge bearing andprecision bearing forindustrial machinery

Japan：+20％+30％

Americas：+30％
Brazil・Production reinforcement of hub bearing
・Mass production start of CVJ
・Sales expansion for Industrial
machinery aftermarket

Asia：
+60％

Thailand・Production reinforcementof automotive product(pre-process)India・Mass production start of hub bearing
・Sales expansion for Industrial
machinery aftermarket
The circle and number represent the growth rate in each region during
the three year “Global Advance 2013” period

2011/8/1

JapanChina
・Increase utilization of theNTN China Technical Center
・Production reinforcement ofindustrial machinery bearing（rolling stock, large bearing, etc）
・Increase the number of sales
office and expand distributors
・Mass production start for local maker14

Acceleration of“On local site with local materials by local personnel”• Expand ratio of overseas sales/ production• Supply products from overseas plants to global markets, especially in Japan• Reinforce utilization of local materials, parts and equipment(increase local procurement ratio in Asia from 60% to 90%)
• Increase profits by improving actions in response to exchange rates and costs• Training and development of local staff at mother factories/research division
Ratio of Japan/Overseas

Ratio of Japan/Overseas

JapanJapan
Overseas

FY201330%
30%

Overseas45%

70%Overseas
70%

Japan
55%

Local production ofindustrial machinery inaddition to automotiveproducts

Business expansion ingrowth markets such as
China, India and Brazil
Japan
35%

FY20102011/8/1

Overseas
65%

Overseas
36%

Japan
64%

15

Reinforcement of Global Research Development System• Reinforcement the role and functionality of Japan and France for research• Reinforcement systems in each region around the world for development

2 bases＋αJapan
Productionengineering R&DCenter

Elemental Technology
R&D Center （Japan)

Research
ShareDevelopment

database

Industrial
Technical Center

NTN R&D Center（Japan）

Information
Research

DesignPrototyping/Testing
Production Engineering
Customers
Development

EuropeAmericas
Development

Development
SNR R&D Center（France）

Establish new businesses with
cutting-edge technology andproprietary technology
2011/8/1

NTN Automotive
Center (USA)

China
中中国国
NTN China TechnicalCenter (June, 2011)16

Three-year equipment investment plan
• Respond to increased demand for automotive around the world• Reinforce production capacity of large bearings for wind power system,
7,000
construction machinery in Europe and China

3,574
Net sales ◆Amount (accumulated)of equipment
investment for eachmedium term
management plan

4,838
◆

1,583

Japan

5,271
◆

1600+β
1,600

Chance has
come！

Japan

1,091

Breakdown of overseas
equipment investment
over the three year
“Global Advance 2013” period

Japan

Americas

Americas

March, 2005-

March, 2008-

Rapid Advance21
3 years

Growth throughCreativity andAchievements 21
2 years

EuropeEurope

OverseasJapanOverseas
Ove r se as

2011/8/1

◆

5,301
◆

512
＊All figures in
100 million yen.

Toward1 trillion yen

Asia
Asia &&Others
OthersOve r se as
March, 2010NTN 2010 for
The Next Step
2 years

March, 2012Global Advance2013
3 years

17

Faster commercialization for nextgeneration EV systems• Accelerate development of products for next-generation EV systems such as the In-Wheel Motor (EVSystem Division)• Shift from R&D for practical applications to faster mass-production and commercialization• Lead cost down and idea of new product by transferring new technology toward existing products
In-wheel
In-wheelMotorMotorSystem
Systemfor
forElectricElectricCommuters
Commuters
Motor & Reducer

Electric Commuter (Image)

In-wheel
In-wheelMotor
MotorSystem
Systemfor
forEV
EVcar
car
Control system (Including inverter)
EV car (image）

Create world’s No.1
Business segments
In-wheel typemotor integrated
axle unit

Hub bearing

One
OneMotor
MotorType
TypeElectricElectric
Vehicle(EV)
Drive
Vehicle (EV) DriveSystem
SystemTransfer new technology
toward existing products

Drive Motor Two-Speed Transmission

Steering
SteeringSystem
Systemfor
forSteer-by-WireSteer-by-WireSteering Reaction
Force Actuator

Commercialization+γ
Differential

2011/8/1

CVJ

Hub bearingWheel-turning Actuator18

For new growth and increased profits“Global Advance 2013”

FY2013：
Net sales：700 billion yen, Operating income margin：10%
FY2011：
Net sales：585 billion yen, Operating income margin：6%“Decision” and “Execution” and “Accomplishment”
Business expansion
in growth market-Expand business in
Europe and Americas-Expansion for
Aftermarket & Distributor-Reinforcement of production
capacity in local

Improvement ofoperating income margin-Acceleration of businessexpansion in Asia
-Faster commercialization
for EV products-Reinforcement oflocal management-Share up for
Industrial machinery-Reduce costs
for Automotive-Expand local procurement“On local site with local materials by local personnel ”
FY2010： Net sales：530.1 billion yen, Operating income margin 4.6%
2011/8/1

19

2011/8/120