FY3/2022
Financial Results Briefing
June, 2022

Nippon Piston Ring Co., Ltd.

Contents

1. Consolidated financial results for FY3/22
2. Forecasts of consolidated earnings for FY3/23
3. Management strategy【Reference】 Company profile

2/30

1. Consolidated financial results for FY3/22
2. Forecasts of consolidated earnings for FY3/23
3. Management strategy【Reference】 Company profile

3/30

Consolidated financial results for FY3/22/Comparing profit and loss by year

Demands in the global automotive industry showed signs of recovery, and sales and profit
greatly increased from the previous year despite the impact of production adjustments byautomobile manufacturers.
We upwardly revised the forecasts twice, and raised the year-end dividend because of the
progress in cost-reduction activities and week yen compared to the expected exchange rates.
（Unit：￥100M）

FY3/21

FY3/22

FY3/22Year-on-yearchangesResults(a)Initial forecast

Results(b)Net sales

453

500

508

55

Operating profit△2(△0.4%)

21（4.2%）

26（5.2%）

28（５.6%）

Ordinary profit

4

21

31

27

△8

13

19

27

Exchange rate EUR/JPY

USD/JPY106.76121.88105125109.90129.91

3.14
8.03

Dividend per share

￥20

￥60

￥70

￥50

Ｒ Ｏ Ｅ

△2.8%

6.2%

9.0%

Profit attributable toowners of parent

(b-a)

4/30

Consolidated financial results for FY3/22/Profit and loss by segment

Sales and profit increased from the previous year in both segment, and a stablerevenue base has been established.
Non-automobile engine business became profitable as a result of strengthening of
profitability in piston rings for marine engine and increased demand for
METAMOLD products (metal powder injection molding parts) used for industrial
equipment.

＜Automobile engine business＞

Sales（￥100M）

Operatingprofit ratio

480

Sales
（￥100M）

6%

60

2%

30

5.4%

4.6%
200

-0.1%
0

-2%

FY3/20FY3/21

FY3/220Operatingprofit ratio

73

69

435

398

400

＜Non-automobile engine business＞

3.8%

54

2%

-2.2%
-5.3%
FY3/20FY3/21-2%-6%

FY3/22
5/30

Consolidated financial results for FY3/22/Factors affecting changes in ordinary profit

Ordinary profit greatly increased as a result of the progress in cost reduction
activities, such as improving productivity and effective use of expenses, in addition
to the effect of increased production.
As for the increases in raw material prices, we have been negotiating withcustomers for passing the increases on to product prices, but all of the increase
could not be covered as the pass-on was delayed for about half year.

（Unit：￥100M）

40

Increased
production

30

4
△6

△10

Raw material
price
2021年度実績
FY3/2021
Results

原材料

増産効果

31

+1
△1
Nonoperating
incomeCost reduction（Including
passing theincreased raw
material prices
on to productprices）

0

△20

+9

+3

Expenses,etc

+22

20
10

Fluctuation of
exchange rate

Ordinary profit:＋2700 million yen
原価低減

為替変動

経費他

営業外収支

FY3/2022
Results
6/30

Consolidated financial results for FY3/22/Balance sheet

At the end of FY3/22, total assets increased from end of FY3/21. The factor is thatinventories increased due to production adjustments, long lead times caused bylogistics disruption, and soaring raw material prices.
Interest-bearing debt, equity-to-asset ratio and net debt-equity ratio improved
from previous year, and a stable financial position was maintained.

（Unit：￥100M）

End of FY3/21

End of FY3/22

Year-on-yearchangesCash and deposits

48

60

12

Trade receivables

105

111

6

Inventories

95

113

18

Fixed assets

357

372

15

Total assets

618

674

56

Payable

68

86

18

Interest-bearing debt

171

150

△21

Total liabilities

315

324

8

Net assets

303

350

47

Equity-to-asset ratio

46.4％

49.2％

2.8％

Net debt-equity ratio

0.43times

0.27times△0.16times

7/30

Consolidated financial results for FY3/22/Cash flow
The free cash flow increased as a result of the improvement of profit
situation. Also, the cash and deposit increased 1,200 million yen fromprevious year.
As for the financing cash flow, we repaid the debt which was borrowed
for risk countermeasures in FY3/21.
Operating CF

120
100

+65

80
60

Financing CF＆Others△22

60

Free cash flow
3,400 million yen

20
0

△31

48

40

（Unit：￥100M）

Investing CF(FY3/20: 100 million yen, FY3/21: 900 million yen)
2019年度Cash and deposit
as of March 31,
2021

減産影響

単価変動

営業外収支

Cash and deposit
as of March 31,
2022
8/30

1. Consolidated financial results for FY3/22
2. Forecasts of consolidated earnings for FY3/23
3. Management strategy【Reference】 Company profile

9/30

Forecasts of consolidated earnings for FY3/23/Assumptions

In the global economy, uncertainty is higher than in past years due tothe shortage of parts including semiconductors, rising resource prices,and situation of Ukraine.
As for the order environment, production adjustments by automobile
manufacturers are continuing. The factors described below are reflectedin the forecasts.

＜Factors of fluctuations＞
・Reduced productions by some automobile
・Covid-19
manufacturers
・Recovered production in second half ofExternal ・Shortage of semiconductor
FY3/22 is forecasted

factorInternalfactorRussia-Ukraine conflict・Decreased demand in Europe

New business・ Made Normeca Asia Co., Ltd.(trading
company specializing in equipment fordisaster medicine) a wholly-owned
subsidiary◆Assumed Exchange rate:

USD=¥115, EUR=¥130

We assume the exchange rate higher than the approximate rate.
10/30

Forecasts of consolidated earnings for FY3/23/Comparing profit and loss by year
Sales and Operating profit are forecasted to increase from FY3/22.
Dividends per share will be ￥70 based on the profit-loss situation andour dividend's policy.

（Unit：￥100M）

FY3/22
Results

FY3/23
Forecasts

Year-on-yearchanges

Net Sales

508

550

+42

Operating profit

26（5.2%）

27（4.9%）+１（△0.3%）

Ordinary profit

31

28

△3

Profit attributable toowners of parent

19

19

△0

Exchange rate EUR/JPY

USD/JPY

109.90129.91

115
130

5.10
0.09

Dividends per share

￥70

￥70

11/30

Forecasts of consolidated earnings for FY3/23/The factors affecting changes in ordinary profit
Increased raw material price is forecasted to be offset by increased production andcost reduction, and the operating profit is forecasted to increase year on year.
Ordinary profit is forecasted to decrease because of a drop in foreign exchange
gains that was recorded in FY3/22.
Cost reduction（Including passing theincreased raw material prices
on to product prices）（Unit：￥100M）

40

+13

31

20

△14

0

raw
material
price
2021年度実績

FY3/22
Results

原材料△1

Non-operating
income(Fluctuation of
exchange rate andothers)△1
R&D andothers

減価償却費

△3

+3

Depreciation

1028

Increased
production30

試験研究費他

増産影響

原価低減

Ordinary profit:△300 million yen

営業外

FY3/23
Forecast
12/30

Forecasts of consolidated earnings for FY3/23/Capital investment・Depreciation・R&D expenses
Capital investment: Mainly for rationalization of production and R&D in Japan, andfor increased production in overseas. Also, focus on theinvestments for DX and environmental investment which
contribute to the reduction of CO₂ emissions.
R&D expenses: Actively allocate to differentiating existing products &developing new products and business.
（Unit：￥100M）

FY3/21Results

FY3/22
Results(a)

FY3/23
Forecasts(b)

Changes(b-a)

Capitalinvestment

26

28

49

＋21

Depreciation

41

42

43

＋1

R&D expenses

16

18

19

＋1

Ratio of R&D
expenses to sales

3.6％

3.5％

3.4％
13/30

1. Consolidated financial results for FY3/22
2. Forecasts of consolidated earnings for FY3/23
3. Management strategy【Reference】 Company profile

14/30

Management
strategy/Business
Ｔｈｅ
Ｎｅｘｔ
ＮＰＲ ２０３０environment

Politics

Economy・Exhaust gas regulations（CO2 issues)・Money tightening
・Inflation

・Reform workstyles
・Trade friction between
US ＆ china
・Energy issue◆Contribute toenvironment◆Cost down

・ESG investment
・Job creation

Society◆Technical solution

・Carbon-free society◆Global support

・Respect forhuman rights
・Natural disaster・New normal (Covid-19
pandemic)

Technology
・Conversion toelectric vehicles

・CASE
・Digital transformation(cloud/IoT/AI)
15/30

Management strategy/Automobile industry

Vehicles equipped with internal combustion engine (ICE) are decreasing, andcomposition of power train is changing.
In response to global warming and energy issues, introduction of newenvironmental regulations and movement for electrification of mobility isgetting faster.
Demand for vehicles is forecasted to increase mainly in emerging countries.
On the other hand, hydrogen fueled internal combustion engine and e-fuelengine has been developing, and ICE has still possibilities as one of the
choice for next-generation mobility.

Long-term vision
Mid-Term Management Plan
16/30

Management strategy/Long-term Vision・Mid-Term Management Plan
Formulated the 8th Mid-Term Management Plan
based on ”The Next NPR” 2030 as our long-term vision.
The 8th Mid-Term
Management Plan
(FY3/22-FY3/24)＜Management target＞

The Next NPR 2030
（Long-term vision）

54 billion yen or more

100 billion yen or more

Income Margin

8% or more

10％ or more

Percentage Net Sales
from Non-automobile
Engine Sales

15% or more

40％ or more

Net sales
Operating＜Environmental target＞

CO2 Emissions（Compared to FY3/2014）

△25％

△46％
17/30

Management strategy/The 8th Mid-Term Management Plan

“Change as Chance”~Finding opportunities within change~【Priority Measures】(1) Build an overall optimized product manufacturing system(2) Promote technical solution proposal-oriented sales through utilizing
the core technologies and products(3) Strengthen the development and creation of new products and business(4) Conduct structural reforms of people and organizations (awarenessreforms)(5) Take a leap forward toward becoming a sustainable company【Action Guidelines】
New 5S

Speed
Speed of responding to changes
Skill
Skill for planning and carrying out strategies
Science Taking decisions scientifically based on data
SpiritEnthusiasm to want to improve the organization
SafetyA safe and secure working environment and safety
awareness
18/25

Management strategy/Specific activities
Based on the trend in the automobile industry, we will focus on
the following three points to achieve the targets of the long-term
vision and mid-term management plan.
①Strengthening profitability in the existing business(Automobile engine）

・Providing high-quality internal-combustion engine parts that comply withenvironmental regulations
・Expanding sales in emerging markets through utilizing NPR core technologies②Growing and establishing new product business(Non-automobile engine）
・Progressing medical device business steadily
・Promptly establishing new products and business as a profitable business
utilizing M&A and open innovation③Promoting sustainability management
・Working toward carbon neutrality
・Contributing to SDGs
19/30

Management strategy/Strengthening profitability
in the existing business (1)1) Comparison of well-to-wheel CO₂ emissions

Well to Wheel CO2 (g/km)

120

CO₂ emissions fromEV power generation（Runout of energy-mix)

CO₂ emissions from HEV

Regulation in 2025
81g/km100
80★Current
Toyota PRIUS
73.4g/km
More CO₂ emissions can be

60

reduced by using e-fuel,methanation and hydrogen

40
20
0

2014

2019

2030

Renewable energy ratio 13％

18％

38％

Fuel efficiency Fuel efficiency

40％

50％

◇ Aiming for thermal efficiency of over 50% in HEV engines(HEV is competitive with EV in well-to-wheel CO₂ emissions.
Continue to monitor CO₂ emissions in life cycle assessment）◇ E-fuel and hydrogen engines are being developing toward
carbon neutrality.
20/30

Management strategy/Strengthening profitability
in the existing business (2)2) Providing solutions to achieve “over 50% thermal efficiency rates”
SolutionsIssuesTechnologies

Piston ring
Reducelubrication oil
consumption,
Reduce friction

・Low µ coating・Higher dimensional
accuracy
・Improve sealing
performance
・Visualization
technique・Advanced design
・MBD

Valve seat insert
Thermal management
Increase tumble ratio

Sales activities

・High thermal conductive
materials・coating
・Improve design flexibility
・MBD

Promote the proposal-based sales
approachContribute to customer’s engine developments by providing our
21/30
technologies differentiating from those of other companies.

Management strategy/Strengthening profitability
in the existing business (3)3) Expanding sales in emerging markets through utilizing
NPR core technologies
・Expanding share in emerging markets
that have growth potential
In emerging countries such as India and Africa, the spreadof electric vehicles is uncertain, and expansion of internal
combustion engine vehicles is expected to continue for thetime being. We aim to expand sales utilizing NPR’s
environmental technologies.

・Expanding share inlarge size commercial vehicles business

Large size commercial vehicles are expected to be equipped withdiesel engines for the time being because there are many issues
in electrification of them. Especially in China, we acquired a lot ofbusinesses in commercial vehicles.

・Expanding aftermarket businessWe expect that high demand of engine aftermarket will maintaindespite of conversion of new cars to electric vehicles.
We aim to expand shares in North America, Central America,and Africa through enhancing recognition of NPR brand.
22/30

Management strategy/Growing and establishing new product business (1)Medical device business
The annual sales of global medical device market in 2022 is
projected to reach about USD 500 billion.
The market is expanding because of aging population in developed countries
and economic growth in emerging countries.

(USD100M)
7,000

Leading manufactures

6,000

Overseas・Medtronic（America・Ireland）
・Johnson and Johnson (America）
・Abbott（America）
・PHILIPS（Nederland）

5,000
4,000
3,000
2,000

Domestic・Olympus・FUJI FILM・Cannon
・TERUMO

1,000
0
2016

2017

2018

2019

2020

2021e 2022e 2023e 2024e 2025e 2026e

Source: Statista, IMF, OECD, WHO, Financial Statements of Key Players,
National statistical offices

23/30

Management strategy/Growing and establishing new product business (2)The annual sales of global neurostimulation device market in 2022
is projected to reach about USD 4 billion.
Benefit：Home treatment become available, quality of patients' life will
improve, and continuous monitor become available
60(USD100M)

CAGR: 8.69%

40
20

20

21

21

23

25

27

30

33

36

40

45

50

0
2013 2014 2015 2016 2017 2018e 2019e 2020e 2021e 2022e 2023e 2024e
Source：Statista estimates” Estimated total global neurostimulation devices market from 2013 to 2024”■NPR product NiFreeT products (Ti-Ta alloy）
shape-memorizing alloy and nickel free・Biocompatibility is high, and can be implanted within thebody[Dental screw]・Its hardness is close to human bones, and impact on thehuman body is low
・As it is non-magnetic, can be used with MRI[Guidewire]
・Visibility with X-ray is high and can be used as a

[Stimulator
electrode][Catheter marker]

radiation treatment marker
・Inexpensive compared to the precision metal used for
medical equipment(Platinum)⇒NiFreeT can be used for neurostimulation devices[Catheter[Radiation treatment marker]
reinforcing
material](Mainly for the prostate)

24/30

Management strategy/Growing and establishing new product business (3)〈Strategy for entering medical device market〉 Internal

resource■Promote joint developments with major medical
device manufacturer
External
resource■Hold more joint researches and developmentswith universities
Cause the acceleration of■Acquire new business by M&A and create synergies commercialization speed

TOPIC

NORMECA ASIA CO., LTD. which is a supplier of

medical equipment became subsidiary of NPR groupin January, 2022

Advantage of Aim to increase
sales of nonNPR
automobile

・Product development
capability
・Technical capability
・Manufacturing
capability
・Sales capability

Advantage of
Normeca・Wealth of knowledge
engine business about
disaster medical care
・Diverse base of customer

Protective suits
developed based on
customer needs

Emergency air tent
for disaster and medical connected
negative pressure machine・High quality & wide
variety of products

Temporary clinic of
Otsuchi Hospital in Iwate prefecture which
25/30
damaged by the Great East Japan Earthquake

Management strategy/Growing and establishing new product business (4)Electrification /Robot business

Motor business

Utilizing METAMOLD (metal powder
injection molding parts) ‘s superiority interms of the degree of freedom for shaping
and use of materials, we are aiming todevelop business for CASE-related parts,
the robots, and sensors. Also, we areproposing 3D laminate modeling.

An axial gap motor with 3D
shape compressed powder core

SCARA robot deflectors for ball screws

Electric Power Steering (EPS)
deflectors for ball screws

It is suitable for in-wheel
motors.

■Applications to be assumed
・Electric cart
・Wheeled chair・Transfer/Agricultural robot
・powered exoskeleton, etc.

Outside diameter：Φ180mm

Height：78.5mm
Weight：5.5kg

26/30

Management strategy/Promoting sustainability management (1)Nippon Piston Ring

Ring the Future ～for a sustainable future～

Co-existing withthe global
地球環境との共生
environment

Contributing to the

製品を通じた環境貢献
environment
through
事業活動における環境貢献
products
Contributing to theenvironment inbusiness activities

Co-existing withstakeholders

ステークホルダーとの共生

Improving customer
お客様満足度向上
satisfaction
従業員の安全と健康
Employee health andダイバーシティの実現
safetyRealizing diversity

Building afoundation for
持続的な成長のためのsustainable growth

基盤醸成

Respecting human
人権尊重
rightsコーポレートガバナンス
Corporate governanceコンプライアンスの遵守
Compliance

27/30

Management strategy/Promoting sustainability management (2)Contributing to the environment in business activities＜Activities under consideration＞＜Activities conducted＞

・Introduced of “innovative
production lines”

・Sift to energy-saving/high-efficiency
equipment

・Reused the exhaust heate.g.)Replace cupola with electric
induction furnace, make coolingwater pomp inverter controlled

・Switched to LED lightening
・Utilized project of “Carbon credit ”

・Introduce power purchase agreement,purchase renewable energy power, etc.

CO2 Emissions in domestic facilities

Reduction（Compared to

FY2013）

FY2030

FY2022
ResultFY3/2023
TargetLong-term
visionFY2050~

▲27%

▲25％
(※3)

▲46%

Carbon neutral(※2)(※2)Calculated with the emission factor of FY2013(※3)The target of FY3/23 will be reviewed

28/30

Management strategy/Promoting sustainability management (3)Improving customer satisfaction
Received "Excellence of quality control award"
from TOYOTA MOTAR CORPORATION
Received "Excellence of quality award" from Mazda Motor Corporation

Employee health and safety
Recognized "Certified Health & Productivity Management

TOPIC

Organization 2022"

Rated Bronze by EcoVadis insustainability assessment※EcoVadis：The international sustainability rating agency
headquartered in France. This company rates the sustainability ofover 75,000 supplier companies across 160 countries around theworld based on four criteria: environment, labor and humanrights, ethics, and sustainable procurement
29/30

Nippon Piston Ring

Ring the Future～for a sustainable future～[Contact]
NIPPON PISTON RING CO., LTD.
Corporate planning department
TEL: +81-48-856-5014

Notes:* The financial forecast and other descriptions of the future presented in this document are basedon currently available information and assumptions which are deemed reasonable at present.
Please note that a variety of factors could cause actual results to differ from the forecasts.
* Figures and percentages in this report are rounded to a nearest unit.

We do not permit any unauthorized duplication, unauthorized reproduction or
unauthorized copying.
30/30

[Reference] Company profile

Date ofestablishment
Head office

December 20, 1934
5-12-10, Honmachi-Higashi, Chuo-ku, Saitama City,
Saitama, JAPAN

Capital9,839 million yen

Net sales

Consolidated：50.8 billion yen
Non-consolidated：33.1 billion yen

Number of
employees

Consolidated:3,027
Non-consolidated：678

NPR group

14 companies（Domestic：4, Overseas：10）(FY2021)(End of March 2022）

Domestic：Tokyo・Nagoya・Osaka・Hiroshima・

Sales bases
Manufacturing
bases

Fukuoka・Sendai
Overseas：USA・Germany・China・Indonesia・Thailand・Singapore・Malaysia・India

Domestic：Tochigi・Iwate・Fukushima
Overseas：USA・China・Indonesia・Thailand・India
Reference
31/251/5

[Reference] Company profile / Product configuration

Automobile engine business■Piston ring

■Valve seat insert

Global share top5

Top share for Japanese
automobile manufactures

50％ of net sales

20％ of net sales■Assembled
sintered camshaft■Parts forstrengthening bearings

Top share for SUBARU
5％ of net sales

2％ of net sales

Non-automobile engine business■Piston ring formarine engine■METAMOLDFor MAN・MITSUI E&S

For JTEKT・THK

Medical equipment

RV products

3％ of net sales

Metal powder injection
molding parts

Dental implants

Brand products fromhome and abroad■Medical care products ■Others

32/33
Reference 2/5

[Reference] Company profile / Domestic bases
NPR IWATE
CO.,Ltd.(Ichinoseki）

Nippon Piston
Ring CO.,Ltd.
Tochigi Plant
Composite camshafts
Piston rings for marine
engine, etc.

NPR IWATE
CO.,Ltd.(Senmaya ）Steel and cast ironpiston rings

Cast iron piston rings

Ｒ＆Ｄセンター３

Medical Device Center

Ichinoseki, Iware Pref.

Senmaya, Iwate Pref.
Kawamata, Fukushima Pref.

Nogi, Tochigi Pref.
Saitama, Saitama Pref.

Distribution Center
Nogi Branch Plant

Nippon Piston
Ring CO.,Ltd.
Headquarters

R&D Center 1

NPR FUKUSHIMAWORKS CO.,Ltd.
Valve seat inserts,
cylinder liners

Reference
3/5
33/25

[Reference] Company profile / Overseas bases

Europe・Asia
Germany Indonesia
China

Singapore

Korea

Malaysia

ThailandIndia

17 bases in 9 countries
The ratio of overseas
sales:60％
Overseas employees:
1,500North America
Kentucky Michigan
Detroit Los Angeles
Minneapolis

Reference 4/5

[Reference] Company profile / Main customers
Japan

Overseas

Reference
5/5
35/25