November 6, 20192019/11/6

NTN Corporation

1

Contents
Ⅰ. Outline andInitiatives of “DRIVE NTN100”
Ⅱ. Financial Results for First Half andForecast for FY2019• This presentation and comments made in this conference or during the following Q&A session include forward-looking
statements about future performance and future business strategies, all of which are based on decisions of the managementof the Company currently available.
• 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 these statements 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.

2019/11/6

2

Trends in consolidated financial results:
Results of 1H and Full year Forecast (1)1H Sales:Demand decreased in aftermarket, industrial machinery, automotive business and in nearly all regions.
Decreased in sales a year-on-year.
Incomes: Decreased due to the impact of a large decline in volume, despite cost reductions mainly in fixed cost.
Full-year forecast: Revised the earnings downward considering current demand. Improve profitability and cash flow. Dividends decreased.

FY2019 1H Result

Operating Margin

in brackets are FY2018 1H results

1H
Result（billion yen）

Full year
forecast

Net Sales: ¥334.5 billion (¥370.2 billion)
YoY-9.6%, Excl. exchange rate effect -7.1%（billion yen）

Operating Income: ¥4.5 billion (¥15.4 billion)
YoY-70.8%, Excl. exchange rate effect -64.4%

Net Income: ¥1.1 billion (¥8.1 billion)
YoY-86.1%

Interim dividend: ¥5

FY2019 Full year Forecast
in brackets are FY2018 full year results

Net Sales: ¥680.0 billion (¥733.6 billion)
YoY-7.3%, Excl. exchange rate effect -4.7%

Operating Income: ¥10.0 billion (¥26.9 billion)
YoY-62.9%, Excl. Exchange rate effect -53.5%

Net Income: ¥0.5 billion
Incl. extraordinary loss ¥4.5 billion(No revise from the previous announcement)

Annual dividend: ¥10 * year-end ¥5(forecast)

2019/11/6

Note: Net Income: Net Income attributable to shareholders
FY2019 2H exchange rate: US$1=107 yen(Unchanged), €1=125 yen (Unchanged)

3

Trends in consolidated financial results:
Results of 1H and Full year Forecast (2)1st Half Result(compared with forecast at 1Q)
FY2019 1H Result ():Previous Forecast
Net Sales: 334.5 billion yen(340.0 billion yen）

Operating income: 4.5 billion yen(6.0 billion yen)

Net income: 1.1 billion yen (1.0 billion yen)Interim dividend：5 yen (7.5yen)① Demand decreased more than expected at 1Q
Economic conditions deteriorated due to trade friction and the uncertainires in Europe
・Aftermarket: Economic conditions deteriorated. Distributors adjusted inventories
・Industrial machinery: Demand declined mainly for construction machinery,
agricultural machinery, and gearboxes.
・Automobile：Demand and production volume decreased in Japan, U.S,
Europe, Asia and China② Reduced inventory assets compared to the end of June,
but FCF decreased due to decrease of sales and volume
Inventory cuts progressed compared to the end of June, but sales and volume
declined significantly. FCF decreased more than expected at initial forecast to
negative. (FCF 1H:-4.6 billion yen)

2nd Half Focus Points
FY2019 full year forecast ():Previous Forecast
Net Sales: 680.0 billion yen(690.0 billion yen）

Operating Income: 10.0 billion yen(15.0 billion yen)

Net income: 0.5 billion yen (3.0 billion yen)
year-end dividend: 5 yen (7.5yen)① Short-term: Continue urgent measures to improve profitability
Continue to reduce fixed cost of expenses and personnel expenses.
Further pricing policy and profit improvement through resource redistribution② Short-and medium-term: Promote major theme to generate FCFs
Variable Cost Reformation: Reduce procurement costs globally.
Utilizing overseas OEM products
Production reforms: Implementation of production reforms from Japan,
significant reduction in inventory assets
Business reorganization: Accelerate domestic manufacturing reorganization,
concentrate on high value-added products.
Review of unprofitable businesses in Japan andoverseas.
Assets sales: Promote sales of strategic shareholdings

Improve the management base to prepare for next recovery in demand

2019/11/6

4

Financial Summary of Aftermarket Business1st Half: Sales decreased due to global economic slowdown, inventory adjustments by distributor,
lower sales in regions other than China. Income decreased due to decline of volume
Net sales and operating margin for aftermarket business

FY2019 1H Result (): FY2018 1H results
Net Sales: 56.0 billion yen(61.1 billion yen）
Operating income: 6.7 billion yen(7.8 billion yen）
Operating margin: 11.9％ (12.8%)(billion yen)

FY2019 full year forecast (): FY2018 results
Net Sales: 115.0 billion yen(118.8 billion yen）
Operating income: 13.5 billion yen(15.2 billion yen)
Operating margin: 11.7％ (12.8％)

Point：Implement initiatives to expand sales globally① Supply and Demand：Improve capacity to provide highprofitable & representative products
Expand OEM supply by utilizing more suppliers overseas
Supply products from plants overseas globally⇒Establish stable supply system andprevent opportunity loss

2019/11/6

CAGR+4.8%(Volume, 9Yrs)② Profit: Promote pricing policy
Reflect increased cost of material and logistic in price.
Improve profitability③ Improve branding
Continue to enhance service
Strengthen brand value by conducting measuresagainst counterfeit products5Financial Summary of Industrial Machinery Business1st Half: Sales decreased in almost all of sectors, including construction machinery,
agricultural machinery, gearboxes, and machine tool. Income decreased due to decline in volume
Net sales and operating margin for industrial machinery business

FY2019 1H Result (): FY2018 1H results
Net Sales: 53.9 billion yen(62.0 billion yen）
Operating income: -1.1 billion yen(1.6 billion yen）
Operating margin: -2.1％ (2.6%)

FY2019 full year forecast (): FY2018 results(billion yen)

CAGR+5.1%(Volume , 9Yrs)

Net Sales: 107.5 billion yen(123.4 billion yen）
Operating income: -2.0 billion yen(3.1 billion yen)
Operating margin: -1.9％ (2.5％)

Points: Short term initiatives to improve profit in core products,
medium and long term initiatives to strengthen competitiveness② Medium term: Strengthen competitiveness by① Short term: Profit improvement
CVJ forindustrial
improving
in
cost
and
MIX
improvement
by pricing policies
machinery
Improve valuable cost by using new suppliers overseas
Reflect increased cost of material andExpand sales of high-competitive productlogistic in price.
In addition, expand sales of products in new areas(Service, solution,
Stop selling unprofitable products andredistribution of resources to profitable customers Robot related）

2019/11/6「CMS」「i-WRISTTM」

6

Financial Summary of Automotive Business1st Half: Sales decreased as automobile production decreased due to trade friction and uncertainties inpolicies. Income decreased due to decline in volume
Net sales and operating margin for automotive business

FY2019 1H Result ():FY2018 1H results
Net Sales: 224.6 billion yen(247.2 billion yen）
Operating income: -1.0 billion yen(5.9 billion yen）
Operating margin: -0.5％ (2.4%)(billion yen)

FY2019 full year forecast (): FY2018 results
Net Sales: 457.5 billion yen(491.3 billion yen）
Operating income: -1.5 billion yen(8.7 billion yen)
Operating margin: -0.3％ (1.8％)

CAGR+5.0%(Volume , 9Yrs)

Point: Short term initiatives to improve profitability andmedium to long term initiatives for structural reform of profit① Short term: Pricing policy & cost reduction
Reflect cost of steel material and custom andduties of U.S in price
Stop selling or cost improvement of unprofitableproduct and change prices
Improve logistics between business sites andcost reduction in back-office department

2019/11/6② Medium to long term: Improve earning power inbusiness areas we focus on
Conduct sales and investment initiatives areas from thepoint of business type
Expand volume to increase income
Enhance earning power which does not depend on thevolume by procurement and production reform7

Automotive Business: Medium to Long Term Initiatives
for Structural Reform of Profitability
Medium to Long term Initiatives
for Structural Reform of Profitability
１．Make profit in main business area
Select expanding target and centralize resourceby considering business type and region
２．Expand sales of high-value added products
preparing for electrification and EV shift
３．Re-strengthen the core function which make profit
Price X Sales(Price) X Procurement(valuable cost)X Manufacturing(Process)

Product × Region

Pricing PoliyProcurement

Manufacturing

Car Pro.
+13%←Until today
Grow up more thanautomotive production

Sales
+13%

From now→
Expand volume to gain
profit and improvement

Reference)IHS ,NTN forecast

Gross
Margin+3.8ptReference)IHS ,NTN forecast（indexing volume trend）

CVJ/Driveshafts
Profit: Meet demand for EV and SUVs expanding sales
Volume: Gain volume in ASEAN andother developing countries
Hub bearing
Profit: Large size vehicle in U.S, EV in Europe,
procurement and production reform
Volume: Break out from certain customer,
improve profitability for low share customer

2019/11/6

Bearing
TargetProfit: Focus on high functional application
related to electrification
Volume: Gain volume effect by reforming
and centralize production8

Outline of Medium-term Management Plan
“DRIVE NTN100”
Initiatives for Realizing Our Vision“DRIVE NTN100” (April, 2018-March, 2021)
Accelerating Initiatives in the Next 3 Years
towards target 10 years later

NTN in 10 years

Points
1. Develop in new areas and grow up sustainably bycore technology and product
2.Focus on strengthening management base which
support business within 3 years①Valuable cost reformation②Structural reform for man-hour and resource
Smart manufacturing, (utilize IoT, AI and Robot)
Robotization in back office dept. (introduce RPA)
③Enhance SCM and concentrated investment
Use new core IT system, efficient stock management
and shortening LT, intensively invest high value added
products

2019/11/6

For more details of “DRIVE NTN100”, please refer to:9
https://www.ntnglobal.com/en/investors/pdf/findata/mtermplan2018.pdf

“DRIVE NTN100” Industrial Machinery Business
Progress of Strengthen Core Technology & Products/Develop Business in New Areas
Ongoing Initiatives for "DRIVE NTN100"
1. Develop Core Technology and Highperformance Product2. New Business Area : Robot Related &Service, Solution Business1．Develop Core Technology and Highperformance ProductTarget：become a company
that customers rely on most
Response to changes in environment
・Utilization of IoT and AI in industry
・Demand increased in robot related
business
・Prevention by monitoring
2-b．New business area：Service, Solution BusinessBusiness of monitoring service

Develop unique technology and products
Sensor Integrated Bearing Unit

Preventing seizing with advanced
condition monitoring of machine tool
Adopting heat flow sensor which has 40
times rate of increase compared totemperature and vibration sensor andrealize advanced monitoring⇒Contribute to productibility and cost

CMS for wind turbine

Expand sales od condition monitoring
system for wind turbine
Promote contract of monitoring service
Differentiate with CMS technology⇒By Industry-academia collaboration,
predict operating life wih AI⇒Deploy to automobile(CASE) andmachine tool“Sensor Integrated Bearing Unit” for Machine Tool Spindles

2-a．New business area：Robot-related Business
Develop automation system using Wrist Joint Module
Use CVJ technology, operating
angle 90°
Labor saving and quality
improvement in production line
when applied in appearance
inspection→Strengthening collaboration
with SIer in the future

2019/11/6

i-WRISTTM

Example of Appearance
Inspection system

Portable Vibroscope

Vibroscope for bearings utilizing
bearing diagnosis and vibration
analysis
Provide diagnosis service utilizing
analysis technology for bearings

10

“DRIVE NTN100” Automotive Business
Strengthen Core Technology & Products/Progress in New Areas
Ongoing Initiatives for "DRIVE NTN100"

Target：become a essential company to provide
products and service in the global market

1. Strengthen core technologies and products：
Become the world's top maker of drive-train systems(including EVs)
2. Develop businesses in new areas:
Respond to electrification and EVs

Response to changes in environment

・CASE(electrification, EVs etc.)
・Increase of production number of
new vehicle(increase of population)

２．Develop businesses in new areas:
Respond to electrification and EVs
Realize Super Low friction in drive-train system

1.Strengthen Core Technology & productRespond to electrification

Module product for
next generation vehicle

eHUB: HUB Bearing with
Motor Generator Function

Low Friction Hub Bearing Ⅲ

Start mass production ofElectric Motors and Actuators

Develop grease pursuing low friction
Reduce rotational friction by 62% keeping its durability
Contribute to improved fuel efficiency by 0.53%

For electrification of pump andaccessory
Promote the business for massproduction

Receive production order of ULTAGE Tapered
Roller Bearing

Expand core products for EV

Received 2017 "CHO" MONODZUKURI Innovative Parts andComponent Award, Automotive Components AwardsHUB: HUB with steering
assist function. Propose it for
front but also rear steering
Received 2019 "CHO" MONODZUKURI Innovative
Parts and Component Award, Nippon Brand Award

Supply samples to customer and promote
initiatives to make them practicalLow friction & torque, high rigidity & efficiency products
Current & New EV maker adopt the products

World's highest standard high-load capacity androtation speed
1.3-times basic dynamic load rating
2.5-times or more bearing rated life

2019/11/6

Become Top manufacturer of drive-train system

11

Initiatives for ESG
NTN is working on ESG issues through the implementation of its corporate philosophy, contributing to the realizationof a sustainable society

Environmental
 Develop innovative technologies,
products, and services
 Reduce environmental burdens
 Prevent global warming
Quantify “eco-friendly product index”
Visualizing environmental valueof products

S-eco makes
highestcontribution toenvironment⇒ today's products reduce annual
CO2 emissions by approximately
1,400,000 tons compared to the
products in 20 years ago

GovernanceSocial Social contribution activities
 Coexistence with local communities Work style reform“NTN
Rotating
School” heldin Japan andoverseas Strengthen and enhance corporate
governance Risk management
 Promote compliance

Supporting activity in disaster area
utilizing natural energy products“N3 N-CUBE,” Container TypeTransportable Independent
Power Supply, provide
electricity

ESG meeting forinvestors(in Oct. 2019）

Promote workstyle with diversity
Promote telework system
Participated in Telework days 2019
Gain "Kurumin" mark as a child care
support company

Change of company systemtransition to company with nominating
comitee, etc from June 2019

Responding to social issues

Adopted in the SRI indices

UN Global Compact Ten principles in four areas: human rights,
labor, environment, and anti-corruption

Promote the disclosure of ESG information

Sustainable Development Goals (SDGs) Business activities in consideration of SDGs
NTN is selected in the ESG indices adopted by the GPIF

2019/11/6

For More details, please refer to “NTN Report 2019”https://www.ntnglobal.com/en/investors/annual.html

12Key Management Indicators of “DRIVE NTN100”
FY2017

DRIVE NTN100
FY2019FY2020

Forecast

TargetResults

FY2018Results

Net Sales\744.4 billion\733.6 billion\680.0 billion\800.0 billion

Operating Income\39.6 billion\26.9 billion\10.0 billion\57.0 billion

Operating Margin

5.3%

3.7%

1.5%

7.1%

Net Income\20.4 billion-\7.0 billion\0.5 billion\30.0 billion

Capital expenditure\37.6 billion\45.2 billion\50.0 billion\170.0 billion/3 years(incl. intangible \20.0 billion）

FCF\13.4 billion-\22.4 billion

4.1 times

3.8

4.0

4.5 times

0.9

1.2

1.3

1.0 or less

Equity to capital ratio

30.2%

27.4%

25.9%

30％ or more

ROE

8.4%

-2.9%

0.2%

10.0％ or more

NTN-ROI*

5.7%

3.8%

1.4%

7.5％ or more

Dividends

¥15.0

¥15.0

¥10.0

\15.0 or more

USD

¥110.8¥110.9¥108.0¥110Euro¥129.6¥128.4¥120.7¥115

Inventory turnover ratio
Net D/E ratio

Exchange rates\0.0 billion \45.0 billion/3 years*NTN-ROI = Net operating income after tax / (Inventories + tangible fixed assets)**Exchange rates: Figures described in FY2019 Forecast is average (2H: USD=\107、Euro=\120）2019/11/6

13

Contents
Ⅰ. Outline andInitiatives of “DRIVE NTN100”
Ⅱ. Financial Results for First Half andForecast for FY2019

2019/11/6

14

Contents★ Financial Results for FY2019 First Half :Key Factors & Full Year Forecast
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
６．Net Sales and Operating Income by Company Location(1) Japan, Americas(2) Europe, Asia and others
７．Inventories
８．Capital Expenditure and Depreciation
９．Interest-Bearing Debt
１０．Cash Flows

2019/11/6

15

Financial Results for the First Half of FY2019 : Key Factors
Results of FY2019 Second Quarter(April, 2019-September, 2019)◇Net Sales： ¥334.5 billion
・Decrease of ¥35.7 billion, year-on-year(Excluding exchange rates: Decrease of ¥26.4 billion)◇Operating Income： ¥4.5 billion
・Decrease of ¥10.9 billion, year-on-year（Excluding exchange rates : Decrease of ¥9.9 billion)◇Ordinary Income： ¥2.8 billion
・ Decrease of ¥9.7 billion year-on-year(Excluding exchange rates: Decrease of ¥8.7 billion)◇Net income attributable to shareholder(parent company)： ¥1.1 billion
・Decrease of ¥7.0 billion, year-on-year(Excluding exchange rates: Decrease of ¥6.2 billion)◇Free Cash Flow： -¥4.6 billion, Increase of ¥4.7 billion, year-on-year
2019/11/6

16

Full Year Forecast for FY2019

Revised FY2019 Full year forecast◇Net Sales： ¥680.0 billion
Decrease of ¥10.0 billion compared with previous announcement (¥690.0 billion)◇Operating income： ¥10.0 billion
Decrease of ¥5.0 billion compared with previous announcement (¥15.0 billion)◇Extraordinary losses： ¥4.5 billion
No revise from the previous announcement◇Net income attributable to Shareholder (parent company)： ¥0.5 billion
Decrease of ¥2.5 billion compared with previous announcement (¥3.0 billion)◇In regards to dividends, the Company plans ¥10 for this fiscal year
Decrease of ¥5 from the previous announcement(¥5 of both an interim dividend and year-end dividend)◇Exchange-rate form the third quarter：
1USD = ¥107 (previous announcement, ¥107)
1EURO = ¥120 (previous announcement, ¥120)
2019/11/6

17

1. Consolidated Statements of Operation(billion yen)
FY2018

1H

2H

Year on year

FY2019Full year

1H

Full year

FY2019 1H②-①

Results Results Results Results Forecast
①

②

Total

Excl.Forex

Forex

Net sales

370.2

363.4

733.6

334.5

680.0

-35.7

-26.4

-9.3

Operatingincome

15.4

11.6

26.9

4.5

10.0

-10.9

-9.9

-1.0

Operatingmargin

(4.2% )

(3.2% )

(3.7% )

(1.3% )

(1.5% )(-2.8% )Ordinary income

12.6

9.7

22.2

2.8

6.0

-9.7

-8.7

-1.0

Extraordinary
income/loss

-

-19.3

-19.3

-0.7

-4.5

-0.7

-

-

Net income
attributable toshareholder

8.1

-15.1

-7.0

1.1

0.5

-7.0

-6.2

-0.8

US＄

110.3

111.5

110.9

108.6

107.8

-1.6

EURO

129.9

126.9

128.4

121.4

120.7

-8.4

Exchangerate

2019/11/6

18

2. Net Sales by Region(billion yen)
FY2018FY20191H

2H

Full year

Results

Results

Results①

1H

Year on year

Full year

FY2019 1H②-①

Results Forecast
②

Total

Excl.Forex

Forex

Japan

102.3

105.0

207.2

100.1

204.0

-2.2

-2.2

-

Americas

100.4

101.1

201.5

90.6

182.5

-9.8

-8.0

-1.7

Europe

85.5

82.3

167.8

72.2

147.0

-13.3

-8.3

-5.0

Asia andothers

82.0

75.0

157.0

71.5

146.5

-10.5

-7.9

-2.5

Total

370.2

363.4

733.6

334.5

680.0

-35.7

-26.4

-9.3

2019/11/6

19

3. Net Sales and Operating Income by Business Sector(billion yen)

＜Net Sales by Business Sector＞
FY2018FY20191H

2H

Full Year

Results

Results

Results①

1H

Year on year

Full year

FY2019 1H②-①

Results Forecast
②

Total

Excl.Forex

Forex

Aftermarket

61.1

57.8

118.8

56.0

115.0

-5.1

-3.2

-1.8

Industrial
machinery

62.0

61.4

123.4

53.9

107.5

-8.1

-6.6

-1.4

Automotive

247.2

244.2

491.3

224.6

457.5

-22.5

-16.5

-6.0

Total

370.2

363.4

733.6

334.5

680.0

-35.7

-26.4

-9.3

＜Operating Income by Business Sector＞
FY2018FY20191H

2H

Full Year

Results

Results

Results①

1H

Year on year

Full year

Results Forecast②

FY2019 1H②-①

Aftermarket

7.8

7.3

15.2

6.7

13.5

-1.2

Industrial
machinery

1.6

1.5

3.1

-1.1

-2.0

-2.8

Automotive

5.9

2.8

8.7

-1.0

-1.5

-6.9

Total

15.4

11.6

26.9

4.5

10.0

-10.9

2019/11/6

20

4. Results by Business Sector （Quarterly Trend）＊All figures in billion yen.
Automotive
200.0
180.0
160.0
140.0

189.2

Industrial machinery
20.0

②-①

181.0 181.9 181.5

30.5282 0
0
28.2
30.6
### 0
0
0
0
0
31.2
12130.80 30.5
0

29.6
31.0

171.7
28.2
28.2

120.0

Aftermarket

13.4%

12.3%

13.1%

12.3%

11.8% 12.0%

18.0

0
162.8

0

0
0
27.8
0

16.0

0
0
14.0
0

25.7

12.0
10.0

3.7%

3.6%

1.7%

0

1.0%

2.1%

0
0 1.0%
0

0

2.6%

0
0
1.2%
0

0.1%
-1.1%

-1.1%
-3.2%

9.9

100.0

8.0

4.1

80.0
6.0
60.0

127.5

119.6

123.3

120.9

115.3

109.3

40.0

5.4

3.8

3.5

1.1
4.0
2.0

20.0

5.5

4.7

0.5

1.2

0.0

1.3

6.2
3.9

3.1

1.4

0.7 0.8

3.3

3.3

1.5

0.1
-0.3

0.0

FY20181Q

2019/11/6-2.0

FY2019
2Q

3Q

4Q

1Q

2Q

FY2018

1Q

-1.2
-0.8

FY2019

2Q

3Q

4Q

1Q

2Q

21

5-1. Analysis of Operating Income （FY2019 1H ）＊All figures in billion yen.

Positive factors（ 6.5 ）
Decrease in
expenses etc.
(Depreciation 0.4,
other 2.9)
Decreasein personal
2.8
costs

Decrease invariable costs
0.4

Negative factors（ 17.4 ）

3.3

Scale
effects
16.1

-10.9

FY20181H
Operatingincome15.4

FY2018 1H < Results >vs
FY2019 1H < Results >2019/11/6

Sales priceExchange
level
rates
0.3
1.0
FY20191H
Operatingincome4.522

5-2. Analysis of Operating Income （FY2019 Full year ）＊All figures in billion yen.

Positive factors（11.7）
Decrease in expenses etc.
(Depreciation -1.1, other 5.7)
Decrease in
4.5
variable
costs
Decrease in
2.9
personal costs
4.3

-16.9

Negative factors（28.7）

Scale
effects
23.8

Sales pricelevel
Exchange
rates
2.3

FY2018Full year
Operatingincome26.9

2.5

FY2018 Full year < Results >vs
FY2019 Full year < Forecast >2019/11/6

FY2019Full year
Operatingincome10.0

23

6. Net Sales and Operating Income by Company Location＊All figures in billion yen《 Japan 》《 Americas 》
Net Sales

Net Sales
200.0

174.8

178.3

150.0

168.2

150.0
100.0

98.9

99.4

FY20181H

FY2018
2H

88.8

100.0
50.0
50.0

0.0

FY20181H

FY20182H

FY20191H

0.0

Operating Income

Operating Income

6.0

6.0

0.2%

0.2%

-1.0%
3.0

3.0
0.0

0.4

0.3

FY20181H

2019/11/6

FY2018
2H

2.6

1.7%
-2.3%

1.7

0.0

-1.7

-3.0

2.7%

FY20191H

FY2019
1H

-2.0

-3.0
FY20181H

FY20182H

FY20191H

24

6. Net Sales and Operating Income by Company Location＊All figures in billion yen《 Europe 》
Net Sales《 Asia and others 》
Net Sales《 欧州 》

150.0

100.0

150.0

93.8

90.2

79.7

50.0

0.0

《 アジア他 》

100.0

80.9

74.7

70.1

FY20181H

FY20182H

FY2019
1H

9.9%

9.1%

50.0

FY20181H

FY20182H

FY20191H

0.0

Operating Income

Operating Income

2.5

15.0

1.5
0.5
-0.5

2019/11/6

0.5%

0.5%

0.5

0.5

FY20181H

FY2018
2H

-0.1%

10.0

12.1%

9.8
7.4

6.4

5.0

-0.1
FY20191H

0.0

FY20181H

FY20182H

FY20191H

25

7. Inventories
Overseas

4.1

Inventory turnover ratio

4.0

4.0

3.8

3.7

3.8

Inventories(billion yen)

250.0
200.0

179.7

188.9

197.3

201.0

194.5

4.0
3.5

3.5

197.4

192.9

3.0
170.0

150.0
100.0

123.5

128.9

135.2

137.1

132.9

132.7

2.0

130.5
114.5

1.0
50.0
56.2

60.0

62.1

63.9

61.6

64.7

62.4

55.5

FY2017 4Q
Results

FY2018 1Q
Results

FY2018 2Q
Results

FY2018 3Q
Results

FY2018 4Q
Results

FY2019 1Q
Results

FY2019 2Q
Results

FY2019Forecast

0.0

Inventory turnover ratio(times)

Japan
300.0

0.0

(billion yen)

FY2017 4Q FY2018 1Q FY2018 2Q FY2018 3Q FY2018 4Q FY2019 1Q FY2019 2Q
Results
Results
Results
Results
Results
Results
Results

179.7(Overseas) (123.5)(Japan) (56.2)
Inventory turnover ratio
4.1(times)Inventories

2019/11/6

188.9(128.9)(60.0)
4.0

197.3(135.2)(62.1)
3.8

201.0(137.1)(63.9)
3.7

194.5(132.9)(61.6)
3.8

197.4(132.7)(64.7)
3.5

192.9(130.5)(62.4)
3.5

FY2019Forecast

170.0(114.5)(55.5)
4.026

8. Capital Expenditure and Depreciation(billion yen)

Investment(Japan)

Depreciation(Japan)

Investment(Overseas)

Depreciation(Overseas)

60.0

60.0

50.0
40.5

33.8
30.0

22.1
12.9
9.1

0.0

25.7
19.1

19.5

13.6

19.7

19.2

13.2

11.8

6.9

6.3

7.4

FY2017 2H Results

FY2018 1H Results

11.9

11.4

25.0

18.3

14.3
12.2

22.8

20.2

30.0

27.2

11.8

15.5

7.9

6.5

FY2018 2H Results

FY2019 1H Results

FY2019 Forecast

0.0(billion yen)

Capital expenditure(Overseas)(Japan)FY20172H Results
22.1(12.9)(9.1)

FY2018
1H Results①
2H Results
19.5
25.7
(13.2)(14.3)(6.3)(11.4)FY20191H Results②※33.8(13.6)(20.2)

②-①
14.4
(0.4)
(14.0)FY2019Forecast
50.0(22.8)(27.2)※In addition, ¥4.7 billion of intangible fixed assets

Depreciation(Overseas)(Japan)

2019/11/6

FY20172H Results
19.1(12.2)(6.9)

FY2018
1H Results①
2H Results
19.2
19.7
(11.8)(11.9)(7.4)(7.9)

FY20191H Results②
18.3(11.8)
(6.5)

②-①
-0.9
(0.0)
(-0.9)FY2019Forecast
40.5(25.0)(15.5)

27

9. Interest-Bearing Debt
Japan

Overseas

Net D/E ratio

Interest-bearing debt
(billion yen)

1.2
500.0

400.0
300.0

1.2

1.3

1.3

1.1
0.9

1.0

1.0
340.4

350.1

350.3

351.5

348.8

358.0

320.8

329.6

87.8

91.1

94.2

92.3

99.1

102.3

100.8

100.0

1.0

0.5

200.0
100.0

233.0

238.4

246.2

257.8

251.2

249.2

247.9

258.0

FY2017 4Q
Results

FY2018 1Q
Results

FY2018 2Q
Results

FY2018 3Q
Results

FY2018 4Q
Results

FY2019 1Q
Results

FY2019 2Q
Results

FY2019Forecast

0.0

Net D/E ratio

600.0

0.0
(billion yen)

FY2017
4Q
Results

FY2018
1Q
Results

FY20182Q
Results

FY20183Q
Results

FY20184Q
Results

FY20191Q
Results

FY20192Q
Results

FY2019Forecast

320.8
329.6
340.4
350.1
350.3
351.5
348.8
358.0
(Overseas) (87.8)(91.1) (94.2) (92.3) (99.1) (102.3) (100.8) (100.0)(Japan) (233.0) (238.4) (246.2) (257.8) (251.2) (249.2) (247.9) (258.0)
Net Interest-bearing
234.7
244.0
252.7
267.0
266.9
268.6
273.2
272.0
debt

Interest-bearing debt

2019/11/6

28

10. Cash FlowsFY2018FY2019FY2019FY20172H Results 1H Results① 2H Results 1H Results② Forecast
29.6
17.1
26.1
22.1
53.0

(billion yen)
Ⅰ．Cash flow fromoperating activities

②－①

4.9

Ⅱ．Cash flow frominvesting activities

-28.4

-26.4

-39.2

-26.6

-53.0

-0.3

Ⅰ+Ⅱ．Net cash flow

1.2

-9.3

-13.1

-4.6

0.0

4.7

Ⅲ．Cash flow fromfinancing activities

-2.2

11.8

8.9

-2.3

3.3

-14.1

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

0.2

-0.9

-0.0

-1.1

-0.8

-0.2

Ⅴ．Net increase in cash andcash equivalents

-0.8

1.6

-4.2

-7.9

2.5

-9.5

80.0
60.0
40.0

CF from operating activities

29.6

20.0

1.2

0.0

26.1

17.1
-9.3

-28.4

Net CF

53.0

22.1
0.0

-20.0
-40.0

CF from investing activities

-13.1

-26.4

-4.6
-26.6

-39.2

-60.0

-53.0

-80.0
FY20172H Results

2019/11/6

FY2018
1H Result

FY20182H Results

FY20191H Results

FY2019Forecast

29

DRIVENTN100Digitalization, Resources, Innovation, Variable cost reformation, Efficiency improvement
NTN Transformation for New 100years

2019/11/630

(Reference) Aftermarket Business :Result for the First Half and Forecast for the Second Half
＜Results for FY2019 1st Half (compared with FY2018 1st Half)＞

Net Sales: 56.0 billion yen(-8.3%), Operating income: 6.7 billion yen(-15.2%)･Sales decreased in industrial aftermarket due to decline in global economy and sales for distributors decreased
except Asia and others･Sales in automotive aftermarket decreased due to the inventory adjustment of distributors and slowdown ineconomy mainly in Europe
Operating margin＜Forecast for FY2019 2nd Half (compared with FY2018 2nd Half)＞

Japan

-12％

Net Sales(billion yen)

2019/11/6

-3％

-2％

+14％

-8%

-5％

±0％

+15％

Demand decreased for repair parts for machine tool
bearing. Sales reduced from distributors

Sales increased due to the system enhancement in
Americas Latin America and expanding sales activity for
auto parts in distributors network

EuropeSales decreased due to decease in industrial machinery,automobile and inventory adjustment for distributors

Asiaand others

Sales increased in industrial machinery andautomotive application mainly in Chine due tostable demand

Note: % in the bar graph represents year-on-year changes excluding exchange rates

31

(Reference) Industrial machinery Business :Result for the First Half and Forecast for the Second Half
＜Results for FY2019 1st Half (compared with FY2018 1st Half)＞

Net Sales:53.9 billion yen(-13.0%),Operating income:-1.1 billion yen
・Due to U.S-China Trade friction, sales decreased for construction machinery and gear boxes
・Sales for wind turbines increased in China but sales decreased in Americas which has uncertainty and inEurope where the government reduced the payout
Net Sales(billion yen)

＜Forecast for FY2019 2nd Half (compared with FY2018 2nd Half)＞
Operating margin

-4％

-9％

-15％

-17％

-12%

-15％

2019/11/6

Japan

Although sales increased in railway vehicles oragricultural machinery but sales decreased
construction machinery and gearboxes

Americas

Sales decreased due to decreased sales forconstruction machinery, wind turbine and gearboxes

EuropeSales increased in aircraft and railway vehicles but
sales totally decreased for wind turbines, gearboxes,
constructional machineryAsia
and others

Sales increased for wind turbine in China but
sales totally decreased for gearboxes andconstruction machinery

-14％

-1％

Note: % in the bar graph represents year-on-year changes excluding exchange rates

32

(Reference) Automotive Business :Result for the First Half and Forecast for the Second Half
＜Results for FY2019 1st Half (compared with FY2018 1st Half)＞
Net Sales:224.6 billion yen(-9.1%),Operating income:-1.0 billion yen
・Sales decreased due to the delayed recovery caused by WLTP in Europe and sanctions against Iran・Sales decreased in China due to slowdown in economy because of U.S-China trade friction and new emission regulations

Net Sales(billion yen)

＜Forecast for FY2019 2nd Half (compared with FY2018 2nd Half)＞
Operating marginJapan

2019/11/6

+1％

+2％

-8％

-7％

-10%

-1％

-12％

-2%

Automotive production decreased but sales slightly
increased because new and existing model sales well

SUV & Pick-up track models sales well but sales
Americas totally decreased due to end of main model
production and decreased sales of Sedan

EuropeSales slightly decreased due to decreased demandcaused by uncertainties in European economy andprolonged sanctions against IranAsia
and others

Sales slightly decreased due to slowdown ofIndian economy, decreased demand of export fromASEAN to Europe, U.S-China trade friction andnew emission regulations

Note: % in the bar graph represents year-on-year changes excluding exchange rates

33