November 5, 2015

NTN Corporation

Contents
Ⅰ. Progress of Medium-term Management
Plan “NTN 100”
Ⅱ. Financial Results for First Half andForecast for FY2015• 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 currentlyavailable. 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.

2015/11/5

2

Contents
Ⅰ. Progress of Medium-term Management
Plan “NTN 100”
Ⅱ. Financial Results for First Half andForecast for FY2015

2015/11/5

3

Changes in Consolidated Financial Results forFY2015 First Half and FY2015 Forecast＊All figures in 100 million yen

IncomeNet sales

FY2016 First Half (Results)
Net sales:
360.8 billion yenOperating income: 24.8 billion yen
Operating margin: 6.9％
Ordinary income: 18.0 billion yen*
Net income:10.4 billion yen
First-half dividend: 5 yen* The subsidiaries in the emerging
countries recognized foreign exchange
losses (non-operating expenses) due toweakened own currencies.
FY2015 (Forecast)
Net sales:
725.0 billion yen
Operating income: 50.0 billion yen
Operating margin: 6.9%
Ordinary income
45.0 billion yen
Net income:31.0 billion yen
Year-end dividend: 10 yen
Exchange rate for FY2015 second half
has been changed from 1US$=110 yen
to 1US$=115 yen (no change for EUROfrom 1 EURO=130 yen).

GA 20132015/11/5

Revival 2014

NTN 100

Exchange rate for FY2015 first half (actual): 1US$=121.9 yen, 1EURO=135.1 yen
4
FY2015 net income graph indicates Net income attributable to shareholder (parent company).

Results and Forecast for
the Aftermarket Business<Results for FY2015 1st Half (compared with FY2014 1st Half)>

Net sales: 58.3 billion yen (+6.6%), Operating income: 9.5 billion yen (+6.7%)
・Mobile technical services for MRO were successfully provided in Japan and Asia,
despite the low performance of the resources-related business in Americas.
・Sales system strengthened in North America.
・Planned performance goals were unattained due to the economic slowdown in South America and China.
Operating margin

Net sales(100 millionyen)<Forecast for FY2015 2nd Half (compared with FY2015 1st Half)>

Japan

Will remain flat due to the strengthened
mobile technical services, despite thedemand slowdown in the certain sectors.

Will exploit new customers in cooperation
with major distributors. Sales for automotive
Americas aftermarket will increase as a result ofbroadened product lineup.

2015/11/5EuropeWill increase sales to Western European
distributors. Will exploit new demands inEastern Europe, Russia and other regions.

Asia andOthers

Will reinforce the organization to expand
MRO projects.
Will expand sales to targeted customers.

5

Results and Forecast for
the Industrial Machinery Business<Results for FY2015 1st Half (compared with FY2014 1st Half)>

Net sales: 52.8 billion yen (+0.4%), Operating income: 3.6 billion yen (+67.2%)
・Construction and mining machineries decreased in Japan, and HDD-related demand lowered in Asia.
・Wind turbine increased but construction machinery decreased in Americas.
And wind turbine and aircraft increased in Europe.
・Planned performance goals were unattained due to the low performance of construction machinery,reducers, and agricultural machinery.
<Forecast for FY2015 2nd Half (compared with FY2015 1st Half)>
Net sales(100 millionyen)

Operating margin

Japan

Will remains flat due to the slowdown in demandfor construction machinery andreducers for construction machinery.

Demand will grow reflecting increased earlyAmericas spring demand for agricultural machinery.
Demand for wind turbines will remain steady.

EuropeDemand for aircraft and agricultural machinerywill increase.
Demand for wind turbines will decrease
due to seasonal factors.

Asia and Demand for rolling stocks will increase.
Demand for wind turbine will decrease
Othersdue to seasonal factors.
2015/11/5

6

Results and Forecast for
the Automotive Business<Results for FY2015 1st Half (compared with FY2014 1st Half)>

Net sales: 249.6 billion yen (+9.1%), Operating income: 11.7 billion yen (+62.8%)
・Sales for North America increased in Japan and Americas against a backdrop of
steady automotive demand in North America.
・In Europe, sales increased thanks to recovery of the new car market in Western Europe.
And New projects contributed to the sales growth in China.
・Planned performance goals were unattained as a consequence of the decrease inproduction volume, except in Europe.
<Forecast for FY2015 2nd Half (compared with FY2015 1st Half)>
Operating margin

Net sales(100 millionyen)

Japan

Sales will increase due to positive trends forexports to customers and transfer of
production to Japan.

Demand in North American market will remain
Americas strong.
Positive trends for SUVs and pickup trucks.

EuropeRecovery in Western European market
will continue.
Influence for Volkswagen will be insignificant.
Demand for China will increase due to mass

Asia and production reflecting new projects.
Others
Production will be gradually recovering in Asia.
2015/11/5

7

Progress of “NTN 100”(1):Net Sales and Operating Income
3-year plan for “NTN100”
Plan

Net sales(100 millionyen)

4,930

2.496
Results

1,245

1,075

583

528

47%

49%

Aftermarket

232

Industrial Machinery Automotive

Operatingincome (100million yen)

95
41%

51%

6336

205

117
57%

57 %
Aftermarket

2015/11/5

Industrial Machinery Automotive8

Progress of “NTN 100” (2):Manage Growth Expand of the Aftermarket Business
Major Measures and Progress
1. Strengthening of the on-demand delivery system:
Enhance product lineup and shortening lead-time

・ Development of the inventory replenishment system for
globally general-purpose products in each region→For FY2015 first half, the system was introduced to China,
in addition to Japan, Americas, Europe and Asia
・ Strengthening the on-demand delivery system by expanding inventories ofstandard and semi-standard products

2. Expansion of MRO sales: Reinforcement of user support
・ Expand local technical support system for customers
・ More flexible services through agencies as one team

3. Approaches to the target markets:

Growth in auto parts in Americas
Despite the Influence for the economic
slowdown in South America,
automotive aftermarket expanded.

Globally focused・ Product category: Broadened the world-highest “ULTAGE” series lineup

・ Business category:Sales expansion through technical services
・ Market: Expand sales for automotive aftermarket
through expanded auto parts lineup

2015/11/5

Quickly and accurately
meet customer needs

9Progress of “NTN 100” (3):ManageStructural Reform of the Driveshaft BusinessProfitability
Major Measures and Progress
1. Expansion of profit of the Driveshaft Business・ Flexibly responded to local production and demand change
・ Improved sales prices and reduced proportional costs
・ New orders for SUVs and premium cars increased
2. Reinforcement of global quality control andsupply systems

Profit ratio of AutomotiveBusiness(100millionyen)

・ “Xiangyang NTN,” the third production sites in China, started
production in April.
・ Production of driveshaft will start in February 2016 in Mexico.

3. Development of series of next-generation driveshaftmodules
・ Promoted reduction in weight and use of common parts andwith “ADS modules”
・ Released “lightweight driveshaft for FR vehicle“for premium cars
30% lighter forthe exclusive useof FR

2015/11/5

Diagram of ADS modules

10Progress of “NTN 100” (4):ManageFoundation
Strengthen of the Financial Foundation
Major Measures and Progress
1. Improvement of asset efficiency
・ Reduction of interest-bearing debt: Reduced 18.5 billion yen for FY2015 first half
(FY2015 goal: reduction of 20.1 billion yen)・ Inventory reduction: 7.2 billion increased during FY2015 first half(continually increase aftermarket inventory and reduce other inventories)

・ Capital expenditures: 18.6 billion yen made for FY2015 first half(FY2015 plan: 50.0 billion yen) after review of timing and details
・ Asset sales: Sold less promising assets⇒FCF：10.2 billion yen for FY2015 first half (FY2015 goal: 17.9 billion yen)
⇒Equity to capital ratio: 29.6% (FY2015 goal: 30%)⇒Net D/E ratio: 1.1 (FY2015 goal: 1.0)
⇒ROE： 8.4％ (FY2015 goal: 12％)

2. Improvement of net income to net sales
・ Strengthened lowering of proportional costs, cost reduction
and strengthening suppression of depreciation⇒Operating margin: 6.9% for FY2015 first half (FY2015 goal: 6.9%)

3. Return to shareholders

・ For FY2015 first half, dividend of 5 yen declared as planned(FY2015 plan: 10 yen; estimated dividend payout ratio of 17%)2015/11/5

11

Contents
Ⅰ. Progress of Medium-term Management
Plan “NTN 100”
Ⅱ. Financial Results for First Half andForecast for FY2015

2015/11/5

12

Ⅱ. Financial Results for First Halfand Forecast for FY2015
November 5, 2015NTN Corporation• 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.

2015/11/5

13

Contents★Financial Results for the First Half of FY2015
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
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
2015/11/5

14

Financial Results for the First Half of FY2015 : Key Factors

FY2015 1H Results◇ Net sales was 360.8 billion yen, a 24.5 billion yen (+7.3%) increase year-on-year
・Aftermarket increased chiefly in Japan and Asia,with approximately 7% increase year-on-year
・Industrial machinery was flat year-on-year due to decrease in Japan and Asia,and increase in Europe and China.
・Automotive increased mainly in Japan, Europe and China,
with approximately 9% increase year-on-year◇ Operating income was 24.8 billion yen, a 6.6 billion yen (+35.9%) increase year-on-year◇ Ordinary income was 18.0 billion yen, a 1.3 billion yen (+8.1%) increase year-on-year
The subsidiaries In the emerging countries recognized foreign exchange losses (4.9 billion yen)
due to weakened own currencies.
◇ Net income attributable to shareholder (parent company):10.4 billion yen,a 1.1 billion yen(+12.1%) increase year on year

FY2015 Full year Forecast◇ Full year forecast remains unchanged◇ Exchange rate for 2nd half has been changed from 1US$=110 yen to 1US$=115 yen,no change for EURO from 1 EURO=130 yen
2015/11/5

15

1. Consolidated Statements of Operation
100 million yen
1H

Results

FY2014
2H
Results①1HFY2015

Full year
Results

Results

Full yearPlan②③④

Year on year
FY20141H③－①

Net sales

3,362

3,657

7,019

3,608

7,250

245

Operatingincome183256439

248

500

66

Operatingmargin

(5.4%)(7.0%)(6.2%)(6.9%)(6.9%)(1.4%)

Ordinary income

167

222

389

180

450

13

Extraordinary
income/loss- 24

6- 1801024

Net income*

93141234

104

310

11

US＄

103.0

116.7

109.8

121.9

110.0

18.9

EURO

138.9

138.5

138.7

135.1

130.0

- 3.8

Exchangerate* FY2015 net income indicates the net income for the year attributed to parent company shareholders.

2015/11/516

2. Net Sales by Region＜Net Sales by Region＞(100 million yen)

FY2014FY2015

Year on year
FY2015 1H③-①
VolumeForex

1HResults①2H
Results

Full year
Results②1H
Results③

Full year
Plan
④

Japan

942

972

1,915

946

1,940

40

Americas

955

1,071

2,026

1,082

2,130

- 20

146

Europe

840

872

1,712

847

1,650

27- 21

Asia &others

625

741

1,367

733

1,530

3077

Total

3,362

3,657

7,019

3,608

7,250

42203

2015/11/5

17

3. Net Sales and Operating Income by Business Sector＜Net Sales by Business Sector＞(100 million yen)

1H

FY20142H

Full year

Results

Results

Results①②FY2015
1H
Full year
ResultsPlan③④

Year on year
FY2015 1H③-①
Volume Forex

Aftermarket

548

577

1,124

583

1,245

1323

Industrial
machinery

526

564

1,090

528

1,075

- 23

25

2,289
2,516
4,805
Total
3,362
3,657
7,019
＜Operating Income by Business Sector＞

2,496
3,608

4,930
7,250

5342155
203

Automotive

1H

Results

FY2014
2H
Results①
Aftermarket
Industrial
machinery

Automotive
Total
2015/11/5

Full year

Results②(100 million yen)
FY2015
1H
Full yearResultsPlan
③④89
21103
41192
6395
36232
6372
183

111
256

184
439

117248205
500

Year on year
FY2015 1HResults③-①

614456618

4. Results by Business Sector （Quarterly Trend）＊All figures in 100 million yen
Automotive

Net Sales

2,000
1,800
1,600

1,887
1,670 1,692
267

280

1,769

296

281
295

1,400
1,200

Industrial machinery

259

268

269

200

1,828
290
268

1,780

180

294

160

260

16.3% 16.2%

800

80

1,144

1,220

1,296

1,270

1,226

60

88

5.0%

5.5%

3.9%

4450

463537FY20141Q

2Q0535326

191089520

2015/11/5

3.8%

111

200

2Q

6.6%

145 141

134Q FY2015
1Q

7.0%

3.2%

93Q

14.4%

3.1%

40

FY20142Q
1Q

18.0% 18.2%

4.7% 5.6% 8.9%

400

0

17.8%

3.4%

120
100

1,145

Operating Income/ Operating Margin

140

1,000

600

Aftermarket

1715
46
3Q

4265

69

4Q

FY2015
1Q

48
2Q
19

5. Analysis of Operating Income （FY2015 1H）＊All figures in 100 million yen.

Positivefactors（ 136 ）
Decrease invariable costs
Scale merits

Exchange rates

58

Negativefactors（ 70 ）

31493729

Sales price levels
Increase in personal costs
Expenses etc.
(Depreciation +16,3Other –19)

+66
FY2015
1H
Operatingincome

FY2014
1H
OperatingIncome
183248FY2014 1H < Results >vsFY2015 1H < Results >2015/11/520

6. Net Sales and Operating Income by Region《 Americas 》《 Japan 》(100 million yen)

Net Sales
2,000

1,666

1,767

1,690

1,500

(100 million yen)

Net Sales
1,500

1,000

937

1,052

1,066

FY20142H

FY2015
1H

1,000
500
500

00
FY2014
1H

FY20142H

FY2015
1H

Operating Income
200

7.1%

Operating Income

8.9%

8.1%

150

10080601005002015/11/5118FY2014
1H

FY2014
1H157136
FY2015
1H

1.3%

2.3%

114244020
FY20142H

0.1%0FY2014
1H

FY20142H

FY2015
1H

21

6. Net Sales and Operating Income by Region《 Europe 》(100 million yen)

Net Sales
1,500

1,000

《 Asia & Others 》
1,500920

952917

1,000

610
5000

FY2014
1H

FY20142H

FY20151H

01008080

1.2%

400

2015/11/5744

2.8%
2611FY2014
1H

FY2014
1H

FY20142H

FY2015
1H

Operating Income

10020719

500

Operating Income

60(100 million yen)

Net Sales

FY20142H

1.4%6.4%

FY2015
1H

8.6%

6164

FY2014
2HFY2015
1H6040

13

8.6%

20039
FY2014
1H22

7. Inventories
Inventories at end of September 2015 increased by -4.7 billion yen compared
to end of June (+0.1billion yen if excluding exchange rates).
Inventories(100 million yen)

3.8

3.9

Overseas

3.7

2,250

1,665

1,718

1,799

1,140

1,158

1,243

3.5

Inventory turnover ratio (times)

3.8

1,970

1,841

1,396

1,285

3.8

4.0

1,913

1,820

1,321

1,302

3.7
1,960

-47

1,500
1,354

750

3.0
2.01.052504.0560556574556606592518

FY2013 4Q FY2014 1Q FY2014 2Q FY2014 3Q FY2014 4Q FY2015 1Q FY2015 2Q FY2015
Results
Results
Results
Results
Results
Results
Results
Forecast

0.0

Inventory turnover ratio (times)

Japan

3,000

(100 million yen)
FY2013
4Q
Results

FY2014
1Q
Results

FY2014
2Q
Results

FY2014
3Q
Results

FY2014
4Q
Results

FY2015
1Q
Results

FY2015
2Q
Results

Inventories
1,665 1,718 1,799 1,970 1,841 1,960 1,913
Overseas (1,140) (1,158) (1,243) (1,396) (1,285) (1,354) (1,321)
Japan (525)(560) (556) (574) (556) (606) (592)Inventory turnover ratio(times)2015/11/5

3.8

3.9

3.7

3.5

3.8

3.7

3.8

FY2015
Forecast

1,820(1,302)
(518)
4.0
23

8. Interest-Bearing Debt
Interest-bearing debt at end of September 2015 increased by -3.3 billion yen
compared to end of June.
6,000

1.3

1.3

5,000

Overseas

net DE ratio

1.4

1.2

1.2

4,000

3,818

3,719

3,784

3,864

3,000

1,427

1,374

1,445

1,537

1.1 1.0
3,591
1,281-33

1.1

1.01.03,4393,406

3,390

1,220

1,2081,1832,000
1,00001.2

Net D/E ratio (％）

Interest- bearing debt
(100 million yen)Japan

0.80.60.42,3912,3452,3402,3282,3102,2192,1982,207

FY2013 4Q FY2014 1Q FY2014 2Q FY2014 3Q FY2014 4Q FY2015 1Q FY2015 2Q FY2015
Results
Results
Results
Results
Results
Results
Results
Forecast

0.20.0(100 million yen)

FY2013
4Q
Results

FY2014
1Q
Results

FY2014
2Q
Results

FY2014
3Q
Results

FY2014
4Q
Results

FY2015
1Q
Results

FY2015
2Q
Results

FY2015
Forecast3,818 3,719 3,784 3,864 3,591 3,439 3,406 3,390
Overseas (1,427) (1,374) (1,445) (1,537) (1,281) (1,220) (1,208) (1,183)
Japan (2,391) (2,345) (2,340) (2,328) (2,310) (2,219) (2,198) (2,207)

Interest-bearing debt

Net Interest-bearing
debt

2015/11/5

2,521

2,688

2,673

2,794

2,713

2,663

2,613

2,56124

9. Capital Expenditure and Depreciation
Capital investment in FY2015 1H results was within the scope of depreciation
expenses.
Investment（Japan）

Investment（Overseas）

Depreciation（Japan）Depreciation（Overseas）

30030060050020414915011510643019312821118411812911618638719012513361571503352623008788

FY 2013 2H Results

41758269

FY 2014 1H Results

FY 2014 2H Results

1650

FY 2015 1H Results

126

FY 2015
Full year Forecast0(100 million yen)

Capital expenditure

OverseasJapan

Depreciation

OverseasJapan

2015/11/5

FY2013
2H Results

FY2014
1H Results

FY2014
2H Results

FY2015
1H Results

FY2015
Forecast

FY2013
2H Results

FY2014
1H Results

FY2014
2H Results

FY2015
1H Results

FY2015
Forecast

149(106)(43)
204(115)(88)

128(87)(41)

193(118)(75)

184(116)(69)

211(129)(82)

186(125)
(61)
190
(133)
(57)

500(335)(165)
387(262)(126)25

10. Cash Flows(100 million yen)

FY2013
2H Results

FY2014
1H Results

FY2014
2H Results

FY2015
1H Results

FY2015
Forecast

Ⅰ．Cash flow from operating
activities

300

57

194

291

670

Ⅱ．Cash flow from investing
activities

-158

-145

-168

-189-491

Ⅲ．Cash flow from financing
activities-15-98-276-212-244

10

1

1726-14137-185-234-85-79

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

Ⅴ．Net increase in cash andcash equivalents
700500

CF from operating activities

CF from investing activities

Net CF291

300

300

1421001945710226670179

△ 100

△ 300
△ 500

2015/11/5- 158
FY2013 2H
Results- 145 - 88
FY2014 1H
Results- 168
FY2014 2H
Results- 189
FY2015 1HResults- 491
FY2015
Forecast26

2015/11/527