2030 Long-Term Management
Plan
Beyond ceramics, eXceeding imagination
June 4 th 2020
NGK SPARK PLUG CO., LTD.
President and COO Takeshi Kawai

Index

1. A Review of “NITTOKU SHINKARON-Evolution of NGK SPARK PLUG"
2. Ideal image: 2040 VISION of NGK SPARK PLUG
3. 2030 Long-Term Management Plan
The Strategy and Initiatives① Strategy and Overall Picture ofLong-Term Management Plan
② Specific measures③ Summary

4. Reference materials
NGK SPARK PLUG CO., LTD. All Rights Reserved1Index

1. A Review of “NITTOKU SHINKARON-Evolution of NGK SPARK PLUG"
2. Ideal image: 2040 VISION of NGK SPARK PLUG
3. 2030 Long-Term Management Plan
The Strategy and Initiatives① Strategy and Overall Picture ofLong-Term Management Plan
② Specific measures③ Summary

4. Reference materials
NGK SPARK PLUG CO., LTD. All Rights Reserved2

1. A Review of “NITTOKU SHINKARON –the Evolution of NGK SPARK PLUG"

A Review of “NITTOKU SHINKARON

We have been carrying out our goal of providing the real value.

Overview of Long Term Management Plan “NITTOKU SHINKARON”

NGK SPARK PLUG CO., LTD. All Rights Reserved31. A Review of “NITTOKU SHINKARON –the Evolution of NGK SPARK PLUG"

A Review of “NITTOKU SHINKARON” –figures and progress

We have made a lot of progress in 10 years.
FY 2010・・・・・

FY 2018

FY 2019

Net Sales

269 Billions yen

425 Billions yen

426 Billions yen

Operating income

29 Billions yen

58 Billions yen

46 Billions yen

Operating margin

10.7%

13.7％

10.9%

Average of Past 5year OP margin per
year

7.7%

15.9%

14.5%

Points of evolution

Monozukuri Company

Highly Profitable Company• Spark Plugs sales establishing of its top-brandstatus• Top Share of Exhaust Gas Sensors Market• Average operating margin of 5 years are 15%• Increased overseas production ratio (30→40%)• Start of RHQ and strengthen the Group

Progressive Company

Human Asset Company• Active discussions and strengthening governance,
including outside directors• StrategicM&A, established a joint venture.

• Established the Nittoku Way, shares the values
that all employees rely on and pass them on to
the next generation(WELLS, JAPAN MDM, NTK CERATEC, CAIRE, MORIMURA SOFC TECHNOLOGY)NGK SPARK PLUG CO., LTD. All Rights Reserved4

1. A Review of “NITTOKU SHINKARON –the Evolution of NGK SPARK PLUG"

Progress of Medium-Term Management Plan

Strengthening of current business fields have been progressed
as planned.
Creation of New businesses pillars is delayed.
Strengthening
Current
Businesses◎• Selective andfocused.

• Grow stronger asplanned.

NGK SPARK PLUG CO., LTD. All Rights Reserved

Establishing
New Business Pillars△• Seedings of new
business has
progressed.
• Creation of new
business pillars not yetachieved.

Establishing Strong
Business Infrastructures△• Made & promoted
Nittoku Way.
• Promoting awarenessreform.
• ROIC Management is
on a half way.

5Index

1. A Review of “NITTOKU SHINKARON-Evolution of NGK SPARK PLUG"
2. Ideal image: 2040 VISION of NGK SPARK PLUG
3. 2030 Long-Term Management Plan
The Strategy and Initiatives① Strategy and Overall Picture ofLong-Term Management Plan
② Specific measures③ Summary

4. Reference materials
NGK SPARK PLUG CO., LTD. All Rights Reserved

62. Ideal image: 2040 VISION of NGK SPARK PLUG

2040 VISION: Change drastically beyond the current way

Delivering new value in the face of an ever-changing future.

To meet large-scale global environmental changes, we too must change.
Creating an organization comprised of passionate individuals working together
to face challenges head-on in order to better society.
We are transcending imagination with technology that transcends boundaries.
We are more than just ceramics and we are going in new directions.

NGK SPARK PLUG CO., LTD. All Rights Reserved7

2. Ideal image: 2040 VISION of NGK SPARK PLUG

2040 Ideal image and 2030 Long-Term Management Plan

Direction = 2040 VISION
Milestone =2030 Long-Term Management Plan “NITTOKU BX”(2030strategies and initiatives up to the year)

NGK SPARK PLUG CO., LTD. All Rights Reserved8Index

1. A Review of “NITTOKU SHINKARON-Evolution of NGK SPARK PLUG"
2. Ideal image: 2040 VISION of NGK SPARK PLUG
3. 2030 Long-Term Management Plan
The Strategy and Initiatives① Strategy and Overall Picture ofLong-Term Management Plan
② Specific measures③ Summary

4. Reference materials
NGK SPARK PLUG CO., LTD. All Rights Reserved

93.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture

Background: The impact of changes in the external business environment

Internal combustion engines are expected to decline
in the mid-2030s.
Millions

Millions

Equippedwith ICE

Number of new vehicle sales in the world*four‐wheeled vehicle

Number of owned vehicles in the world*four‐wheeled vehicle

Source:based on IHS Automotive Market “Future of Mobility and Energy" and adding our forecast
NGK SPARK PLUG CO., LTD. All Rights Reserved

103.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture2030 Long-Term Management Plan: Business Portfolio

Realizing for “Business Portfolio Transformation” and “Stable
growth” based on profits from the ICE related business
ICE related

Non-ICE related

426 Billions yen

40%

60%

18%
82%

60%

40%

2020
2020

2030

2040
2040

NGK SPARK PLUG CO., LTD. All Rights Reserved

2030

11

3.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture

Financial Strategy
Cash out from FY2020 to FY2029

Sales portfolio（Cash flow basis）

1%
17%

10%

30%
82%

Automotive related
Business
Growth Business60%

FY 2019

Automotive
related Business

Shareholders
return

25%

25%

20%

New Business

FY 2029

M&A
and R&DFY 2019

FY 2029*

Operatingmargin10.9 %

15 % or more

ROIC

6.2 ％

10 ％ or more

ROE

7.7 %

12 % or more

10%

25%

20%

GrowthBusiness

New Business*Target which was discussed before
the COVID-19.

Secure profits while trying tochange the portfolio.
NGK SPARK PLUG CO., LTD. All Rights Reserved

Actively allocate investment in
new and growth businesses.
12

3.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture2030 Long-Term Management Plan and Mid-Term PlanNGK SPARK PLUG CO., LTD. All Rights Reserved

133.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture

Action Guidelines: Change with Will!!

We will become a company that coexists with the worldand society with diverse human resources with Will.

NGK SPARK PLUG CO., LTD. All Rights Reserved

14

3.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture

Business fields to focus on
Our core competence to support sustainable growth in the future society

Environment & Energy

Mobility

Our Core competence

SomethingNew

MedicalNGK SPARK PLUG CO., LTD. All Rights Reserved-Ceramic material-Application technology inharsh environments-Disparate material
bonding technology-Sensing Technology-Rapid high temperature
heating technology-Global network

Open
Innovation

Communication

15

3.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture

Business fields to focus on: details

Environment & Energy

Mobility

To an energy efficient and environmentally To a mobile society that is fun
friendly society
and convenient• Providing maintenance services• Using sensing technology
improving industrial
efficiency• Stable supply of regenerated
energyaccording to your lifestyle• Improving electricity byceramic components• MaaS Providing services
to fit special needs

MedicalCommunication

To bring advanced medical care
to people all over the world

A high-speed communication society
where virtual and reality are connected• Applied ceramic materials
to artificial bone
• Non-invasive diagnosis
and treatment, provisionof preventive equipment
and services using
ultrasound technology

NGK SPARK PLUG CO., LTD. All Rights Reserved• Supporting high-speed
communication,
provision of
infrastructure parts

16

3.2030 Long-Term Management Plan - Strategy and Initiatives (1) strategy and overall picture

For Realizing a Sustainable Society

We set KPIs for each item in order to realize a society thatcan coexist with all stakeholders.

Environment• Responding to Climate Change• Providing Environmentally
Friendly ProductsSociety• Development of Technology,
Products, and Businesses forContributing to the Resolutionof Social Issues• Global Human Resource
Management

NGK SPARK PLUG CO., LTD. All Rights Reserved

Governance• Corporate Governance• Risk Management• Compliance• Information Security

17

Index

1. A Review of “NITTOKU SHINKARON-Evolution of NGK SPARK PLUG"
2. Ideal image: 2040 VISION of NGK SPARK PLUG
3. 2030 Long-Term Management Plan
The Strategy and Initiatives① Strategy and Overall Picture ofLong-Term Management Plan
② Specific measures③ Summary

4. Reference materials
NGK SPARK PLUG CO., LTD. All Rights Reserved18

3.2030

Long-Term Management Plan - Strategy and Initiatives (2) Specific Measures

Strategy: "Business Portfolio Transformation" for GrowthManagement Innovation• Small, Strong and Agile head office to support businessportfolio transformation.
• Quick management decisions. DX to support it.

Clarification of Responsibilities andAuthority• Strong authority and strict responsibilities to promote
portfolio transformation.
• Build an optimized structure and system for eachbusiness.

Willful Cultural Change• Culture reform and strengthen group.

Automotive related Business: Super efficiency, the creation of cash
Growth Business: Drastic development beyond market growth
New Business: Selecting and choosing theme and commercializing
cutting-edge themes
NGK SPARK PLUG CO., LTD. All Rights Reserved19

3.2030

Long-Term Management Plan - Strategy and Initiatives (2) Specific Measures2030 Long-Term Management Plan: Sales and Portfolio

Grow each business into a “profit pillar”.
Bubble size：sales amounts

35%
30%

Mobility

2040 2020

25%
2030

15%

MedicalOperating margin20%

10% Environment
5%

2030

2040

Communication& Energy

0%

2020

-5%
-10%
(200)

0

NGK SPARK PLUG CO., LTD. All Rights Reserved

200

400 Operating
600
800
1,000
Income

1,200

1,400
20

3.2030 Long-Term Management Plan - Strategy and Initiatives (2) Specific Measures

Management Innovation
Create a strong, small, and agile head office. Supporting to speed up
management decisions, and business portfolio transformation.
As a tool to speed up, we have invested digital infrastructures.
Organically connecting, and producing the information necessary
for management decisions that were not seen before.

Global HR
data base

Cloud

Factory
Digitization

Connecting
to each baseConference
SystemRevamped

Inventory
data base

Logistic
SystemInventory
tracking

Accounting
SystemSecurityStrengthen

NGK SPARK PLUG CO., LTD. All Rights Reserved21

3.2030 Long-term management plan

Strategy and Initiatives (2) Specific Measures

Clarification of Responsibilities and Authority

Active appointment of
external human resources

Purpose:Recruiting people suitable for a field and position
Concrete measures:
Promotion of promotion of appointment to
key positions

Adapting Achievements,
Rewards & Evaluation
System to each business

Purpose:Adapted compensation & evaluation system to each businessand secure excellent human resources.
Concrete measures:Construction of the system that is suitable for each businessChange Division System toCompany System or
Holdings

Company name change

NGK SPARK PLUG CO., LTD. All Rights Reserved

Purpose:Accelerating “Dokuritsu Jiei (take actions by oneself)”
Concrete measures:
Establishing organizational design, empowerment
according to business field
Purpose:“Break, to change" a statement of determination
Concrete measures:
Unification of Japanese and English Names
Rebuilding of a brand system, etc.
22

3.2030 Long-term management plan

Strategy and Initiatives (2) Specific Measures

Willful Cultural Change
Change the company, strengthen the group, and achieve“Change beyond recognition”.
"
 Promotion of culture reform

Change beyond
recognition• From the conservative culture to the progressive• Pursuing of “IGNITE YOUR SPIRIT”• Fostering common values and thinking optimal
for all, not a partial.

 Promotion of work style and life style reform• Promoting work outside the company,
including telecommuting• Flexibility of working hours and multiple shifts• Productivity improvement(30% improvement from FY2019)

 Promoting Diversity• Promoting Women or Foreign nationality or
Career recruitment and increase Number of managers
ratio:25% (headquarters)• Active appointment of external human resources

NGK SPARK PLUG CO., LTD. All Rights Reserved23

Index

1. A Review of “NITTOKU SHINKARON-Evolution of NGK SPARK PLUG"
2. Ideal image: 2040 VISION of NGK SPARK PLUG
3. 2030 Long-Term Management Plan
The Strategy and Initiatives① Strategy and Overall Picture ofLong-Term Management Plan
② Specific measures③ Summary

4. Reference materials
NGK SPARK PLUG CO., LTD. All Rights Reserved24

3.2030 Long-Term Management Plan - Strategy and Initiatives (3) Summary

2030 Long-Term Management Plan (summary)Business Portfolio
Transformation

Clarification of
Responsibilities andAuthority

Invest in
New Business“Change with Will”

NGK SPARK PLUG CO., LTD. All Rights Reserved25Index

1. A Review of “NITTOKU SHINKARON-Evolution of NGK SPARK PLUG"
2. Ideal image: 2040 VISION of NGK SPARK PLUG
3. 2030 Long-Term Management Plan
The Strategy and Initiatives① Strategy and Overall Picture ofLong-Term Management Plan
② Specific measures③ Summary

4. Reference materials
NGK SPARK PLUG CO., LTD. All Rights Reserved26

4. Reference materials

SDGs: Major Initiatives, Goals and Outputs
Item

Environment

Responding to Climate
ChangeProviding Environmentally
Friendly Products

Contribution to SDGs

Major Initiatives
Reduction of CO2 emissions

Dissemination and expansion of environmentallyfriendly products

Goals and Outputs
CO2 Emissions: 30% Reduction[compared to that of 2018](2030year)
Sales ratio of precious metal plugs: notless than 50%
Sales ratio of wide range oxygen sensor+ NOx Sensor : not less than 50%

Society

Development of fuel cells

CO2 Dissemination of high-efficiency
distributed power supplies with a view touse free hydrogen

Development of unleaded piezoelectric materials

Alternative promotion from leadpiezoelectric materials

Development of sensing IoT business

Improve business efficiency throughautomation, optimization, andgeneralization

Promotion of employment of women, foreign
nationals, and careers

Ratio of women, foreign nationals, andcareer recruits in managerial positions:25%

Examination of a New Personnel System

Improved results of employee
satisfaction surveys

Increasing the ratio of female and foreign
nationals to directors

Ratio of female directors and foreign
nationals: not less than 30%

Increasing the ratio of external directors

Ratio of external directors: not less than
1/3

Risk Management

Business impact analysis (creation of risk maps)
and responses

Disclosure of critical risk extraction
process and countermeasures

Compliance

Survey of employees' awareness and continuous
education

Implementation of compliancequestionnaires and disclosure of results

Information Security

Incident response organization (CSIRT)
maintenance and strengthening of the system

Strengthening activities by professional
committees

Development of Technology,
Products, and Businesses forContributing to the
Resolution of Social Issues

Global Human Resource
Management

Corporate Governance

Governance

NGK SPARK PLUG CO., LTD. All Rights Reserved

27
27

FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements concerning the future plans, strategies,
beliefs and performance of NGK Spark Plug Co., Ltd. and its subsidiaries. These forward-looking
statements are not historical facts. They are expectations, estimates, forecasts and projections
based on information currently available to the Company and are subject to a number of risks,
uncertainties and assumptions. As such, actual results may differ materially from those projected.