Business Results for theended Nov. 31, 2015

Jan. 27, 2016

Outline

1䠊Overview of FY2015 Results &Progress of Mid-term Business Plan.

2䡚122䠊FY2015 Results & FY2016 Forecast

13䡚25



FY2015 Full-Year Results

Overview(Billions of yen)

FY2014
Full Year

FY2015Full Year䠆In real terms

Full Year

ChangeNet sales

218.2

207.4

218.5

Operatingincome

18.5

18.0

18.9

Ordinary
income18.4

17.8

17.3 䠄䕧3.2䠂䠅 䕧0.5

Net income

9.9

9.5

11.5 䠄+21.9䠂䠅 +2.08yen

10yen

Dividendper share(+5.3䠂) +11.0

䠄+4.9䠂䠅

+0.82* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

Trend of Net Sales & Operating IncomeOverview(Billions of yen)
Operating IncomeNet Sales㻟㻜㻜㻠㻜䠘FY2015 initially forecast䠚㻞㻡㻜Net Sales225.0

㻞㻜㻣㻚㻠
㻞㻜㻜

㻟㻜

㻞㻝㻤㻚㻡

Net Sales㻝㻣㻡㻚㻢Operating Income 20.5

㻝㻡㻜Operating Income㻝㻤㻚㻜㻝㻤㻚㻥䛆Net Sales䛇䞉Drop in domestic sales of automobiles
䞉Downturn of Chinese economy

㻝㻜㻜
㻝㻞㻚㻟
㻡㻜

㻞㻜

䠘Main Factor 䠚㻝㻜䛆Operating Income䛇䞉Low operating rate䞉Increase in fixed cost㻜㻜㻞㻜㻝㻟㻞㻜㻝㻠㻞㻜㻝㻡

* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

Outlook for FY2016

Overview(Billions of yen)

FY2015FY2016e

Full Year

Full year

ChangeNet Sales

218.5

225.0 䠄+3.0䠂䠅

+6.4

Operatingincome

18.9

19.5 䠄+2.9䠂䠅

+0.5

Ordinary
income17.3

18.5 䠄+6.8䠂䠅

+1.1

Net income

11.5

12.0 䠄+3.5䠂䠅

+0.4

Dividend
per share

10yen

10yen


Mid-term Plan & Long-term vision

Overview(Billions of yen)
Operating Income

Net Sales㻠㻜㻜Net sales
FY2014
䠄Operating income䠅
Mid-term plan

205.0
䠄17.0䠅

Result & Outlook

207.4
䠄18.0䠅

㻟㻜㻜㻠㻜㻜㻚㻜
FY2015FY2016e225.0䠄20.5䠅218.5
䠄18.9䠅

250.0
䠄25.0䠅
225.0
䠄19.5䠅

FY2017e㻢㻜㻚㻜

䠉㻡㻜

250.0
䠄25.0䠅

㻠㻜㻞㻡㻜㻚㻜
㻞㻜㻣㻚㻠
㻞㻜㻜

㻞㻞㻡㻚㻜

Net Sales㻞㻡㻚㻜㻝㻣㻡㻚㻢Operating Income㻝㻜㻜

㻞㻝㻤㻚㻡

㻝㻤㻚㻜

㻝㻤㻚㻥

㻢㻜

㻝㻥㻚㻡

㻝㻞㻚㻟

䠘Main Policies䠚䛆Increasing net sales䛇䖣Release new products
䠄Strategic 6 products䠅
䖣Strenghthen oversea sales
䛆Increasing profit䛇䖣Improve productivity
䖣Expand in-house production

㻜

㻟㻜

㻞㻜

㻝㻜

㻜

㻞㻜㻝㻟

㻞㻜㻝㻠

㻞㻜㻝㻡

㻞㻜㻝㻢㼑

㻞㻜㻝㻣㼑

* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

㻞㻜㻞㻜㼑Long-term vision

Sales of Strategic 6 products
Bearing for automobiles(Billions of yen)
Automotive hydraulics
250.0
Hydroulic equipment for construction machines
other
Robots15.0
Hydroulic equipment for industrial machines
Cutting tools
225.0
other
8.9

207.4

䞉Respond to the demands ofJapanese companies in foreigncountries

䠘Robot䠚䞉Expand small-size robots
䞉Expand technical center
䠄Japan, China, North America䚸Europe, etc䠅

60.0

other
9.8

䠘 Bearing for automobile 䠚䠘 Automotive hydraulics 䠚䠘 Hydroulic equipment forconstruction machines 䠚䞉Expand dealings with foreign
local customers

other
9.5

218.5

Overview

40.0
34.0

22.0
䠘 Hydroulic equipment forindustrial machines䠚䠘Cutting tools䠚

175.6

䞉Expand products lineup
䞉Expand dealers in foreigncountries㻞㻜㻝㻟㻞㻜㻝㻠㻞㻜㻝㻡㻞㻜㻝㻢

Expanding products lineup㻞㻜㻝㻣* FY2014 do not include the effect of FY period changeof overseas consolidated subsidiaries.



Overview

䠘Carbide Drill & Tap䠚
䞉Expand the sizes and series
䞉Strengthen combine-sales (Carbide drill & tap)

䠘Energy Saving Compact Hydraulic Equipment䠚䞉Respond to the demand for energy-saving
in developing countries.

䠘Small-sized Robot䠚䞉Release Scala-robots
䞉Cultivate new business sector
food industry, pharmaceutical industry, etc
Strengthen Overseas Operations

Overview

䠘Policies of Strengthening Overseas Sales䠚䞉Sales activity should be done at the markets in demand䞉Local production for Local consumption
䛆Sales䛇䞉䞉䞉Expand direct sales activity in overseas market
䞉Strengthen overseas sales dept
䞉Increase the number of sales staff
䞉Establish technical center for robots business䛆Production䛇
䞉Introduce “effective production system” to overseas factory
䞉Expand “ In-house production system” in overseas factory

Activity in North America Area

Overview

䠘Midwest Area 䠚䞉Approach to “Detroit3”

䠄Detroit䠅䠘West Coast Area䠚䞉Cluster of aircraft & EMS companies

䠄San Jose䠅䠄Atlanta䠅䠖Sales Office䠄existing䠅䠖Sales Office䠄New䠅
2015

2016(change)

Sales Office77(㸩2)

Sales Staff

220300(㸩80)䠘South Area䠚
䞉Demand in automobile,construction andpower generators

䞉Expand production capacityof cutting tools & bearings

䠖Technical Center䠄New䠅䠖Manufacturing Plant

䞉Start to produce bearing in Oct, 2016



Activity in China Area

Overview

䞉Core office in China’s operation
䠄Zhangjiagang䠅䠄Tsingtau䠅

䠖Sales Office䠄existing䠅䠄Shanghai䠅䠖Sales Office䠄New䠅

䠄Wuhan䠅2015

2016(change)

Sales Office56(㸩1)

Sales Staff220320(㸩100)

䠘Central China Area䠚
䞉Demand in automobile, electronics

䠖Technical Center䠄New䠅䠄Guangzhou䠅䠖Manufacturing Plant

Activity in ASEAN Area

Overview

Start to produce bearings from forging and lathe turning process

䠄Bangkok䠅䠖Sales Office䠄existing䠅䠖Technical Center䠄New䠅䠖Manufacturing Plant
Sales Staff

2015

2016(change)

120150(㸩30)Space for expanding range of products

䠄Jakarta䠅Development of Human Resources

Overview

䠘Responding to Globalization䠚䖣Increase local sales staff
䞉Local people only know a mind of local people
䞉Hire more local workers and assign to the exective䖣Empowerment of female employees䞉Route-sales to foreign local dealers䞉Improve the environment and system of working
Financial highlights of FY2015

FY2015(Billions of yen)

FY2014FY2015Full Year

Full Year䠆In real terms

Full Year

ChangeNet Sales

218.2

207.4

218.5

(+5.3䠂)+11.0

Operating
Income18.5

䠄8.7䠂䠅 18.0

18.9

䠄+4.9䠂䠅

+0.8

Ordinary
Income18.4

䠄8.6䠂䠅 17.8

17.3

䠄䕧3.2䠂䠅 䕧0.5

Net Income

9.9

9.5

11.5

䠄+21.9䠂䠅

+2.0
* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

Financial Data

FY2015(Billions of yen)

FY2014
䠄䠝䠅Total assets
Stockholder’s equity
䠄stockholder’s equity ratio䠅

Interest-bearing debt
䠄Net D/E ratio䠅

FY2015
䠄䠞䠅

Change䠄䠞䠅䠉䠄䠝䠅

255.6

268.1

+12.5

䠄35.8䠂䠅

91.5

䠄38.3䠂䠅 102.5+11.0

䠄㽢0.4䠅

64.1

䠄㽢0.5䠅

72.8+8.7

Capital investment

20.6

23.2+2.6

Depriciation

11.7

12.9

+1.2

Number of employees

6,296

6,557+261

Exchange rate 䠄USD䠅

103yen139yen䠄Euro䠅

120yen 17yen deppreciation
4yen appreciation
135yen* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

Sales by Region and Market Segment
䠘Sales by region䠚
(Billions of yen)൨෇䠘Sales by market䠚
218.5

218.5

207.4

Europe 11.0

Europe 11.7

America 24.8

Asia 52.4

䕧6.0䠂

207.4



Energy andInfrastructure4
40.7

America 32.4 䠇30.6䠂

Asia 59.2

FY2015䠇13.0䠂

Industrial
machinery/Market56.8

Energy andInfrastructure46.0

䠇13.0䠂

Industrial
machinery/Market
60.3

䠇6.2䠂





Japan 115.9

Japan 118.4

䕧2.1䠂

Automobile
110.0

Automobile
112.2㻲㼅㻞㻜㻝㻠㻲㼅㻞㻜㻝㻡

+2.0䠂




㻲㼅㻞㻜㻝㻠㻲㼅㻞㻜㻝㻡

* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

Sales by region and market segment

FY2015(Billions of yen)

FY2014䠄䠝䠅changeFY2015
䠄䠞䠅

(䠂)

(B)䠉(A)

Machinery & Tool
NetsalesOperating Income

72.2
䠄9.1䠂䠅

6.5

䠄11.3䠂䠅

75.4(䠇4.5䠂)䠇3.2

8.5

䠄䠇29.6䠂䠅

䠇2.0

126.4

(䠇7.5䠂)䠇8.7

8.7 䠄䕧7.8䠂䠅

䕧0.7

16.5

(䕧5.7䠂)䕧1.0

1.7 䠄䕧11.8䠂䠅

䕧0.2

Components
NetsalesOperating Income

117.7
䠄8.1䠂䠅

9.4

䠄6.9䠂䠅

Materials & others
NetsalesOperating Income

17.5
䠄11.0䠂䠅

To t a l N e t s a l e s
Total Operating Income

1.9

䠄10.3䠂䠅

207.4
䠄8.7䠂䠅

18.0

䠄8.7䠂䠅

218.5 (䠇5.3䠂)䠇11.0

䠄䠇4.9䠂䠅

䠇0.8

18.9

* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

Factors for change in operating income

FY2015(Billions of yen)

䠄Profit up䠖9.8䠅







䠄Profit down䠖9.0䠅

Improved operatingrate䠇3.0

Increase in fixed costand SGA 䕧6.0

Effect of Exchange
rate 䠇3.5

Price down 䕧2.0

Cost Reduction
䠇3.3

Raw material cost up 䕧1.0

䠇0.8㻝㻤㻚㻥㻝㻤㻚㻜
FY2014

Profit up

Profit downF䠵2015* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

Financial highlights of FY2016

FY2016e(Billions of yen)

FY2015(䠝)

FY2016e(䠞)Net Sales

218.5

Operating
Income18.9

Ordinary
Income17.3

Net Income

11.5

䠄䠂䠅

change(B) - (A)225.0(䠇3.0䠂)䠇6.4(8.7䠂)19.5(䠇2.9䠂)䠇0.5(8.2䠂)18.5(䠇6.8䠂)䠇1.112.0(䠇3.5䠂)

䠇0.4



Financial Data

FY2016e(Billions of yen)

FY2015
䠄䠝䠅Total assets
Stockholder’s equity
䠄stockholder’s equity ratio䠅

Interest-bearing debt
䠄Net D/E ratio䠅

FY2016e䠄䠞䠅Change䠄䠞䠅䠉䠄䠝䠅

268.1

284.0+15.9

䠄38.3䠂䠅 102.5

䠄39.4䠂䠅 112.0+9.5

䠄㽢0.5䠅 72.8

䠄㽢0.5䠅

82.6+9.8

Capital investment

23.2

23.0

䕧0.2

Depriciation

12.9

14.3

+1.4

Number of employees

6,557

7,000+443

Exchange rate 䠄USD䠅

120yen135yen120yen130yen㼼0䠄Euro䠅

5yen appreciation
Sales by Region and Market Segment
䠘Sales by region䠚
(Billionsof yen)൨෇Europe 11.0

Europe 11.5+4.3䠂



America 32.4

䠘Sales by market䠚

225.0

218.5

America 35.0 䠇8.1䠂

Asia 63.5

Asia 59.2

FY2016e

䠇7.2䠂

225.0

218.5

Energy andInfrastructure
46.0

Energy andInfrastructure
46.0

Industrial
machinery/Market64.0

Industrial
machinery/Market
60.3

䠇0䠂

䠇6.1䠂





Japan 115.9

Japan 115.0

䕧0.8䠂






㻲㼅㻞㻜㻝㻡

㻲㼅㻞㻜㻝㻢㼑

Automobile
112.2

Automobile
115.0㻲㼅㻞㻜㻝㻡㻲㼅㻞㻜㻝㻢㼑

Sales by region and market segment+2.5䠂



FY2016e(Billions of yen)

FY2015䠄䠝䠅changeFY2016e䠄䠞䠅(䠂)(B)䠉(A)

Machinery & Tool
NetsalesOperating Income75.4
䠄11.3䠂䠅

8.5

䠄10.6䠂䠅

80.0(䠇6.0䠂)

䠇4.5

8.5

䠄䕧0.1䠂䠅

䕧0129.5(䠇2.4䠂)䠇3.0

9.7 䠄䠇10.8䠂䠅䠇0.9

15.5(䕧6.4䠂)

䕧1.0

1.3 䠄䕧23.6䠂䠅

䕧0.4Components
NetsalesOperating Income

126.4
䠄6.9䠂䠅

8.7

䠄7.5䠂䠅

Materials & others
NetsalesOperating Income

16.5
䠄10.3䠂䠅

To t a l N e t s a l e s
Total Operating Income

1.7

䠄8.4䠂䠅

218.5
䠄8.7䠂䠅

18.9(䠇3.0䠂)䠇6.4

19.5 䠄䠇2.9䠂䠅

䠇0.5

225.0
䠄8.7䠂䠅

Factors for change in operating income

FY2016e(Billions of yen)䠄Profit up䠖5.3䠅


Cost reduction 䠇2.4

Improved operating
rate 䠇2.9

䠄Profit down䠖4.8䠅
Increase in fixed cost and SGA 䕧3.0
Effect of Exchange rate 䕧1.0
Price down 䕧0.8

䠇0.5


㻝㻥㻚㻡

㻝㻤㻚㻥
FY2015

Profit up

Profit down

FY2016e

Mid-term Plan & Long-term vision(Billions of yen)

Operating Income

Net Sales㻠㻜㻜

FY2016e

Net Sales
FY2014
䠄Operating Income䠅
Mid-term Plan

205.0
䠄17.0䠅

Result & Outlook

207.4
䠄18.0䠅

㻟㻜㻜㻠㻜㻜㻚㻜
FY2015FY2016e225.0
䠄20.5䠅
218.5
䠄18.9䠅

250.0
䠄25.0䠅
225.0
䠄19.5䠅

FY2017e

㻢㻜㻚㻜䠉

㻡㻜

250.0
䠄25.0䠅

㻠㻜㻞㻡㻜㻚㻜㻞㻜㻜㻞㻜㻣㻚㻠Net Sales㻞㻝㻤㻚㻡㻞㻞㻡㻚㻜㻞㻡㻚㻜㻝㻣㻡㻚㻢㻝㻤㻚㻜㻝㻤㻚㻥㻝㻥㻚㻡

Operating Income㻝㻜㻜㻢㻜㻝㻞㻚㻟䠘Main Policy䠚䛆Increasing Net Sales䛇䖣Release new products
䠄Strategic 6 products䠅
䖣Strenghthen oversea sales
䛆Increasing Profit䛇䖣Improve productivity
䖣Expand in-house production

㻜

㻟㻜

㻞㻜

㻝㻜

㻜

㻞㻜㻝㻟

㻞㻜㻝㻠

㻞㻜㻝㻡㻞㻜㻝㻢㼑㻞㻜㻝㻣㼑

* FY2014 do not include the effect of FY period change of overseas consolidated subsidiaries.

㻞㻜㻞㻜㼑Long-term vision 㼔䡐䡐䡌㻦㻛㻛㼣㼣㼣㻚㼚㼍㼏㼔㼕㻙㼒㼡㼖㼕㼗㼛㼟㼔㼕㻚㼏㼛㻚㼖㼜㻛

These materials describe our future earnings forecasts and business plans,
and are based on the assumption of an economic environment andbusiness policies that remain fixed as they are now. Therefore, please
note that actual earnings are subject to numerous factors, including
market fluctuations and currency fluctuations, which may result in adifferent earnings forecast.