November 6, 2017

NTN Corporation
2017/11/6

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Contents
Ⅰ. Financial Results for First Half andForecast for FY2017

Ⅱ. Initiatives of “NTN 100”
Ⅲ. For next 100 years• 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.

2017/11/6

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Trends in consolidated financial results:
Results of 1H and Full year Forecast
Income and profit increased in this 1H due to the favorable sales in Industrial Machinery Business.
Financial forecast in this fiscal year will be revised upward due to favorable sales in Industrial Machinery and Aftermarket Businessand exchange-rate although there is still concern for automotive production in North America.
1H Result

FY2017 1H Result

Full year forecast

in brackets are previous announcement

Net Sales: ¥357.9 billion (¥345.0 billion)

Operating Margin

YoY+9.5%, Excl. exchange rate effect +5.2%（billion yen）

（billion yen）

Operating Income: ¥16.8billion (¥15.0 billion)
YoY+6.2%, Excl. exchange rate effect +7.1%(Year on Year）
Net Sales +9.5%（Excl. Exchange
rate +5.2%）
Operating Margin +6.2%（Excl. Exchange
rate +7.1%）
Operating Margins -0.1pt

Net Income: ¥8.4 billion (¥3.0 billion)
YoY+36.8%

Interim dividend: ¥7.5
Incl. commemorative ¥2.5

FY2017 Full year Forecast
in brackets are previous announcement

Net Sales: ¥720.0 billion (¥700.0 billion)
YoY+5.4%, Excl. exchange rate effect +3.1%

Operating Income: ¥39.0 billion (¥36.0 billion)
YoY+9.5%, Excl. Exchange rate effect +8.3%

Net Income: ¥13.0 billion (¥10.0 billion)
Incl. extraordinary loss ¥10.0 billion

Annual dividend: ¥15 *interim ¥7.5,year-end ¥7.5
Incl. commemorative ¥5.0(Annual)

2017/11/6

Note: Net Income: Net Income attributable to shareholders
FY2017 2H exchange rate: US$1=110yen(Unchanged), €1=125 yen (Change from 115 yen)3

Ⅰ. Financial Results for First Half andForecast for FY2017
Ⅱ. Initiatives of “NTN 100”
Ⅲ. For next 100 years

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Contents★ Financial Results for FY2017 First Half : 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 Company Location(1) Japan, Americas(2) Europe, Asia and others
７．Inventories
８．Interest-Bearing Debt
９．Capital Expenditure and Depreciation
１０．Cash Flows

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Financial Results for the First Half of FY2017 : Key Factors

Results of FY2017 Second Quarter◇Net Sales： ¥357.9 billion
・Increase of ¥31.1 billion, year-on-year(Excluding exchange rates: increase of ¥16.9 billion, increased by 5.2%)◇Operating Income： ¥16.8 billion
・Increase of ¥1.0 billion, year-on-year（Excluding exchange rates : increase of ¥1.1 billion, increased by 7.1%)◇Ordinary Income： ¥13.6 billion
・ Increase of ¥2.1 billion year-on-year(Excluding exchange rates: increase of ¥2.3 billion, increased by 19.7%)◇Net income attributable to shareholder(parent company)： ¥8.4 billion
・Increase of ¥2.3 billion, year-on-year(Excluding exchange rates: increase of ¥1.7 billion, increased by 27.2%)◇Free Cash Flow： ¥12.2 billion, decrease of ¥1.4billion, year-on-year
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Financial Results for the First Half of FY2017 : Key Factors

Revised FY2017 Full year forecast◇Net Sales： ¥720.0 billion,
increase of ¥20.0 billion compared with previous forecast (¥700.0 billion)◇Operating income： ¥39.0 billion,
increase of ¥3.0 billion compared with previous forecast (¥36.0 billion)◇Extraordinary losses： ¥10.0 billion
No revise from the previous forecast◇Net income attributable to Shareholder (parent company)： ¥13.0 billion,
increase of ¥3.0 billion compared with previous forecast (¥10.0 billion)◇In regards to dividends, the Company plans ¥15 for this fiscal year
No revise from the previous forecast(an interim and year-end dividend of ¥5 anda commemorative dividend of ¥2.5)◇Exchange-rate form the third quarter： 1USD = ¥110 (previous forecast, ¥110)
and 1EURO = ¥125 (previous forecast, ¥115)
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1. Consolidated Statements of Operation

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2. Net Sales by Region(billion yen)

FY2016FY2017

1H

2H

Full year

1H

Full year

Results

Results

Results

Results

Forecast①②

Year on year
FY2017 1H
②-①
Total

Excl.Forex

Forex

Japan

92.8

98.7

191.5

99.5

201.5

6.7

6.7

-

Americas

93.4

101.4

194.8

98.8

198.5

5.4

0.1

5.3

Europe

75.2

79.8

155.0

82.5

167.0

7.3

2.0

5.2

Asia andothers

65.5

76.6

142.1

77.2

153.0

11.7

8.1

3.6

Total

326.8

356.5

683.3

357.9

720.0

31.1

16.9

14.2

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3. Net Sales and Operating Income by Business Sector

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4. Results by Business Sector （Quarterly Trend）＊All figures in billion yen.

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5. Analysis of Operating Income （FY2017 1H ）＊All figures in billion yen.

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

Net Sales
200.0
150.0

150.0

154.6

166.2

168.9
100.0

91.7

99.7

97.4

FY20162H

FY2017
1H

5.0%

3.8%

100.0
50.0
50.0

0.0

FY20161H

FY20162H

FY20171H

0.0

FY2016
1H

Operating Income

Operating Income

15.0

15.0

12.0

12.0

9.0
6.0
3.0

0.4%

2.3%

1.9%

3.8

3.2

0.6

3.0
0.0

FY20161H

FY2016
2H

3.6%

6.0

0.0

2017/11/6

9.0

FY20171H

3.3
FY20161H

5.0

FY20162H

3.7
FY20171H

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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

81.7

87.3

90.8

100.0

66.2

50.0

0.0

《 アジア他 》

FY20161H

FY20162H

FY20171H

0.0

FY2016
1H

Operating Income

15.0

15.0

12.0

12.0

1.3%

2.6%

1.3%

6.0

3.0
0.0

2017/11/6

77.4

FY20162H

FY2017
1H

11.1%

11.8%

8.4

9.1

FY20162H

FY20171H

50.0

Operating Income

9.0

76.1

9.0
6.0

1.0
FY20161H

2.3
FY20162H

1.2
FY2017
1H

9.2%

6.1

3.0
0.0

FY20161H

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7. Inventories

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8. Interest-Bearing Debt

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9. Capital Expenditure and Depreciation

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10. Cash Flows

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Ⅰ. Financial Results for First Half andForecast for FY2017
Ⅱ. Initiatives of “NTN 100”
Ⅲ. For next 100 years

2017/11/6

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Initiatives of NTN 100: Manage Growth
Due to the sluggish economy in emerging countries, the net sales and operating income in Aftermarket Businessand Industrial Machinery Business did not increase. Although the initial target is not expected to be achieved in
the Final Fiscal year, the sales in this fiscal year is in good condition due to each initiative.
Transition in Net Sales andOperating Income

1. Develop New Businesses･Natural Energy Products and EV related
business have been commercializing andthe products are on sale.
･Early commercialization of Robot-related
Business and Service, Solution Businesshas been promoted.
→ Details explained on Page 24 and after

NTN100（billion yen）

2. Expand Aftermarket businessTransition in sales of
Aftermarket Business（billion yen）

Transition in physical quantity of sales(the index is FY2014 as 100)Aftermarket
Industrial Machinery

Automotive
Total

FY2014
Results

FY2015
1st Year
Results

FY2016
2nd Year
Results

FY2017
3rd Year
Forecast

FY2017NTN 100
Plan

100
100
100
100

100
94
102
100

100
96
107
104

105
109
108
107

137
112
112
116

2017/11/6･Each initiative has been promoting
although sales and income did not achieve
the target･Increase the number of technical training
session at a customer site. Visit 750
companies in FY2015, 900 in FY2016･Achieved 10% in global market share･Improvement of the brand image andmeasurement against counterfeit product

Renew package design of precision bearing

Note: Exchange-rate of the initial target in third year, FY2017 is US$1=110 yen, €1=130yen
and the other currency is based on the actual rates.

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Initiatives of NTN 100: Manage Profitability
Structural Reform of the Driveshaft Business is going smoothly.
Introducing of innovative manufacturing technologies, establishment of new plant andMonozukuri with next-generation technology.
1. Structural Reform of the Driveshaft Business（billion yen）

･Improve the selling price of lowprofitable productsLightweight DS for･Increase volume and expand the sales
FR vehicle
Transition in sales of
DS Operating for luxury vehicle
Automotive BusinessMargin･Adjust the production load between
each business site
･Increase use of the local material, etc.
（billion yen）
Ultra High→ Operating Margin: Improved more
Angle DOJ
3pt (target) than expected.

Net Sales and Operating Margin of
Driveshaft Businessin Automotive Business

BJ cassette
production in
NTN-Bower

Start massproduction in NDA
in April 2017

Start mass-productionin Mexico Plant
in Dec. 2015

Transition in sales ofIndustrial Machinery Business2. Monozukuri with Next-Generation Technology･Construct new HT plant in NTN Noto Corp. to establish･Introducing the innovative
integrated production system in Noto Region
manufacturing technologies（billion yen）
･Realize the standardization and high ･Shorten the LT with latest HT technology andstrengthen
thecompetitivenessinIndustrial
Machinery
yield rate by EBWBusiness and Aftermarket Business<Forging>

2017/11/6<Turning><Heat Treatment><Grinding><Assembly>

Note：Exchange rate of the initial target in third year, FY2017 is US$1=110 yen, €1=130yen and the other currency is based on
the actual rates in Transition in sales of Automotive Business and Transition in sales of Industrial Machinery Business21

Initiatives of NTN 100: Manage Foundation
Strengthen management and financial foundation
1. Promote the supply chain CSR

TOPIX:
100th anniversary activities

Action for social issues regarding human lights, labor practices, environment andanti-corruption.
Signed onto U.N’s Global Compact･Sponsor for cycle road race･”NTN Rotating Work Shop” held forthe ties between local communities
and training of next generation

2. Observance the laws and regulations
Holding “Compliance Committee,”“Fair Trade Monitoring Committee,” “CSR Global Meeting”

CSR Global Meeting

3. Strengthen Risk Management System
Prevent and mitigate globally risk occurrence, promote BCM

4. Investment for strengthening the business and financial foundation

Sponsor for TOJ

Investment in intangible fixed assets to re-build IT core systems(FY2016: 5.9 billion yen, FY2017: 8.5 billion yen plan )NTN Rotating
Workshop

TOPIX : NTN included in ESG indices

TOPIX: NTN participated in Asahi World Forum 2017

NTN included in ESG indices selected by GPIF in July 2017
・FTSE Blossom Japan Index
・MSCI Japan ESG Select Leaders Index
・MSCI Japan Empowering Women Index

Participated in Panel Discussion of Asahi World Forum 2017
Discuss contribution with natural energy product to local
communities through the theme of “Invigorating Communities
through Local Production and Consumption of Energy.”

Source：GPIF
Asahi World Forum 20172017/11/6

Note: GPIF: Government Pension Investment Fund

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Initiatives of NTN 100: Manage Foundation
Key Management Indicators
Creation of FCF for 2 years exceeded expected with the effects of improving profitability andinventory reduction. However, related indicators decreased, because net income decreased due
to loss related to Anti-monopoly Act and lawsuits and others.
3-year period
1. Strengthen asset efficiency

Reduction of interest-bearing debt
(excluding foreign exchange impact)

FY2016FY2017FY2018ResultResultFull year forcast

Total amount
Average rate

￥26.2 billion reduction ￥1.8 billion reduction ￥0.2 billion increase ￥27.7 billion reduction

NTN 100 target￥60.0 billion reduction /3 years

Inventory reduction(inventory turnover ratio)
Capital expenditure

4.0 times / year

4.0 times / year

￥36.3 billion / year

￥35.4 billion / year

FCF

￥12.5 billion￥21.2 billion￥13.0 billion￥46.6 billion￥67.0 billion / 3 years

Equity to capital ratio

29.2%

28.7%

30.3%

29.4%

30.0% or more

Net D/E ratio

1.1

1.1

1.0

1.0

1.0 or less

ROE

6.3%

1.2%

5.4%

4.3%

Over 14%

2. Improvement of the profit
margin on sales
Operating margin

4.1 times / year

4.0 times / year

￥40.0 billion / year ￥111.7 billion / 3 years

4.5 times / year
￥135.0 billion / 3 years

3-year period
FY2016FY2017FY2018NTN 100 target

ResultResultFull year forcast

Average

6.7%

5.2%

5.4%

5.8%

8.8%

3-year period
3. Shareholder return
Dividends

FY2016FY2017FY2018ResultResultFull year forcast

AverageAnnual ￥10

Annual ￥10

Annual ￥15--

Dividend payout ratio of60%

Dividend payout ratio of 30%
is basic idea

Dividend payout ratio of Dividend payout ratio of Dividend payout ratio of
35%
188%
61%

2017/11/6

NTN 100 target

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Ⅰ. Financial Results for First Half andForecast for FY2017
Ⅱ. Initiatives of “NTN 100”
Ⅲ. For next 100 years

2017/11/6

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For Next 100 years:
Initiatives for EV and Electrification in Automotive Business
Automotive production will increase by 1.8 times in 2040 and 25% of the production will be EV.
ICE Vehicles including HEV is also expected to increase by 1.4 times.

Increase of Global Automotive Production
1.8 times
in 2040

Production of EV/FCV

67 times

FY2040170 million

Potential of Expansion ofAutomotive Business
Other

1.4 times

FY2016
94 million

80％

Driveshaft
Hub Bearing

Production of engine vehicle
including HEV
FY2006295.6Billion yen

FY2016
480.2
Billion yen

Driveshaft

World No.２

Hub Bearing

World No.1
Source:IEA/ETP

Bearings for T/M, chassis and motor for EV

Asia
AfricaPopulation is growing in
Asian and Africancountries according topopulation statistics in U.N.
→Demand for vehicle will
increase

EV (related) BusinessChange to FF
vehicle in emerging
Production countries
1.8 times +α and increase SUV
boost the sales

Production
1.8 times
Production
1.4 times+ demand for EV＋New
Orders・Hub bearing and driveshaft, NTN main products are
essential for both engine vehicle and EV.
・Sales for automotive market are expanding by new products
through commercialization of EV-related business, demandfor bearing of EV and new orders.

Source:WPP2017,UN

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For Next 100 years:
Initiatives for EV and Electrification in Automotive Business
Promote development of new products utilizing AI and NTN core technology such as Tribology and sensor.

NTN Core Technology ＋AI

１．Autonomous Driving and ADAS
HB with an Integrated HighResolution Rotation Sensor(40 times higher than ABS sensor)

High-Resolution Sensor
Safe and Secure

Trend Management
at Driving
Damage prevention
In-wheel Motor

２．EV and Electrification
High-Rigidity
Weight Reduction
Quietness and low-vibration
Low-friction

３．Ride Sharing and
Car Sharing

Sensor Technology
Upgrading

Products for electrification(Actuator)
Composite
Material
Products

ADS Module

ULTAGE Tapered
Roller Bearing for
Automotive
Application

SolidityLong Operating Life
Early Diagnosis
Condition Monitoring System (CMS)

Auto Parts“eHUB,” hub bearing
with motor generator function
Module for “48V Mild Hybrid System”
Utilize the technologies for hub bearing which holdthe world No.1 shares and technologies for motor
control and modular cultivated from thedevelopment of the In-wheel Motor.
Improve the fuel efficiency by 25%

Low Friction Hub Bearing II
Reduce rotational friction by 50% due tothe development of newly designed seal
structure and adopting low-friction
grease. This eco product improves thefuel efficiency by approximately 0.42%

2017/11/6

Prediction ofoperating life
Condition
Monitoring
Technology

Prediction of bearing
operating life utilizing AI
Estimate the damage
condition and deteriorationof lubricant

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For Next 100 years: Technology Development,
Robot-related Business and Service, Solution business
Create new business and new product with unique technology development
Promote the joint-research with academito strengthen the upper R&D system
１．Unique product development and sale:“Asymmetrical Spherical Roller Bearings”
Mass ofBladesParallel Link High Speed Angle Control Equipment
Applying driveshaft technology, robot arm
product which has 90 operating degrees
and can turn 360 degrees is released.
It enables the same motion as wrist joint
in narrow space and contributes to save
manpower.

Mass of Blades

Wind
Load
Internal structure ofwind turbine

Main shaft bearings ofwind turbines

Develop unique main shaft bearing for large size windturbine Longer operating life approximately by 2.5 times
with asymmetrical design of left and right roller.
Unique design to support the load of rotor and blades atfront low and the axial load of wind at rear low.

Wind Loadnewproduct

conventional
product

Cross-sections

２．Promote collaboration between industry and academic
Establish “NTN Next Generation Research Alliance Laboratory”

Collaboration with
precision cleaning system of
Air Water Inc,

Applying to the wrist jointof two-arm robot（photo by Air Water Inc）

Establish “NTN Next Generation Research Alliance Laboratory” in the
Graduate School of Osaka University which has latest technology tostrengthen upper R&D system･Artificial 3D cellular tissue for drug discovery and applications forregenerative medicine(Expand application of unique technology
utilizing microscopic coating).
･Prediction of bearing operating life utilizing AI.
･Trend management and damage prevention of bearing by multiDesktop Type
Microscopic
functional sensor.
Coating Applicator ･Research advanced CAE analysis technology for low fuel consumption.

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For Next 100 years:
Commercialization of Natural Energy Products
Promoting the commercialization of natural energy product utilizing the innovative “blade” technology
1. “NTN Micro Hydro Turbine” launched in addition to “NTN Hybrid Street Light”“NTN Hybrid Street Light”（Operating about 80 units in Japan. Getting more and more inquiries）･Generate power from wind and solar power and LED lights automatically turn on at night･Joint research with Osaka University for creating mechanisms regarding
disaster prevention monitoring and tourism･Adapted in “Mimamori Robokun III” and under demonstration test
･Supplying the light and Wi-Fi communication, etc. in no wires area around the world･As 100th anniversary activity, donated in 5 location for reconstruction and crime prevention“NTN Micro Hydro Turbine”（Launched from July 2017）･Easy installation to minimize cost and time･Generate much power by installing several units in series and in parallel for
optimum power generation･High-efficiency power generation to harness the energy of water･Supplied to TEPCO HD and demonstration test is conducting

2. “NTN Vertical Axis Wind Turbine(10kW)” will be launched from 2018
“NTN Vertical Axis Wind Turbine(10kW)” （From 2018 plan）･Excellent quietness and Safety

Almost no wind noise and very quiet･High Efficient Power Generation
Keeping the rotational speed with the wind,high efficient power generation with natural wind･High
operating rate
Demonstration Unit
Achieve high operating rate with winglet
in Iwata Eco Park

2017/11/6

NK approval
within FY2017(plan)
Unit for NK approval in
Hibiki Nada, Kita-Kyushu city

Note: “Mimamori Robokun IIIdemonstration test” http://www.ntnglobal.com/en/news/press/news201700089.html“The timing of release “NTN Vertical Axis Wind Turbine” is scheduled as of November 2017.

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2017/11/6

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(Reference) Aftermarket Business :Result for the First Half and Forecast for the Second Half
＜Results for FY2017 1st Half (compared with FY2016 1st Half)＞

Net sales: ¥56.2 billion (+10.9%), Operating income: ¥6.8 billion (+1.9%)• In Americas, industrial machinery aftermarket was steady.
In Europe, increased in industrial machinery aftermarket and auto parts.
• Asia and others including China, industrial machinery aftermarket was strong.
＜Forecast for FY2017 2nd Half (compared with FY2016 2nd Half)＞

Net Sales(¥ Bn)

Operating Margin+8％

2017/11/6

Japan

Increase industrial machinery aftermarket

AmericasIndustrial machinery aftermarket andauto parts remain almost flat

EuropeIncrease sales mainly for major distributors
in industrial machinery aftermarket

Asia andothersAlthough anticipate decrease of auto parts,
increase in industrial machinery aftermarket

+7％

+5％

±0％

+6%

+2％

+6％

+7％

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

30

(Reference) Industrial machinery Business :Result for the First Half and Forecast for the Second Half
＜Results for FY2017 1st Half (compared with FY2016 1st Half)＞

Net sales: ¥57.3 billion (+24.3%), Operating income: ¥0.8 billion (+123.2%)• In Japan, increased demand for construction machinery.
Gearboxes for construction machinery and robot also increased.
• In Americas, increased demand for construction machinery.
For wind turbines and construction machinery increased in Asia and others.
＜Forecast for FY2017 2nd Half (compared with FY2016 2nd Half)＞

Net Sales(¥ Bn)

Japan Demands for construction and mining machine are steady.

Operating MarginGearboxes mainly for robots will increase

+20％

+12％

+31％

+9％

Continue to increase construction machinery production,
Americas and increase demand of repair parts via manufacturer.
Also agricultural machinery production will increase.

Increase demands for gearboxes and hydraulic equipment.

2017/11/6

+7%

+7％

+6％

+4％

Europe In aerospace, start delivery for new model.

Increase demand of construction machinery andAsia and machine tool.
others Recovery demand of agricultural machinery.

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

31

(Reference) Automotive Business :Result for the First Half and Forecast for the Second Half
＜Results for FY2017 1st Half (compared with FY2016 1st Half)＞

Net sales: ¥244.4 billion (+6.2%), Operating income: ¥9.2 billion (+4.6%)• In Japan, increased sales due to launch of the new model and favorable customer’s sales ofautomotive using NTN products.
• In Americas, sluggish demand for the sedan of major manufacturer. In Asia and others, sales
increased due to launch new model of Japanese manufacturer.
＜Forecast for FY2017 2nd Half (compared with FY2016 2nd Half)＞
Operating Margin
Net SalesJapan(¥ Bn)+4％△5％

2017/11/6

Almost flat due to increase customers’ sales andlaunch new model, although effect of transfer ofmanagement of our production.

±0％

△2％

+1%

±0％

+12％

△2％

Decrease sales due to demand for the sedan
Americas of major manufacturer, although effect of launching
new model and strong demand in South America

EuropeSales increase a little due to steady demand ofEuropean manufacturer.

Asia andothersDecrease sales due to decrease demand in ASEAN,
although effect of launch new model in China.

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

32