Medium-term Management Plan

Presentation material

February 10, 2021

NTN Corporation

Table of Contents• NTN Group Vision• “DRIVE NTN100” Phase2(New Medium-term Management Plan)

Feb.10, 20212

(1) NTN Group Vision: Realization of a “NAMERAKA Society”
NTN Group Vision

Through putting our corporate philosophy, “We shall contribute to international society through creating new technologies anddeveloping new products,” into practice, we aim to help solve global social issues and realize a "NAMERAKA Society" where people
can easily lead a secure and fulfilling life in harmony with nature.

Founders’ Spirit
Corporate
Philosophy

Realization ofa “NAMERAKA society” *Management
PolicyOur Vision*A society where people can easily lead asecure and fulfilling life in harmony with nature

Founder's“Frontier Spirit”
Spirit+ “Coexistence and Co-prosperity Spirit”

We shall contribute to international society
through creating new technologies and developing new products.

Corporate
Philosoph

NTN Group aims to realize a “NAMERAKA Society” through practicing its corporate philosophy.
As a company that is trusted and needed by communities including stakeholders, we engage in business activities with an emphasis on respect of human rights and compliance.

Management
PolicyOur
vision〈Stance to Stakeholders〉"NAMERAKA Society"：A society where people can easily lead a secure and fulfilling life in harmony with nature

Employees

NTN Group respects diversity, individuality and a safe and healthy
workplace environment where employees can work successfully.

Local
communities

NTN Group respects cultures and customs in the local communities and builds long-term
trust relationships by meeting their expectations through its business activities.

Customers

NTN Group seeks to maximize customer satisfaction and trust by providing
products and services of superior quality, safety and reliability.

Shareholders

NTN Group focuses on return for shareholders by sustainable profitable growth andbuilds long-term trust relationships with shareholders through active communications.

Business
partners

NTN Group, in a fair and free environment, builds good partnerships with its
business partners and works together for mutual growth and development.

Environment

NTN Group harmonizes its business activities with nature and contributes to preserve
the global environment by providing its technologies, products and services.

1．A company where its corporate philosophy isunderstood by all employees around the world, andwhere all employees think and act by themselves.

Feb.10, 2021

2．A company that has a global presence with original new
products and services appreciated for high quality andfunctions.

3．A company which everyone involved can beproud of the “NTN" brand”.

3(2 )Materiality and NTN in Fiscal Year 2027
1.Identifiy materiality
Identify materiality* and promote ESG management to achieve global goals (2030 SDGs, etc.)*Social and in-house issues that require responses on a priority basis in order for NTN Group to create and improve value
with sustainability

1 ) Contribute to society through creation of original technologies(Strengthen positive impacts)(1) Reduce energy loss
(2) Realize a sustainable society using natural energy(3) Provide safety and comfort

2) Form management systems / corporate organization
which are essential for NTN, as a global company(Minimize negative impact)

Goals suchas SDGs(1) Respond to climate change
Materiality(2) Resource recycling and pollution prevention(3) Improve the reliability of products and services(4) Procurement activities with an emphasis on environment and society(5) Respect for human rights(6) Promote labour safety and health
NTN in Fiscal Year
(7) Human resource development
2027(8) Promote diversity(9) Thorough compliance(10) Strengthen governanceRealization of
a " NAMERAKA society "Our Vision

2. NTN in fiscal year 2027 (10 years after the start of "DRIVE NTN100")

FY2018“DRIVE NTN100”

Drive forward the transformation of business structure
for the new 100 years
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Feb.10, 2021

1) Target business structure

Business growth will be driven by providing values with both existing and new products in thebusiness fields created to meet new market needs (e.g. electrification, robotization, IoT, natural energy).

2) Target management indices(1) Net sales growth: GDP growth rate in each region plus something extra(2) Operating margin: 10% or more
(3) Total asset turnover: 1.0 or more
(4) Foreign exchange sensitivity: 50% reduction4(3) Promotion of ESG Management
Provide values to society through practicing the corporate philosophy and aim to realize a "NAMERAKA Society"
Identify materiality to achieve targets (SDGs, etc.) and establish KPIs to promote ESG management

Materiality : 13 items
Environment<Strengthen positive impacts><Strengthen positive impacts>

1: Reduce energy loss
2: Realize a sustainable society
using natural energy

1: Provide safety and comfort

Module products
related to robots

High efficiency
Ultra-low friction

NTN Microscopic
Coating Applicator

Bearing refurbish
business

Energy creation /stable operation<Minimize negative impact >1: Respond to climate change
2: Resource recycling and pollution
prevention

Feb.10, 2021

GovernanceSocialDevelop 3D
cell chip<Minimize negative impact>
1: Thorough compliance
2: Strengthen governanceElectric module
products

Developtest kit<Minimize negative impact>

Drug
Discovery
andDiagnosis

1: Improve the reliability of products andservices
2: Procurement activities with an emphasison environment and society
3: Respect for human rights
4: Promote safety and health5: Human resource development
6: Promote diversity✓ Assess after the transition to a
Company with Nominating
Committee, etc. and promote
continuous improvement activities✓ Strengthen risk management✓ Strengthen internal audit system
Disclosure of ESG information
Active disclosure of ESG information
Continued adoption / expansion in indexes

Selected in
ESG indexes
adoptedby GPIF

Please refer to the Integrated Report "NTN Report" for the latest ESG initiatives.
https://www.ntnglobal.com/en/investors/annual.html

5

Table of Contents• NTN Group Vision• “DRIVE NTN100” Phase2(New Medium-term Management Plan)

Feb.10, 2021

6

(1) Business Operating Policy of “DRIVE NTN100” Phase2'5,9( 171
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External Environment
Phase 1EV, electrification, and re-acceleration of DX
Sharp deterioration
COVID-19 (uncertainty)
of financial structure
Emphasize on safety
Changes in work styles

Feb.10, 2021

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Operatingmargin
10% or more
Total asset
turnover1.0 or more
Foreignexchange
sensitivity
50%
reduction

Phase 2
1. Focus on NTN Revitalization in the next 3 years(rebuild BS and improve CF)
2. Seeding for future growth7(2) NTN's Business Environment
NTN's business environment
・Spread of EV
・Electrification ofindustrial machinery・Spread of AI and IoT・Spread of infectious diseases(COVID-19)

・Reduction in CO2 emissions
・Requests for energy-saving
machinery・Reduction in environmental
impact・Response to natural disasters

Japan●Moderate population and economic growth●Policy shift by the new president
Americas Economic policy shift to respond to climatechangeU.S. and China struggling for hegemony●Medium-to long-term decline in crude oil priceFeb.10, 2021

●Save labor and reorganize
production●Use external resource●R&D of electrification andnew products●Strengthen products
for large vehicles●Expand aftermarket
business●Promote local procurement

Europe●Trend of population declining●Economic policy for climate change(European Green Deal)●Significant strengthening of regulations for fuelefficiency and CO2●Uncertainty due to Brexit●Focus on products for EV●Expand aftermarket
business●Develope Middle East /Africa market

China●World’s No.1 population (decreasing birthrate andaging population over the long-term)●Economic policiy for climate change and nextgeneration technology (Made in China 2025)●Social infrastructure investment in inland areas●Significant strengthening of regulations for fuelefficiency and CO2●Expand volume●Focus on products for EV●Focus on wind turbinesand rolling stocks●Strengthen CMS business

Asia●Increase of population and middle-income
group●Social infrastructure investment●Progress of digitization in emerging countries●Expand volume●Utilize LCC products tostrengthen costcompetitiveness●Expand aftermarket
business

・Medium-to long-termlabor shortage
・Growth of emerging countries
・Issue of business succession

・Trade friction and tariffs
・Prevention of child labor(human rights)
・Response to conflict minerals
・Rise of low-cost products●Market shrink due to the depopulation(decreasing birthrate and aging population),●Promoting response to climate change●Materialization of Society 5.0

NTN’s main strategies8(3) Target Areas to Invest R&D Resources
Focus on 6 target areas● Service / solution● Robot-related module● Next-generation mobility module
1) Service / solution
Towards business providing service that
leads to sales of products
Transformation into a new business format

Robot
Machine tools
Wind turbines

Bearing withsensorMonitoring

AI analysis CMS
Bearing-related
Bearing
applications

4) Renewable energy-related
Contribute to create a society where people
can live safely and with peace of mind throughtechnology of independent power source
utilizing power generation and storage by
renewable energy
energyIndependent power supply /power generation / storage / monitoring (safety)

Feb.10, 2021

● Renewable energy-related● Hydrogen-related● Life science-related
2) Robot-related module
Contribute to automation, labor saving, andproductivity improvement in manufacturingindustry from perspectives of declining
working populations and robot collaboration

Strategic direction for R&D
Carbon neutrality(Environmental impact reduction anddecarbonization)

Pursuit of safety and comfort
3) Next-generation mobility module“Strengthen core technologies and products”
and “Develop businesses in new areas” fromperspectives of CO2 environmental regulation
and response to mobility

Incorporate functionsof AI and sensing

Core
New
areas

5) Hydrogen-related
Develop hydrogen-related products towards
realization of carbon neutral
Gain rapidly increasing demand due totransition to hydrogen society
・Hydrogen penetration
Technology ・Corrosion resistancefor metal, ・Wear resistanceheat treatment, ・Low temperature lubrication
resin material, ・Low costand lubrication ・Lightweight6) Life science-related
Develop next-generation products for
drug discovery and diagnostic chip with thecore technology of microscopic coating
Contribute to enriching people’s lives
Specimen
Virus detection

NTN Microscopic
Coating Applicator

Develop
3D cell chipDevelop test kit

9(4) Rebuild Business Portfolio and Product Portfolio
・Categorize NTN’s main businesses into “Create sector,”“Growth sector,” and “Harvest sector” and concentrate
management resources on these sectors
・Focus on expanding aftermarket business in business portfolio
Industrial
machinerybusiness

Businesscomposition ratio
AM
Auto

Ind.

FY2020・Life sciences (drug discovery andConditionCondition
Monitoring
onitoring
System

FY2030Automotive
business

Aftermarket
business

regenerative medicine)
Creation sector
・Hydrogen energy market
Establish new areas
・Expand market for wrist joint robot
ii-WRISTWRISTTMfor future growth・Condition Monitoring (CMS)FY2023

Automotive
business: 60%
Aftermarket
and industrial
machinery
OEM: 40%・Expand sales in the Middle
East and Africa
・Develop “Talking bearing” and“Thinking b
bearing” Sales company in UAE

・Products adapting toelectrification
eHUB, sHUB
Electric brake(January, 2021)

Growth sector
Expand Business
Concentrate
resources

・Green energy products
・Robot / gearbox
large size expansion)・Wind turbines (ultra-large
・Machine tools
ools (European market)
・Rolling stock (Chinese market)

・From product sales businessto service-oriented business
Strengthen MRO
Bearing refurbish business
FailureFailure detection
detection

・Products adapting toelectrification
Electric module products
・Existing products fitting EV
Low friction, higher efficiency

Harvest sector
Secure stable profit

・Improve
Improve profitability by enhancing costcompetitivenessConstruction machinery (electrification andhigh-performance products), Agricultural
machinery (Sales expansion of CVJ for
industrial machinery), Aerospace・Secure saleable inventory
Highly competitive products (BU, etc.)
Use of overseas production andexternal procurement

・Focus on the vehicle segment where
NTN’s strengths can be utilized・Optimize customers portfolio
・Secure volume in growth markets

・Reduce fixed cost and expand supply capacity throughoutsourcing manufacturing (breaking away fromself-sufficiency) of standard products such as ball bearings
TaiwanFeb.10, 2021

Indonesia10(5) Business Segment: Aftermarket Business
Marketing environment

Aftermarket business<Our Vision>
Transform from a “Manufacturing Company”
into a “Company that Delivers Values to
Customers through Products and Services.”
Net sales and operating margin
Net sales(Billion yen)

✓ Rise of LCC products (improvement in quality of products
made in China, etc.) through commoditization of generalpurpose bearings✓ Aftermarket overseas: Strong brand of European and U.S.
competitors in the marketplace✓ Increase in expected roles, such as the provision of a wide✓✓

range of services
Response for e-commerce with the development of IoTSophistication of counterfeit bearings

Initiatives focusing over 3 years
✓
✓

✓
✓

Feb.10, 2021

By sharing sales strategies across business lines
Consolidate resources into important industries
Strengthen organizational structure to improve supply
capacity, service response, and profitability
E-commerce based on the new IT core system
Promote business development in the service-oriented
business11

(5) Business Segment: Aftermarket BusinessInitiatives to strengthen for sales expansion (medium-to long-term)
2021-2023
2020
Rebuild revenue base

2024From products to services

Increasing the brand value

Strengthen productand-service business

Expand bearing refurbish business
Use of portable failure detection devices(In addition to sales of device, analysis report business)

Commercialize the condition
monitoring of customers’ equipment
by utilizing sensor technology and
IoT and grasp the demand forbearing aftermarket

Strengthen
Service response

Strengthen technical support functions in overseas sales
companies (ASEAN and India regions)Technical service units activities and technical seminars for
distributors
Further strengthen measures against counterfeit bearings

Develop and expand technical service
through the use of remote support
camerasStrengthen
Ability to supply

Maintenance available stock for aftermarket
Prioritize production capacity for aftermarket (use new IT coresystem)Expand use of overseas manufacturing sites and external
procurement

Accelerate “Made by NTN” byactively utilizing products
manufactured overseas
Strengthen the network system with
distributor and expand e-commerceStrengthen
Structure andorganization

Expand sales in growing industries through integrated response from
OEM to aftermarket
Improve profitability by short-term concentration through task force
activities for key market
Strengthen sales structure in the Middle East and Africa(A sales company established in UAE in January 2021)

Relocate automotive aftermarket's
headquarters functions to Europe
Expand sales in potential markets suchas China through the use of resourcesin Europe

Feb.10, 202112

(6) Business Segment: Industrial Machinery BusinessIndustrial machinery business<Our Vision>Company that customers rely on most for its
exceptional technological competence
Net sales and operating margin
Net salesbillion yen)(billion

Marketing environment✓ Increased demand for social infrastructure such as
wind turbines and rolling stocks✓ Increased demand for robot-related✓ Increased needs for automated machine operationand sensing✓ Competition to develop high value-added products✓ Intensified competition due to influx of low costproducts

Initiatives focusing over 3 years

Net sales related to renewable energy(Wind turbine Brg+CMS+green energy products)

Feb.10, 2021

✓ Select areas to focus✓ Improve selling price and reduce or withdraw from
unprofitable areas✓ Reduce costs by procuring materials and parts from
optimal locations (actively utilize materials from
China and India)✓ Expand sales of Wrist Joint Module “i-WRIST”✓ Expand service / solution business (CMS)✓ Expand renewable energy-related products13(6) Business Segment: Industrial machinery BusinessInitiatives to strengthen by industry (medium-to long-term)

2020

Rebuild the revenue baseCreatesectorGrow
sectorHarvestsector2024-

2021-2023

VS FY2020

Growth strategy to respond tomarket change

Robot-related
related business(i-WRIST TM)

Gain large customers
Promote acquisition of overseas certified standard

Expand overseas business

Service / solution
business (CMS)

Establish maintenance service for wind turbine
bearing and overseas expansion

Gain bearing demand byleveraging CMS technology

GearboxDevelop RV gearbox bearing
Expand sales of elastic bearings for wave motion gear

(Follow changes in the industry)

Wind turbine

Focus on capturing demand in China
Drive sales and profit increase

Machine tools

Expand sales in China and India
Utilize products manufactured by plant in Germany
in European market

Rolling stock

Promote drastic cost reductions
including local production in China

Construction
machinery

Utilize competitive materials and components
Adapt to electrification, shift to high function products

Agricultural
machinery

Expand sales of high value-added products
Expand sales of CVJ for industrial machinery

Aerospace

Withdraw from or reduce unprofitable projects
Improve profitability by concentrating productionin NTN-SNR (France)

Feb.10, 2021

Develop new applications and derivatives

Expand sales in China

Improve profitability by capturing
aftermarket

Expand production capacity

Expand CMS needs due to spread of IoT

Expand sales of bearings with sensors
Capture demands for railway network
expansion and subway in China

Follow changes in social structure andinfrastructure
Steady capture of demand forelectrification

Earn profits in MRO market
Expand sales for space industry

14(7) Business Segment: Automotive Business
Marketing environment

Automotive business

Trends in Global Vehicle Production<Vision>"Top supplier in the Power/Drive Train system "With an overwhelming speed × solution
No.1 company in proposing to make customers’
smile

EV・HEV・
Acceleration ofelectrification

Net sales and operating margin

Up to FY'26: IHS Markit
Since FY'27: NTN Forecast

Net sales(billion
illion yen)

✓

ICE

HEV

EV
Feb.10, 2021✓

Accelerate use of EVs and electrification due to the fuel efficiency
and CO2 regulations and government-led targets for electrification invarious countries➡ Supply in optimal area utilizing 's global footprints
Support Carbon-Free with higher efficiency products,
Contributing to Well-to-Wheel, and Expanding Earnings ofElectric module productIncreased demand for compact, lightweight, high-speed, low-torque,noise, and vibrations.
➡ Enhance high functional products and technological capabilities.

Initiatives focusing over 3 Years✓✓✓

Shifting to high-growth, high-profit vehicle segments
Promoting valuable cost reduction and manufacturing reforms
through variable cost reformation
Enhance price control and wind-down or withdrawal from
unprofitable segments (regions/products)15

[7] Business Segment: Automotive BusinessInitiatives to strengthen by industry (medium-to long-term)

2020

2021-2023

Promote earning improvement NOT relying on
the merit of scaleCore Products

Driveshafts
(CVJ)
Axle
bearings

Bearings

New areas(Electrification))

Feb.10, 2021

Deepen production reforms (streamlining) under way in Japan
Horizontal expansion of production reforms to global
manufacturing bases
Concentrated investment in high-performance products andautomation
Carefully select capital investments that are directly linked todifferentiation and competitiveness
Focus on enhancing cost-competitiveness with a focus on
variable cost
Develop differentiated products complying with EVs, fuelefficiency and CO2 regulations
Strengthen sales activities especially for high-performance
applications
Enhance production capacity and cost competitivenessespecially in Japan and China
Promote use of external partners on production of standard typeproduct
Increase production of gearboxes for electric hydraulic brakes
Promote cost reduction (Shorten assembly CT/ Promote
production in China / Use of Chinese materials)
Develop new products for integrated electrical modules

2024Strategy forsustainable growth

Estimated
effects by EV・electrification

Shift to large-sized SUV/PUP, EVs
Secure volume in growth markets
Advantage：Small/lightweight, highefficiency, low vibration

Develop differentiated high valueadded products
Realign portfolio by customers
and vehicle segments

Advantage：Super low friction

Invest resource in highperformance bearings throughthe selection
Advantage：Super high speed,
Ultra low friction

Expand sales of electric oil
pumps
Commercialize eHUB/ sHUB
Commercialize electric brakes

No effects,
stable growthNo effects,
stablegrowthFlat sales,
toward highperformance

Increase sales.
grow accordingly

16[8] Lower Break-even Point
Towards NTN Revitalization

１）Phase 1：Implement reduction of fixed cost after the 2nd year, FY2019２）Phase 2：Further lower the breakeven point focusing on reducing variable costs
Restrain a proportional increase in fixed costs to 15% or less and maximize scale effectDownsize or withdraw from unprofitable business and aim to increase added value
650.0
630.0

Phase 1

Break-even net sales(billion yen)

590.0
570.0
Expenses
10.7 billion
yen

Expenses
9.2 billion
yen
Personnel costs
6.9 billion yen

FY2018Feb.10, 2021

Phase 2FY2019（vs FY2018）

Personnel
costs
15.1 billion
yen
Decreasein fixed
costs
16.1billion
yen

Reduction orwithdrawal from
unprofitablebusiness

Decreasein fixed
costs
41.9 billion
yen

Variable Restrain proportionalcosts increase in fixed cost
20.0 billion
within 15% ofyenincrease inscale increase

FY2020（vs FY2018）

FY 2023（vs FY2020）17

(9) Reduce Variable Cost / Procurement Reformation
Accelerate Procurement Reformation
Achievements of reform

20.0 billion yen / 3rd year

Achievements of “DRIVE NTN100” and steady implementation of new measures
Realize the best mix of global and local procurement (optimal procurement)

DRIVE
NTN100Phase 2

Strengthen category management (by function / specialization) and implement
strategies by category
Expand and accelerate unification of contract operations(centralized purchasing)
Reorganize partner manufactures and shorten supply chain

DRIVE
NTN100Phase 1
Feb.10, 2021

Develop information on global purchasing and analyze categories(characteristics of parts / areas)
Start unification of contract operations (centralized purchasing)
Actively examine and adopt new partner manufacturers (incl. LCC)
18

(10) Control Increase of Fixed costs/ Improve Assets Turnover
Environment ：Decrease in workforce (Japan)
NTN：Declining production efficiency especially in Japan・ Optimize overall production (Improve cash flow）
・ Reduce logistics cost / inventory assets by consolidating andstreamlining bases
・ Reduce manufacturing cost by leveraging external partners andcontrol investments for renewal

Phase 2: Capital Investment Policy
1) Freeze, in principle, investment for capacity
increase
2) Invest in countermeasures for risks such as
natural disasters and safety measures3) Shift to investment for maintenance/ renewal / efficiency improvement
Under 60 billion yen/3yrs

Reorganization of Production

Production Reform Activities

Concentrate management resourcesin products / processes where NTN
can leverage its strengths

Realize streamlined production
and increase throughput

Reorganize domestic production
bases of radial bearings

Promote overall optimization (rationalization of
overall SCM) and break away from partial
optimization (rationalization by process)・Outsource production of standard type products
to Taiwanese bearing manufacturer（Break away from “self-sufficiency”）
・For special products, implement reorganization of
production with a new plant established in Wakayama
playing a central roleFeb.10, 2021

・Lead by specialized organization
・Expand lean production method horizontally
・Develop human resource to promote reforms

19Digital Technology(11) Promotion of DX (Digital Transformation)
Until FY2023（Increase efficiency / Accumulate data)

From FY2024

New
1. IT coresystem・Strengthen responsiveness to market changes
by “visualization” of sales / production /procurement / logistics, and optimize inventory
・Promote utilization of inventory within NTN
GroupIntegrate data

Businessreform with
2. digitaltechnology

・RPA: optimize routine operations, and go paperlessfor reports, utilizing IT core system
・CAE: Streamline development / trial production /analysis・Introduce communication tools compatible withthe workstyle reform

3. Promotesmart factory

・Launch of a new plant in Wakayama
・Optimize production by introducing IoT and AI into production process
・Realize streamlined production by “visualization” of process condition

4.

CMS(Condition
Monitoring
System)Feb.10, 2021

Sales / production /procurement / logistics/ finance / process / CMS
Integrate accumulated data

Upgrade businessadministration
Create new businessex) Environmental business（to adapt to “carbon neutrality”), etc.

・Monitor operating condition of wind turbines, rolling stocks, etc.
・Predict breakdowns in advance by using AI

20

(12) Major Management Indicators of “DRIVE NTN100” Phase2
OperatingmarginTarget of net sales and operating income

Net sales(billion yen)

FY 2023 (last year of Phase 2)

700.0 or
more
AM
Ind.

Net sales: 700.0 billion yen or more
Based on net sales 652.0 billion yen in FY2019,
aim for achieving the growth for 3% of net sales
for 3 years

Auto

Operating income: 42.0 billion yen or more
(Operating profit :6% or more)
Other Management Indicators

COVID-19「DRIVE NTN100」

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Dividends: Aiming to resume dividend payments from the second (FY2022) interim dividends of Phase2
Figures in brackets of Net D/E ratio and Equity to capital ration are the figures when taking into account a partof the subordinated bonds through public offering that is recognized as equity(50%) .

21

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1717UDQVIRUPDWLRQIRU1HZ\HDUV• This presentation material, our statements made during the presentation, and our comments made during the subsequent Q&A session include forward-looking
statements about our future performance and business strategies. These statements and comments are made based on the information currently available andat the discretion of our management.
• These statements and comments based on future forecasts do not guarantee our future performance. Please understand that actual results may differ from ourperformance forecasts depending on various factors such as changes in demand for our products, exchange rates, interest rates, and contingent liabilities.

Feb.10, 2021

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