NTN Corporation
New Medium-Term Management Plan Announcement
May 31, 2024

Event Summary[Company Name]NTN Corporation[Company ID]

6472-QCODE[Event Language]

JPN[Event Type]

Medium-Term Management Plan Announcement[Event Name]

New Medium-Term Management Plan Announcement[Fiscal Period][Date]

May 31, 2024

[Number of Pages]

38[Time]

14:00 – 15:19(Total: 79 minutes, Presentation: 28 minutes, Q&A: 51 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

8
Eiichi Ukai
Hideaki Miyazawa

Masaaki Yamamoto
Shumpei Kinoshita

Yoshiyasu Nakano
Etsu Harima
Tatsuo Nagao

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Director, Representative Executive Officer,
President, Executive Officer, CEO
Director, Representative Executive Officer,
Executive Officer, Corporate General
Manager, CVJ & Axle Bearing Business HQ
Director, Executive Officer, CFO
Director, Executive Officer, Deputy
Corporate General Manager, GroupManagement HQ
Executive Officer, CTO (Chief Technology
Officer)
Executive Officer, Corporate General
Manager, Bearing Business HQManager, Corporate Communications
Department, Group Management HQ

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1[Analyst Names]*

Kazuhisa Kouge

Corporate Communications Department,Group Management HQ

Hirosuke Tai
Tomohiko Sano
Tsubasa Sasaki
Tatsuhiko Ito

Daiwa Securities
JPMorgan Securities
Morgan Stanley MUFG Securities
Mizuho Securities*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or
whose questions were read by moderator/company representatives.

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Presentation
Nagao: Now that the time has arrived, we will begin the briefing on NTN Corporation's new medium-term
management plan. Thank you all very much for taking time out of your busy schedules today to participate in
the presentation of our new medium-term management plan.
First, let me introduce the attendees.
Ukai, President and Chief Executive Officer.
Ukai: This is Ukai. Thank you for your cooperation.
Nagao: Yamamoto, CFO, Executive Officer.
Yamamoto: I am Yamamoto. Thank you for your cooperation.
Nagao: Miyazawa, Executive Officer and Corporate General Manager of the CVJ & Axle Bearing Business HQ.
Miyazawa: My name is Miyazawa. Thank you for your cooperation.
Nagao: Nakano, Executive Officer and CTO.
Nakano: My name is Nakano. Thank you for your cooperation.
Nagao: Kinoshita, Executive Officer, in charge of Group Management HQ.
Kinoshita: This is Kinoshita. Thank you for your cooperation.
Nagao: Harima, Executive Officer and General Manager of the Bearing Business HQ.
Harima: My name is Harima. Thank you for your cooperation.
Nagao: I, Nagao, and Kouge of the Corporate Communications Department, will serve as today's secretariat.
Thank you for your cooperation.
Kouge: Thank you very much.
Nagao: Today's briefing will follow the briefing materials that we distributed to your pre-registered e-mailaddress. The documents are also available on our website, if anyone does not have them, please confirm it.
Today, President Ukai will first review the previous mid-term business plan and explain the new mid-termbusiness plan, followed by CFO Yamamoto's presentation on achieving management that is conscious of thecost of capital and stock price. After the presentation, a Q&A session will follow, with the meeting scheduled
to end at 3:30 PM.
Please note that the press, analysts, and institutional investors are invited to attend this briefing, and we willseparate the Q&A session for analysts and institutional investors from the press.
Now, we will begin our explanation. President Ukai, please go ahead.

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Ukai: Once again, my name is Ukai. Thank you all very much for taking time out of your busy schedules today
to attend the briefing on our new medium-term management plan.
See page two.
I, Ukai, will explain items one through four, and Mr. Yamamoto, CFO, will explain item five, "Management thatis conscious of the cost of capital and stock price."

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4See page four. This is a review of the three-year mid-term management plan, DRIVE NTN100 Phase 2, up to
last fiscal year.
Although the Group celebrated its 100th anniversary in 2018 and set a policy to accelerate the transformationof its business structure for the next 100 years, business activities stagnated due to the economic slowdown
triggered by the US-China trade war as well as the spread of COVID-19. Profit margins declined, free cash flow
fell, and the financial position deteriorated rapidly.
Therefore, in “DRIVE NTN100” Phase 2, which began in the fiscal year ended March 31, 2022, we have notchanged our policy of accelerating the transformation of our business structure, but have continued to
improve profits and strengthen the financial position of existing businesses. However, in the automotive
business, which accounts for 70% of our sales, the prolonged shortage of semiconductors had a significant
impact on our group's performance.
In the final year of “DRIVE NTN100” Phase 2, sales exceeded the target, partly due to the elimination of thesemiconductor shortage and the effect of the weaker yen.
On the other hand, we were unable to achieve our operating income margin target of 6% due to delays inscaling back or withdrawing from unprofitable businesses and in optimizing fixed costs in response to demand
fluctuations in North America and Europe, which account for approximately 50% of our total sales.

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5See page five. This is a comparative analysis of goals and actual results by business.
In both the aftermarket and industrial machinery businesses, price optimization progressed, including thepassing on of cost increases, and with the tailwind of foreign exchange rates, we achieved our profit margin
target ahead of schedule in the second year of the fiscal year ended March 2023, achieving record-high sales
and operating income.
In the third and final year of the plan, the fiscal year ended March 31, 2024, the slump in the industrial
machinery market affected both the aftermarket and industrial machinery businesses, causing their profit
margins to decline for the full year compared to the previous fiscal year. However, as shown in the graphbelow, we steadily recovered each quarter, and from Q3 onward, we again exceeded the profit margin targetsof the medium-term management plan.
The automotive business had been posting operating losses until the fiscal year ended March 31, 2023, butwith the semiconductor shortage resolved in the fiscal year ended March 31, 2024, the volume of products
increased, and the cost increase was passed on to selling prices, resulting in an improved profit margin eachquarter and an operating profit for the full fiscal year.

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6See page six. A review of the main measures will be explained.
Procurement reforms included the hiring of new suppliers in India and Korea, which contributed to improved
profits in the automotive business and the Americas. Going forward, we intend to increase our costcompetitiveness by involving our engineering and design departments to come up with ideas that are notbound by conventional standards.
In strengthening the aftermarket business, we were able to achieve our sales and operating income targets,but further business expansion will require such measures as strengthening supply capacity.
In the promotion of production restructuring, although we proceeded with the outsourcing of bearing
production, there were delays from the original plan. In the future, production will be reorganized according
to the markets in each region.
In the area of accelerating R&D and commercialization of new products, we were able to develop and launch
new products such as the High Efficiency Fixed Yype constant velocity joint "CFJ" for automobiles, which are
increasingly being shifted to EVs. On the other hand, challenges remained in the development of new productsthat would lead to new commercialization.
In the area of productivity improvement through the use of digital technology, we have completed therenewal of our core IT system. At the same time, the challenges are to generate profits through operational
reforms using the new system and to horizontally expand the Smart Factory being promoted at the newest
Wakayama Works.
With respect to strengthening our financial position, we were able to improve our net debt-to-equity ratio
and equity ratio by generating cash flow through the sale of almost all of our cross-shareholdings, curbing
investments, and improving profits.

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7See page seven.
Looking back over the past years, the biggest challenge for the Group is to strengthen its earning power, thatis, to improve its operating margin and inventory turnover ratio.

See page nine.
The external environment is more uncertain than ever before, and competition in the marketplace continues
to change.
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On the other hand, as global warming and its effects are becoming more visible, the roles and responsibilities
of corporations are becoming even greater.

See page 10.
By practicing our corporate philosophy of "We shall contribute to international society through creating newtechnologies and developing new products," our group aims to contribute to solving social issues surrounding
the world and to realize a "NAMERAKA Society" where people can live in harmony with nature and in peaceof mind and prosperity.
In order to realize this "NAMERAKA Society," we have set a new long-term vision for the year 2035.
In our vision for FY2035, we will enhance our corporate value by improving both economic value andenvironmental and social value together with our group's stakeholders.
In terms of economic value, we will work to achieve ROE that consistently exceeds the cost of shareholders'equity even during economic fluctuations, and to further improve ROE, we will work to reform our businessstructure so that the aftermarket business accounts for more than 40% of our sales.
In terms of environmental and social values, we will achieve carbon neutrality in Scopes 1 and 2.
In addition, we will foster an organizational culture that works to improve economic, environmental, andsocial value, and aim to develop a diverse workforce with a sense of fulfillment in their work, thereby realizing
the creation of a prosperous human resource.

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9See page 12.
By back casting from the long-term vision of FY2035 and simultaneously forecasting from a review of the past,
we have formulated a new three-year medium-term management plan, "DRIVE NTN100" Final. We named
the plan "DRIVE NTN100" Final because of our strong determination to improve earning power and tocomplete the revitalization of NTN, which was not accomplished in the previous medium-term management
plan.
Since past capital investments, etc. no longer fit the current market environment, resulting in stagnant
business, we will complete structural reforms over the next three years, first aiming to achieve ROE of 8%,
which we were unable to achieve in Phase 2.

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10See page 14. This section shows the management objectives of the "DRIVE NTN100" Final.
We plan a decrease in net sales due to structural reforms and an assumed appreciation of the yen comparedto the most recent exchange rate, while expanding our aftermarket business.
On the other hand, operating income and inventory turnover ratio will steadily improve every fiscal year.
As for extraordinary income/loss, we will book most of the restructuring costs in the first two years, and in
the third year, we aim for net income of JPY21.5 billion and ROE of 8%.

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11See page 15.
Effective April 1, 2024, we have changed our organization from the current market-oriented to a productoriented structure in order to expand our aftermarket business and promote responses to changes in theindustrial structure, electrification, and the shift to EVs.
We will consolidate our dispersed bearing business, strengthen our service and supply capabilities, and aim
to generate profits by integrating aftermarket and OEM operations.
CVJs and axles will also be concentrated as product axes to respond to new needs such as electrification andto build a muscular business foundation.
Currently, sales to the aftermarket business account for 17% of total sales, but we aim to increase this to over
20% by FY2026 and to 40% by FY2035.

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12See page 16. The graph shows the sales and operating profit targets for the past three years for each of the
new business forms.
For bearings and others, we plan net sales of JPY370 billion, operating income of JPY29 billion, and an
operating margin of 7.8% for the fiscal year ending March 31, 2027, mainly incorporating the expansion of theaftermarket business.
CVJ & Axle plans net sales of JPY460 billion, operating income of JPY21 billion, and an operating margin of
4.6% in the third year by shifting to more profitable business areas and downsizing unprofitable businesses,
while continuing to improve its structure through structural reform.
From FY2027 onward, we will further grow the business by improving the sales mix by increasing the ratio of
high-value-added products such as CFJ for battery EVs and large, high-angle CVJ.

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13See page 17. The following chart shows the basic strategies and key measures of "DRIVE NTN100" Final.
What I have repeatedly communicated within the Company as a mindset for taking on the challenge oftransforming the business structure is the "SQCCD" approach to work and the "NTN-driven," based on thepremise of customer-first.
By spreading these ideas and mindsets throughout the Group, the entire company will work together toreform the business structure.
We will now describe each of the measures in detail on the pages that follow.

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14See page 18. The first important measure is to expand the aftermarket business.
What is needed here is the ability to respond immediately without stopping the customer's machine or plant,
and to provide engineering solutions considerate of customers to solve problems.
In order to improve the promptness of supply, we have been outsourcing production to overseas partner
manufacturers, and we will further expand this trend. In addition, while production capacity for theaftermarket business has been insufficient in the past, we will optimally allocate production capacity throughintegrated operations with OEMs starting this April, and promote the expansion of our best-selling inventory.
For engineering solutions, OEMs and the aftermarket will work together to develop a system to support andservice the bearing lifecycle from start to finish. In the automotive aftermarket business, we will expand sales
mainly in Europe and the United States, and also strengthen marketing in China, ASEAN, the Middle East, andAfrica.

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15See page 19. The second important measure is to strengthen the competitiveness of the OEM business.
Here, we will work on structural reforms, as it is necessary to optimize fixed costs in line with market
conditions and demand.
Following the closure of the CVJ site in South America, we will improve asset efficiency by reorganizing
production in the Americas, Europe, China, and Japan.
In addition to the development and expansion of the use of competitive partner manufacturers that we havepromoted in the past, we will also increase the effectiveness of cost reduction by reviewing designs andmaterials based on ideas not bound by conventional thinking, while satisfying customers' required
specifications.
It is also important to respond to electrification, which has taken the lead in the automotive industry and isspreading to industrial machinery. We will develop new products that meet these market needs, propose
them to our customers with speed, and introduce them to the market. Some of these new products havealready been adopted by customers, and further expansion of these products will contribute to improved
profits in the overall OEM business.

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16See page 20. The third important measure is to create new products and foster new businesses.
Until now, functions such as planning and development of new products, engineering, and manufacturing
have been specialized through the division of labor. In April of this year, we established a new organization,
Innovation & Business Development HQ. , which will be responsible for all of these functions in one place, andwill simultaneously carry out multiple processes in order to accelerate the speed of development whilebalancing quality, cost, and delivery time.
In addition, NTN will accelerate the discovery and utilization of cutting-edge technologies and thedevelopment of human resources through collaboration with external research institutions such as the NTN
Next Generation Research Alliance Laboratory.
With this structure, we will strengthen the development of new module and system products and promote
their commercialization.

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17See page 21. The fourth important measure is to promote value chain reform.
In addition to reforms in SCM areas such as procurement and production, which we have been working on,
we will promote reforms in the entire value chain by expanding the scope to include design and quality areas.
In the area of quality, we will develop and expand the NTN brand quality management system for external
procurement and outsourced production, which will expand in the future.
In the design area, we will promote manufacturing methods and procurement of parts and materials that
contribute to cost reduction by reviewing conventional design concepts and ideas while meeting customers'
required specifications.
By promoting these reforms throughout the value chain, we will support the expansion of the aftermarket
business and the strengthening of the competitiveness of the OEM business, as mentioned earlier.

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18See page 22. The fifth important measure is the use of digital technology to generate profits.
We will enhance the functionality of the revamped Japanese core system, develop a data-driven environment,
and improve operational efficiency and reduce operational costs through advanced digital technologies suchas generative AI.
To accelerate these measures, we will work to strengthen digital human resource development andinformation security. In particular, cyberattacks are a serious management risk, and we will continue
strengthening information security from both hardware and software perspectives, including measures within
our plants, products, and supply chain as a whole, as well as employee training.

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19See page 23. ESG management initiatives will be explained here.
On the environmental front, in May of last year, we announced our goal of achieving carbon neutrality by
FY2035 for Scope 1 and Scope 2, and by FY2050 for Scope 3, which covers the entire supply chain.
As we promote carbon neutrality globally, we have established a roadmap with CO2 emission reduction targets
for each region by FY2035. In accordance with this roadmap, we will continue to make necessary investments
while making reductions.
Next is the social side of the project.
We are committed to promoting diversity, that is, creating a rewarding work environment that respects thediversity of our employees.
Finally, there are governance initiatives.
The Company transitioned to a Company with a Nominating Committee, etc. in 2019 and has been working
to strengthen management oversight and transparency ever since.
Since June 2022, a female outside director has been appointed as chairperson of the Board of Directors, which
supervises the executive bodies.
At ESG briefings, we actively engage in dialog with our stakeholders, with top executives from both theexecutive and supervisory sides explaining the Company's initiatives from their respective perspectives.
We will continue to strengthen our ESG management.

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20See page 24.
This page summarizes the key measures we have described so far with respect to bearings and others.

See page 25.
As with the previous page, this one is also a summary of the CVJ axle, so we will skip the explanation.
That is all from me.
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Nagao: Thank you, President Ukai.
Continuing on, CFO Yamamoto, please explain the points in section five regarding cost of capital and stock
price conscious management.

Yamamoto: I will explain from here.
See page 27. Our cost of shareholder's equity and WACC estimates, as well as our ROE and ROIC results andtargets.
At the top of the table is the cost of shareholders' equity, which we estimate at 10% to 12%, based oninterviews with capital market participants.
As for the WACC in the middle row, it is estimated to be around 6%.
The blue line graph shows ROE, and the red line graph shows ROIC. The ROE and ROIC for the fiscal year ended
March 2024 are 4.4% and 3.2%, respectively, below the cost of capital.
Under the new medium-term management plan, we aim to steadily improve ROIC every fiscal year, with atarget of 6% in the fiscal year ending March 31, 2027. On the other hand, ROE will decline during the first two
years of structural reform, but we aim to achieve 8% in the fiscal year ending March 31, 2027, and 10% as
early as possible in the next medium-term management plan.

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22See page 28. This is the cash allocation for the three years of the new medium-term management plan.
While we curbed investments in the previous medium-term management plan, in the new medium-term
management plan, we plan to make investments that lead to structural reforms and business growth to theextent that they are almost equal to the total amount of depreciation and amortization.
Cash inflow on the left side is planned to be JPY200 billion, consisting of JPY180 billion in operating cash flow
and JPY20 billion in reduction of cash and deposits, and cash outflow on the right side is planned to be JPY200
billion, consisting of JPY120 billion in investing cash flow, JPY60 billion in reduction of interest-bearing debt,
and JPY20 billion in return to shareholders.

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23See page 29. This is our shareholder return policy and our dividend.
Under the previous medium-term management plan, we were able to resume dividend payments in thesecond year, starting in the fiscal year ended March 31, 2023. For the current fiscal year ending March 31,
2025, we plan to pay interim and year-end dividends of JPY5.5 each, for an annual dividend of JPY11.
Under the new medium-term management plan, based on the policy of stable and continuous dividend
payments, we will set DOE at 2.5% as a lower limit as a general guideline, although there are some foreignexchange assumptions, and target DOE of 4% after the completion of the medium-term management plan.

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24See page 30. The measures and targets described so far are described for each of the elements that break
down ROE in order to improve ROE.
The Group's top priority is to improve profitability and asset turnover. We aim to resolve this issue and achieve
an ROE of 8%. We will also strive to reduce the cost of capital through enhanced dialog with stakeholders.
We appreciate the continued support of our shareholders, investors, and other stakeholders.
That is all from me.
Nagao: Thank you very much, CFO Yamamoto.

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Question & Answer

Nagao [M]: We will now open for questions.
We would like to spend about 40 minutes now with analysts and investors, followed by questions from thepress. During the Q&A session, the secretariat will designate the person with questions.
So, first of all, analysts and investors, please ask your questions.
Mr. Sasaki of Morgan Stanley MUFG Securities, please go ahead with your questions.
Sasaki [Q]: My name is Sasaki from Morgan Stanley. Thank you very much for your time today. Thank you foryour cooperation. I would like to make three points.
The first question is the concept of business profit by segment. If you look at slide number 16, I believe oneof the key points of this medium-term plan is on this slide. I think if you could tell me a little bit about thisslide, whether it is bearings or CVJ axles, CVJ axles in particular have increased profits despite the fact thatsales are projected to decrease. While sales are not expected to increase much for bearings, the profit margin
is expected to improve significantly.
Normally, in the manufacturing industry, a decrease in sales would result in a decrease in marginal profit,
which would mean that the company would face a difficult situation in terms of profit. I would like to knowwhat the logic and structure of your company's profit improvement is based on the assumption that sales will
either decrease or not increase.
Ukai [M]: Thank you very much. Since Miyazawa and Harima, who are in charge of this part are here today, I
would like to have Miyazawa answer about CVJ axles and bearings and others from Harima, respectively. Best
regards.
Miyazawa [A]: My name is Miyazawa.
I would now like to explain a little about CVJ axles.
As Mr. Sasaki just pointed out, looking at the next three years, the top line is unfortunately expected todecrease in size, but this result is the result of the past three years of business competition. This is the resultof our efforts over the past three years to shift to a high-profit zone, mainly by downsizing and withdrawing
from unprofitable businesses. Looking at the past three years and the next three years, there will certainly bea decrease in the size of the top line, but the product mix will improve considerably. In this sense, the top line
will be slightly lower, but the profit will improve accordingly.
Harima [A]: Next, I will explain about bearings and others.
This time, the bearing business is shown in a bar graph and a line graph, with the automotive, industrial
machinery, and aftermarket segments added together. In the near term, the situation for the current fiscal
year is that although demand for automobiles is firm, demand for industrial machinery and the aftermarket
is not so good. In this situation, the automotive business is not earning operating income. Although the top
line is on the positive side, operating income has fallen a little.

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From the next fiscal year onward, we will improve profits from automotive bearings, including recovery inindustrial machinery. We will aggressively proceed with cost reductions and pass on the higher costs to selling
price to our customers, so we are forecasting a steady increase in operating income.
Sasaki [Q]: Thank you very much.
I would like to ask you, Mr. Miyazawa, if I understand correctly, that your company has been working to win
orders with an emphasis on profitability. In that sense, would it be correct to say that the improvement of themodel mix in the automotive parts business is highly visible?
Miyazawa [A]: Miyazawa will answer. Thank you for your question.
As Mr. Sasaki just pointed out, as I explained earlier, we are withdrawing from unprofitable businesses inSouth America, and we are restructuring or adjusting areas, especially in Europe and Americas, where we are
not making good profits, to achieve this kind of change in the mix.
Sasaki [Q]: I understand. Thank you very much.
Second, what is your approach to aftermarket business? As you can see from the review of management
measures mentioned by President Ukai at the beginning of this presentation, the evaluation was neutral, andthe aftermarket business will increase by 20% in the final year, as shown on page 15. Why is there a highprobability that aftermarket sales will grow during the three years of the new medium-term management
plan, and what additional initiatives will you take to expand aftermarket sales? Could you elaborate a little
more on your thinking on this?
Ukai [A]: Ukai will answer your question.
First of all, let me tell you why we have replaced the bearings and other products business. In particular,
bearings account for almost 70% of the aftermarket and other products for industrial machinery, but until
March, there was no manufacturing unit under the Aftermarket Business Division in our organization. By
looking at both OEM customers and aftermarket customers through the product of bearings, we will be able
to control sales and manufacturing in a single integrated manner. One of the ways we intend to change themix in the future is to achieve the best mix within this single business.
There are two major conditions that must be met in order for the aftermarket business to grow. One is interms of availability, and that is to strengthen our global immediate delivery system. We have already begun
this process, and we will further strengthen our global immediate delivery system by maintaining a certain
volume of what we call "FIRST" inventory of standard products as a buffer for our best-selling products.
The other is solutions. In order to increase the strength of our brand in the market, we must improve oursolutions to our customers' problems. This is not something that can be done overnight, and requires thestrengthening of our technical service network, including our distributors. Through recruitment, training, andthen experience, we will instill this in our customers.
In our explanation today, I think there is a question as to whether it will take that long to achieve theaftermarket sales ratio of 17% to 20% in three years, and 40% in 10 years from now. In particular, the latterpart, providing solutions to increase brand value, will also take time. However, we have made thisorganizational change based on the expectation that by doing so, we will be able to further improve theoperating profit margin in the aftermarket business and at the same time increase the sales ratio, which willlead to an improved profit structure.
Sasaki [Q]: Thank you very much.
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I would like to confirm this with President Ukai, but I believe that in the past, NTN wanted to increase theaftermarket service, but the aftermarket service did not increase because the OEM took over the production
and the capacity of the aftermarket. I believe that this was the case in the past. However, as President Ukai
mentioned, the organizational restructuring this time has added capabilities under the Aftermarkte Division,
so I wonder if we can confirm whether we can assume that NTN will be able to really produce products in the
Aftermarket Division.
Ukai [A]: As Mr. Sasaki just mentioned, the premise for this is that we have been an OEM-oriented company
for 100 years, and we have been trained in technical and various aspects by our OEM customers, which is why
we are where we are today as a manufacturer. It means that we can make our technology more responsive
depending on the OEM customer. The second is that we need to develop the production capacity to be able
to buy certain quantities. We will continue to firmly respond to these two demands from our customers.
However, we will gradually shift the product mix from OEM customers to the aftermarket. In other words, as
I mentioned earlier, by increasing the ratio of the aftermarket while maintaining the two strengths ofimproving technology and maintaining and improving production capacity, we will be able to respond to thesales price in the aftermarket while maintaining a cost structure that can respond to OEM customers. This will
enable us to increase our margins in the aftermarket business.
Sasaki [Q]: Thank you very much.
Finally, as to my third point, I believe that one of the goals of the medium-term plan is the inventory turnoverratio. This has been an issue for some time, and I believe it has been difficult to improve. However, what
exactly is different in the new medium-term business plan from the past that will improve the inventory
turnover ratio? I wonder if you could share your thoughts on this point with us. That's all from me.
Ukai [A]: As related to pages 17 and 21, three years ago, we started what is commonly known as "Just in TimeManagement" or production based on pull information in order to firmly reduce in-process inventories in our
manufacturing processes in order to achieve cash flow management. This is what we internally call production
reform. This is the third time we have tried this, and we are now moving forward with a strong determination
not to stop until we have fully completed the process. By doing so, we will first reduce the amount of work inprocess in the manufacturing process, thereby increasing the cash flow and throughput of our in-housemanufacturing process.
At the same time, we will work together with our partner companies and suppliers in the front-end processesof our value chain. This will allow them to manufacture products based on information pulled from us andstrengthen the management of work in process in the logistics process, which has not been handled well in
the past, before and after the product is shipped from the factory until it reaches the customer. For example,
for overseas factories, parts are sent from Japan, so some parts are shipped, and for example, in the US, someparts are shipped to the West Coast and then transported overland by rail or truck. We are planning tostrengthen our management of these items to bring them to the best possible condition.
However, there are many disturbances out there. Logistics lines will change due to strikes at ports, railroad
strikes, or, as is happening this time, problems with the Suez Canal and the Panama Canal, etc. From theperspective of various BCPs, how much safety rate to watch and how to respond are matters that areforeshadowed in various ways. We need to think about this.
Therefore, although it is not an easy task, we are working on how we can achieve cash flow management
throughout the entire value chain, from the before and after where NTN gets involved, from the purchase ofmaterials, to the delivery of products to customers. We will continue to make sure that this also continues in
the future. I believe that we will gradually reap the rewards of these achievements from now on.

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Sasaki [M]: I understand very well. Thank you very much.
Nagao [M]: Thank you very much, Mr. Sasaki.
Please continue with your question, Mr. Sano of JP Morgan Securities.
Sano [Q]: My name is Sano from JPMorgan. Thank you.
First of all, I understand that you are planning a negative JPY30 billion in extraordinary gains and losses,
including structural reforms, over the next three years. Please tell us about the main uses of each type ofmoney and whether the minus JPY5 billion in the fiscal year ending March 31, 2027 will be the final amount,as the theme of the medium-term plan suggests.
Yamamoto [A]: Yamamoto will answer your question.
First of all, regarding structural reforms, it is very difficult to provide details, but I will explain the framework
by region.
First of all, as you know, the profit margin in the European region is still not very good. Looking ahead, we
expect that the entry of Chinese capital into the European market will prevent a significant increase in our
automotive sales in the future. In order to strengthen our cost competitiveness, we plan to consolidate ourmanufacturing bases in Germany and France, where labor costs are high, and to transfer our operations toEastern Europe, where we have a business site in Romania. At the same time, we plan to invest in things suchas aircraft and linear motion, which have high profit margins. These are about our business in Europe.
Next is the Americas, where cost competitiveness is still a major issue. In order to strengthen our costcompetitiveness, we will continue to firmly promote global procurement of semi-finished products and parts,
as I have explained in the past. In line with this, we are planning to downsize and consolidate some of the preprocesses that we have in-house.
In China, as you know, Chinese automakers are already dominating the EV market, and the slump of Japanese
automakers is becoming apparent. Since exports from China to Europe are possible, the surplus production
capacity will be used for the time being to export semi-finished products to Europe, etc., but we believe that
it will be necessary to integrate production bases.
Lastly, in Japan, the declining population is gradually making it more difficult to recruit, and the nature ofbusiness is also changing. Under such circumstances, it is still necessary to reduce the scale of production of
unprofitable businesses. Specific plans will be developed in the future, but we will formulate and implementa plan that includes the consolidation and elimination of locations.
The Company will set a policy for them for the current and next two years, and will record losses there. The
last year is to account for the portion not placed there, so we are projecting JPY5 billion for the final year,
then JPY8 billion for the first year, and JPY17.5 billion for the fiscal year ending March 31, 2026.
Sano [Q]: Thank you, Mr. Yamamoto.
The second point I would like to ask President Ukai. I would like to ask you about your outlook for theaftermarket business to account for 40% of your total sales in FY2035. I am aware that bearing and automotive
parts manufacturers have been working to expand their aftermarket business for a long time, and I think that
there is a trend that some of them, including your company and other leading overseas manufacturers, arere-emphasizing the expansion of the aftermarket business. If there are any obstacles to this, what are they,

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29and what are NTN's important efforts to address these risks in its renewed efforts to expand the aftermarket
business?
Ukai [A]: Thank you very much.
In order to increase our aftermarket business to 40% of our total sales in 10 years, we have been working toincrease the supply capacity of parts and products, mainly for aftermarket, since last year. However, that is
not enough at all. We have already started purchasing bearings under our own brand name from overseas
bearing company with which we have a technical tie-up, as we have been doing since last year. We have also
started to purchase products with our brand name from other companies that can ensure the quality andtechnology of their products. In order to increase our supply capacity, which we have not been able to do sofar, our issue is how to increase the additional production besides our own production, and I think our biggest
challenge is to expand sales while gaining the understanding of our customers regarding such changes in
production routes. However, we are now working on a firm plan for this and will do so sequentially, so we
believe we can overcome this challenge.
Sano [Q]: I understand.
I would like to ask additionally, if the aftermarket business expands, is it correct to assume that the concept
of inventory turnover and concept of turnover that you have set forth for this fiscal year, next fiscal year, andthe fiscal year after that, if we go to 2035, will also change the way the balance sheet is used?
Ukai [A]: For example, if we were to accumulate JPY250 billion in inventories now, more than half of it would
be work in process. As I explained earlier, semi-finished goods in process, including logistics, account for the
majority of the total. In this context, we believe that appropriate inventory that is truly necessary to grow theaftermarket should be held as strategic inventory, rather than the other way around.
Whether this amount is JPY10 billion or JPY15 billion, for example, may vary slightly depending on the time ofyear, but we will continue to strengthen our activities to secure minimum inventories at all times while
securing inventories of finished goods that will not cause loss of sales, while reducing inventories of work inprocess and semi-finished goods. In this scenario, the total inventory reduction will remain unchanged in thebalance.
Sano [Q]: Thank you very much.
One last point, please. I feel that the track record of the medium-term plan so far has not necessarily beenhigh, although I believe it has been affected by the external environment. On the other hand, in terms of theway compensation is linked to business performance and governance that leads to the creation andimprovement of corporate value, we would like to know if you have any ideas on how to strengthen
governance in such areas as creating a mechanism to link the compensation of directors to the stock price.
Ukai [A]: Thank you very much.
As mentioned in our earlier explanation, we became a Company with a Nominating Committee etc. in 2019.
There are three committees within it. These three are: the Nominating Committee, the Compensation
Committee, and the Audit Committee. The Compensation Committee is in the process of thoroughly
discussing the performance-linked remuneration for directors that you just mentioned, and although wecurrently have a performance-linked system, we will review this ratio and take other measures to strengthen
governance.
I cannot discuss specifics at this time, but we are working together with outside directors on this committee
to strengthen governance, especially since they make up the majority of the committee.
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Sano [M]: Thank you very much.
Nagao [M]: Thank you very much, Mr. Sano.
Now, Mr. Ito of Mizuho Securities, please continue with your question.
Ito [Q]: My name is Ito from Mizuho Securities. Thank you for your explanation. There are two main questions.
As to the first question, what I would like to confirm with this Q&A or briefing material is that I would like to
ask how much lower fixed costs and costs will contribute to profits. In the case of bearings and CVJ axles, I
think it is on page 16, but in the case of CVJ axles, I would like to know how much cost reduction effect will be
added to the profit if you take the measures that have been mentioned in the Q&A session, etc., in responseto the fact that sales have not increased much and profit has remained flat.
Yamamoto [M]: CFO Yamamoto will answer.
As a comparison, may I give you the rough amounts as a comparison between FY2023, FY2024, and the final
year?
Ito [M]: Yes, please.
Yamamoto [A]: First of all, the proportional cost effect is considerably larger for CVJ axles. As I have explainedin the past, we expect to add about slightly over JPY8 billion to the CVJ axle business by changing the forging
process and others.
We also estimate that the cost of bearings and others will be approximately less than JPY4 billion.
Next, in the area of fixed costs, I have already mentioned that we will restructure our business in the Americas
and Europe. Including this effect, CVJ Axle expects a profit increase factor of over JPY5 billion.
On the other hand, in bearings and others, we expect a decrease in profit of less than JPY3 billion, including
the investment of human resources to expand sales for aftermarket . Then, the question arises as to why
profit from bearings will increase. However, we expect an increase of about JPY10 billion at the selling pricelevel, including an increase in the aftermarket ratio.
That is all.
Ito [Q]: Yes, I understand. So there is no particular selling price effect on CVJ's part?
Yamamoto [A]: In the first year, we expect to take up the amount that we could not take up in the previous
year, which is approximately less than JPY5 billion.
Ito [Q]: I understand. Thank you very much.
I would like to ask you an additional question. With the change in the product axis, I believe that it will be
divided into the aftermarket, industrial machinery, and automotive segments. But in the end, in terms ofbearings and other segments, in terms of increasing performance and profits over the next three years, if you
divide them into aftermarket, industrial machinery, and automotive, what kind of sales, or rather profits, doyou imagine will grow?
Yamamoto [A]: We have not given a breakdown of the conventional breakdown of automotive and industrial
machinery, for example, but as I mentioned earlier, we will increase the total aftermarket ratio from thecurrent 17% to over 20%, and the majority of this will be contributed by bearings.
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Ito [Q]: I understand. Thank you very much.
My second question is regarding each market, I would like to confirm how your company can penetrate theselling price. I have been looking at page 24, and I understand that you are trying to capture the aftermarket.
However, if you look at, for example, construction machinery, agricultural machinery, and aircraft by market
environment, please tell us if there are any areas where you expect to see further growth or improvement insales prices over the next three years.
Harima [A]: I, Harima, who is in charge of bearings, will answer your question.
If I may talk a little bit about each industry, as you can see at the bottom, the ratio of sales to total sales is still
overwhelmingly dominated by automobiles. As I mentioned earlier, as the shift to EVs continues, the mix ofproducts in the market will change significantly, and the future strategy for automobiles is to introduce
products with higher added value and competitive advantage to the market.
We are also focusing on construction machinery and gear box, which are our strongest industrial machinery
products, and these are areas where the customers mainly rely on robots. In these areas, we are alreadyfocusing on how to lower costs, especially proportional costs. Over the next three years, we will work to createa more profitable structure.
In addition, we will make further efforts to increase our market share in areas that have traditionally been
profitable, such as rolling stocks and machine tools.
We are going to increase the percentage of aftermarket business, and since it is a business where operating
margin exceeds 15%, we believe that we are making efforts to increase the percentage here.
Ito [M]: Thank you for your explanation. That's all from me.
Nagao [M]: Thank you very much, Mr. Ito.
Are there any other questions from analysts or investors? Any? Thank you very much.
Now, Mr. Tai of Daiwa Securities, please ask your question.
Hirosuke Tai [Q]: My name is Tai.
First, I would like to ask Mr. Yamamoto. I am a little confused about the breakdown of the increase/decreasein profit that you gave in your previous explanation. I think you said that CVJ's proportional cost was plus JPY8
billion and the selling price was plus JPY5 billion. Can you tell me what the another JPY5 billion was from?
Yamamoto [A]: That is fixed cost.
Hirosuke Tai [Q]: Is this also a plus JPY5?
Yamamoto [A]: Yes, it is. As I mentioned earlier, we will also be implementing structural reforms, so we areconsidering eliminating various fixed costs there.
Hirosuke Tai [Q]: That would give a total positive effect of JPY18 billion, but when was this compared to? Is
this in contrast to last year?
Yamamoto [A]: It is a comparison between FY2023 and the final year.

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Hirosuke Tai [Q]: I understand. So, would it be JPY28 billion, and then minus JPY7 billion in other miscellaneous
items, which would bring the total to JPY21 billion?
Yamamoto [A]: It contains the effect of reduced scale.
Hirosuke Tai [Q]: I understand. Thank you very much.
Also, on a slightly different note, the other thing I was wondering is what size of total assets, if any, are you
looking at in three years? Since you have given us various figures, some of them may come out if we calculate
backwards, but I was wondering if you could tell us roughly what size of assets you are planning to have.
Yamamoto [A]: I understand.
As you are well aware, Mr. Tai, the figure is subject to change depending on the impact of foreign exchange
rates, but we are projecting a little less than JPY900 billion.
Hirosuke Tai [Q]: I see. I understand. Then, not much has changed, has it? There was JPY910 billion at the endof March, and there will be a decrease in the exchange rate.
Yamamoto [A]: At the end of March, the yen was quite weak for the CR. The base we have on hand is over
JPY150 in US dollars, and then over JPY163 in euros. In the case of our company, we have many fixed assets
overseas, so when the yen depreciates at the end of the period, total assets inevitably swell, which is why the
figure at the end of the previous period was high.
Hirosuke Tai [Q]: On the other hand, since the medium-term plan is based on the assumption that theexchange rate will be JPY140, I think there will be a decrease in the amount of the decrease, but on the other
hand, considering what you said earlier about various structural reforms, I thought it would be smaller, but inreality, is it assumed that there will be almost no change except for the exchange rate?
Yamamoto [A]: As I mentioned earlier in the investment section, we have been holding down investment inparallel with structural reforms, but we expect investment to be almost equal to depreciation expenses, andwe expect investment cash flow to be about JPY120 billion over the three years. I believe that the decrease
and increase in investment cash flow will offset each other.
Hirosuke Tai [Q]: I see, I understand. Thank you very much.
One more last question, regarding the aftermarket business, I would like to ask about slide 18. I am not surewhat you mean by "external purchases" here, but do you have to purchase from an external source and thenattach the NTN brand to it to capture market share? I am not sure that this is a necessary business to do. If
the business is such that the cost would not pay for itself without outside purchases, then I guess you don't
need to do it anymore. I understand that using a third party in the production process is beneficial as a cost
reduction measure, but is it still a good idea to keep doing OEM and ODM procurement and sales as abusiness? This is my last question.
Ukai [A]: I will answer your question.
In the past, Japanese manufacturers had a considerable advantage in production, but many very promising
manufacturers are growing up around the world, and we have actually found some of them with a cost
structure that is very competitive compared to ours. We are now in a situation where receiving supplies fromthese suppliers is an option, and it is more competitive than making products under a cost structure in which
we have to invest on our own.

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Naturally, we will provide technology to meet the needs of our customers, and at the same time, as I explained
earlier, we will use our capabilities in the value chain, not only along the horizontal axis of the supply chain,but also along the vertical axis to provide quality and technology throughout the entire value chain. We will
supply products from a variety of supply sources, including this one. Aftermarkets are very varied and require
a wide variety of items to be handled in small lots, so we have determined that it is necessary to have a variety
of supply sources for such areas.
Hirosuke Tai [Q]: I understand. Is this a Chinese company?
Ukai [A]: No, not necessarily China. We are also in India and Europe, and in many other countries.
Hirosuke Tai [M]: I understand.
Ukai [A]: Of course, we have those in China, but we also need to have a variety of foreshadowing in terms of
US–China risk and global BCP in the future. Therefore, in supplying products for aftermarkets, we will naturally
handle the main parts on our own, but we will also consider how we can meet customers' needs in other areas
and work together with those areas where we can maintain brand value with.
Hirosuke Tai [M]: I see. Thank you very much. That is all.
Nagao [M]: Thank you very much, Mr. Tai.
I am very sorry, but we have reached the end of our time, so we will now conclude the Q&A session withanalysts and investors. Thank you very much. If anyone has additional questions, please contact the Investor
Relations Group in our Corporate Communications Department.
Thank you very much for your patience. Next, we would like to take questions from the press.
Now, Mr. Tai of the Nikkan Kogyo Shimbun, please state your question.
Tai [Q]: This is Tai from Nikkan Kogyo Shimbun. Best regards. I have one or two items to ask.
I would like to know what the total size of the capital investment plan is expected to be in the new three-year
plan, and how it compares to the actual results of the previous three years. This is my first point.
Yamamoto [A]: Yamamoto will answer.
First of all, the previous medium-term management plan called for an investment of about JPY80 billion overa three-year period, including property, plant, and equipment and intangible assets. In contrast, amortization
expenses were more than JPY120 billion over three years, so as I mentioned in my explanation, we were in asituation where investment was considerably reduced.
On the other hand, with regard to the new medium-term management plan, as explained in the cash
allocation sheet, we are considering an investment of about JPY120 billion over three years. In contrast,
amortization expenses are approximately JPY120 and several billions, so our thinking is that we are using theamount of amortization to invest in growth and other areas that are almost equivalent to the amortization
expenses.
Does that answer your question?
Tai [Q]: Thank you.

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One more point, as explained in the structural reform, in Europe, the consolidation will be done in Germany
and France and transferred to Romania. Am I correct in understanding that this would be like CVJ, where
Germany and France would be eliminated for certain production, and this would be transferred to Romania
within three years?
Yamamoto [A]: First, we will do a reorganization as a whole. In this context, we will bring low value-added
products to Romania. In France and Germany, labor costs are high, so in Germany, we will close the plant thatcurrently makes axle bearings. We are considering taking those axle bearings to a place with a bit lower laborcosts and restructuring the entire process along those lines.
In France, we are considering a reorganization in which one of our small factories will be closed, and the
products will be transferred and eventually gradually shifted to Romania.
Tai [Q]: Thank you. Does this mean that axle bearings made in Germany will also be transferred to Romania?
Yamamoto [A]: The axle bearings in Germany will be eliminated, not in Romania, in fact, we are now making
the third generations of axle bearings at two locations, so it is hard to say where it will be, but we areconsolidating them in one place.
Tai [Q]: I understand. I won't ask specifically where it's going to be, but is it safe to understand that it will bein Europe?
Yamamoto [A]: Yes.
Tai [M]: Thank you very much.
Nagao [M]: Thank you very much, Mr. Tai.
Please continue with your question, Mr. Tsuge from Nihon Keizai Shimbun.
Tsuge [Q]: My name is Tsuge from Nikkei. Best regards.
This is slightly related to the last question, but you mentioned that you are considering restructuring
unprofitable areas, mainly in the automobile industry, and that you are also considering restructuring in Japan.
What are the specific areas that will be considered over the next three years?
Ukai [A]: This is Ukai.
We have already built a new plant in Wakayama, where we are manufacturing new bearings. We still havespace here, and we believe that the main focus of this project is to plan for the consolidation and eliminationof domestic bearing factories in order to create efficient manufacturing methods or production lines.
Tsuge [Q]: So you are saying that bearings will be the main focus?
Ukai [A]: Yes. Mainly bearings for domestic sales.
Tsuge [Q]: I understand.
Also, in the area of raising the profit margin, I think you mentioned that you will thoroughly reduce the costof goods sold to the automobile industry, while at the same time increasing the transfer of selling prices andaftermarket business. How do you plan to proceed with raising prices in this area? For example, what sales
channels will you use and what kind of products will you deliver to increase aftermarket business, and how
can you negotiate to raise prices?
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Ukai [A]: This is Ukai.
I think it would be better to answer your current question in two parts. I would like to respond with two
points: one is to talk about how to expand the automotive aftermarket, and the other is how to promote priceshifting for automotive OEMs.
Tsuge [M]: It's okay. Please.
Ukai [A]: First of all, regarding the first part, automotive aftermarket, in Japan, we are not able to sell ourbearings to the aftermarket because of the contractual restrictions we have with our customers. We deliver
our products to automobile companies not as OEM, but as OES, or service parts, which are then sold by theautomobile companies.
In Europe, however, there are no such restrictions, and we can sell directly to the aftermarket. The U.S. isfollowing that. Regulations with customers differ by region and country in the world, and our first priority is
to expand our business where we can do so.
Regarding the price of the other item, I will have Mr. Miyazawa answer.
Miyazawa [A]: Now, Miyazawa will explain about the automotive OEM prices.
So far, we have been proceeding with the idea of basically passing on all of the costs, including inflation costs,
to the selling price.
Price negotiations are very lopsided by region and customer, but we have generally been able to reach thepoint we expected in the Americas and Japan. However, the fact is that Europe is in a very difficult situation.
We are going to negotiate hard with them, basically within the scope of the contract, including supply
restrictions and delivery details, and we are planning to revise the overall price as well.
Tsuge [Q]: When you say that Europe is struggling, do you mean for European automakers, or do you include
things like the decline in Europe by Japanese and American manufacturers?
Miyazawa [A]: Negotiatons to European brand manufacturers are struggling.
Tsuge [Q]: Is that because of the influence of the Chinese manufacturers that you mentioned earlier that haveentered the market? Or, it doesn't matter much?
Miyazawa [A]: Rather than competition with Chinese manufacturers, there are many cases where they takea very hard-line stance compared to Japanese or American manufacturers. We have some customers who
have no choice but to negotiate with us, including the imposition of delivery deadlines.
Tsuge [M]: I understand. Thank you very much.
Nagao [M]: Thank you, Mr. Tsuge.
Does anyone from the press have any other questions?
This is the end of the briefing on NTN Corporation's new medium-term management plan, although it is a little
earlier than the announced end time.
Thank you very much for your long participation today.
[END]
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______________
Document Notes
1.
2.
3.
4.

SupportJapan
TollfreePortions of the document where the audio is unclear are marked with [inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

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