NTN provides products that suit the maintenance needs of all kinds of industrial machinery and automobiles. Net sales. Net sales. 105.

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1 Review of Operations Aftermarket Applications NTN provides products that suit the maintenance needs of all kinds of industrial machinery and automobiles. Results in the Fiscal Year Ended March 31, billion yen Down 8.% 14. billion yen Down 8.% Eiichi Ukai, Director Percentage of total sales 15 % 14.5 billion yen Operating Income/Operating Margin in aftermarket applications were 14.5 billion yen, a decrease of 9.1 billion yen (8.%), due to a decrease in industrial machinery aftermarket and the effects of exchange-rates and other factors. was 14. billion yen, a decrease of 3.7 billion yen (2.9%), due to the effects of exchange-rates and other factors. While automotive aftermarket remained strong, the primary reasons for these declines were that industrial machinery aftermarket, which accounts for the majority of sales, decreased due to the sluggish economic environment mainly in emerging countries. Current Business Conditions and Our Major Initiatives There are signs of recovery in demand for bearings for industrial machinery, and we expect a recovery in demand for industrial machinery aftermarket. In addition, we are focusing on enhancing the NTN brand and expanding sales by strengthening system for sales of MRO projects. In automotive aftermarket, there has been high growth in sales due to an expansion of product line up in the Americas and Europe, and we will continue to work to expand our market share. Forecast for the Fiscal Year Ending March 31, 218 Net Sales (Left Axis) Operating Margin % % 17.1% Operating Income (Right Axis) 15.6% % 14.2% billion yen Up 1.% from fiscal 15. billion yen Up 7.1% from fiscal We expect the market shrinking in Japan, but we will expand our market share and work to develop more MRO projects. In the Americas and Europe, we will also promote expanding sales of MRO projects for industrial machinery aftermarket. And we will strengthen our sales networks and promote sales for automotive aftermarket. We anticipate an increase in sales in the Asia region due to recovery demand for aftermarket. Under these business conditions, we expect to see net sales of 15.5 billion yen (up 1.% ), and operating income of 15. billion yen (up 7.1% ). MRO: Maintenance, Repair and Overhaul (Forecast) (Years ended/ending March 31) 27 NTN Report 217

2 PRODUCTS Photos are cross-sectional models of products. NTN helps to improve the productivity of customers equipment and maintain consistent operations through the stable supply of products and a quick delivery system by our global supply chain. For the maintenance needs of automobiles, we offer a wide range of auto parts that combine bearings and peripheral components. We also visit a large number of customers with Technical Service Units, hold technical workshops, and provide detailed support to help solve customers problems. Mining Constant velocity joint for industrial machinery The rust guard series spherical roller bearings Food Bearing unit Spherical roller bearing with compact seal Paper-making PolyLube bearings for food machinery Plastic sliding screws Steel ULTAGE Spherical roller bearings [Type EA, Type EM] Auto Parts Sealed four row tapered roller bearing Oil and Gas Parts kit for trucks Super large-sized split spherical roller bearing About the Company NTN s Vision and Strategy Feature Review of Operations The Source of Value Creation Arm shaped self-centering hydraulic puller Induction heating device Corporate Information Technical Service Unit Maintenance Tools / Technical training NTN Report

3 Review of Operations Industrial Machinery Applications NTN contributes to people s lives by supporting the rotating parts of a wide range of industrial machinery. Results in the Fiscal Year Ended March 31, billion yen Down 5.3% 1.6 billion yen Down 71.4% Kazuki Kawashima, Director 1 Net Sales (Left Axis) 5 Operating Margin % % 11.2 Percentage of total sales 15 % 98.6 billion yen Operating Income/Operating Margin 3.3 Operating Income (Right Axis) 5.7% 5.4% % 2.1% (Forecast) (Years ended/ending March 31) 1 5 In the industrial machinery applications, demand for construction machinery began to recover second half of the ended March 217, and demand for gearbox for robots was also strong. were 98.6 billion yen, a decrease of 5.5 billion yen (5.3%) due to the effects of exchange-rates and other factors. were 1.6 billion yen decrease of 4. billion yen (71.4%). However, excluding the effects of exchange-rates, there was an increase in both net sales and income. Current Business Conditions and Our Major Initiatives Industrial machinery market recovery remained stagnant, but it started moving in a positive direction second half of the ended March 217. This was mainly due to the recovery of sales in construction machinery, which account for a large portion of the industry sector, and we expect this strong demand to continue in the fiscal ending March 218. In addition, sales for wind turbines and gearbox for robots, as well as products for aircraft and rolling stock have also increased, and positive results from restructuring the engineering division are appearing. We will work to further expand sales and generate profits by developing high-value-added products, introducing them to the marketplace, and expanding production capacity. Forecast for the Fiscal Year Ending March 31, billion yen Up 3.4% from fiscal 2.1 billion yen Up 31.3% from fiscal In Japan, we expect an increase in demand for construction machinery to export to emerging countries, and demand for gearbox for robots, while in Europe and China we see increasing demand for wind turbines. In the Americas, the production of construction machinery is on a slight recovery curve. And in Europe, we expect an increase in sales due to the demand for new aircraft. We also expect demand for construction machines and machine tools to increase in Asia and China. Under these business conditions, we expect to see net sales of 12. billion yen (up 3.4% ) and operating income of 2.1 billion yen (up 31.3% ). 29 NTN Report 217

4 PRODUCTS Photos are cross-sectional models of products. We are expanding commercialization of our ULTAGE series of bearings, NTN s new generation of bearings with the world s highest standard, to meet market needs for higher rotational speed and precision. The bearings allow industrial machinery to be made smaller and lighter, and operate at lower rotational torque, which reduces the environmental impact. We will continue to develop the elemental technologies of bearings and work to develop high value-added products through the unitization and systemization of bearing-related components. Construction machinery bearings Helping to ensure stable food supplies Aerospace bearings Fundamental components for ensuring high-precision processing Applications for resource mining and civil engineering Agricultural machinery bearings Applications for jet engines around the world Machine tool bearings Gearbox bearings Meets growing demand in renewable energy Rolling stock bearings Supports smooth operation of copiers and multifunctional printers Underlying support for high productivity in robotic applications Wind turbine bearings Supports safety of the world s high-speed railways Office equipment bearings About the Company NTN s Vision and Strategy Feature Review of Operations The Source of Value Creation Used also for HDDs and thin fan motors Used for CT scanners and artificial hearts Corporate Information Hydrodynamic bearings Medical equipment bearings NTN Report 217 3

5 Review of Operations Automotive Applications NTN contributes to safety and relief of vehicles through the supply of bearings and driveshafts used in vehicles in many forms. Results in the Fiscal Year Ended March 31, billion yen Down 3.8% 2. billion yen Down 18.2% Hideaki Miyazawa, Managing Director Net Sales (Left Axis) 4 2 Operating Margin 6-2.5% Percentage of total sales 7% 48.2 billion yen Operating Income/Operating Margin Operating Income (Right Axis) 2.8% 3.8% 4.9% 4.2% 3.8% (Forecast) (Years ended/ending March 31) NTN Report Sales in automotive applications increased due to steady growth in demand for motorcycles in the ASEAN region. In China region, there was higher automobile production volume, and the start of mass production at our new plant. However, due to the effects of exchange-rates and other factors, sales were 48.2 billion yen (down 3.8% ). Although there were favorable effects from scale merits and the reduction of variable costs, operating income was 2. billion yen (down 18.2% ) also due to the effects of exchange-rates and other factors. Excluding the effects of exchange-rates, there was an increase in both income and profits. Current Business Conditions and Our Major Initiatives In the global automotive market, North American automobile production is looking weak, and there is uncertainty about the future of the economy in China. Meanwhile, the market structure and consumer needs are becoming increasingly diverse; this includes increasing production of EVs, electrification, and self-driving vehicles. We are seeing greater movement in qualitative changes than in quantitative expansion. Under such business conditions, we are working to strengthen profits by business structural reform of the driveshafts and hub bearings, and increasing production capacity. We are also working to develop new technologies and introduce more new products, starting with electric motors and actuators, to achieve sustainable business expansion. Forecast for the Fiscal Year Ending March 31, billion yen Up 2.6% from fiscal 18.9 billion yen Down 5.5% We expect positive effects launch of new models in Japan and strong customer demand in Europe. We also expect increasing automobile productions at Japanese manufacturers in China and increases due to steady demand in ASEAN. Meanwhile, in the Americas, although we see positive effects start of mass production on new orders at the new plant in Mexico, there is concern over a possible downward deviation expected number of new cars. Under these business conditions, we anticipate net sales to be billion yen (up 2.6% previous ) and operating income of 18.9 billion yen (down 5.5% previous ).

6 PRODUCTS Photos are cross-sectional models of products. We have developed low-torque hub bearings, driveshafts, and bearings, while making these products smaller and lighter, and we are also developing modular products. With the electrification of automobiles and in anticipation of self-driving, we have developed an Electric Motor and Actuator series composed of ball screw, motor, and controller, which we are promoting to customers for a wider range of applications. By selling these products globally, we are helping to improve vehicle fuel efficiency and riding comfort. Split type needle roller bearings (for camshaft) [Brake] Needle roller bearings for rocker arm Ball screw drive module for electric hydraulic brake BEAREE seal ring [Engine] AT/MT [Transmission] Pulley bearings for high-speed rotation CVT [Accessories] High-density, high-strength sintered gears for starter motors Auto tensioner with the variable damper mechanism for ISG-equipped engine [Steering] [Wheel applications] World s No. 2 share Driveshafts Mechanical clutch unit for next-generation steering system Clutch for seat lifter [Seat] World s No. 1 share Hub bearings About the Company NTN s Vision and Strategy Feature Review of Operations The Source of Value Creation ULTAGE Tapered roller bearings for automobiles Long-Life series TAB bearings Thrust needle roller bearings Needle roller and cage assembly bearings for planetary gear [Electric Motor and Actuator] In recent s, automobiles have been evolving from mechanical control using conventional hydraulic and pneumatic systems to electric control via electrical systems. At the same time, there is a movement toward low fuel consumption and the development of self-driving vehicles. We are producing extensive series of electric motors and actuators that will fit right in with the accelerating electrification of vehicles. Corporate Information NTN Report