NTN: “2016, a Year for Progress toward ‘Transformation’”

A Happy New Year to you all. I wish you all the best for the upcoming year. NTN has started the medium-term management plan “NTN 100” from last April. Toward the Company's 100th anniversary in March 2018 and continuous growth of the next 100 years, we have been implementing a number of policies to transform and build foundation into “Our Vision” in 2025. The major theme for the “NTN 100” has three basic policies—“Manage Growth” which concentrate management resources on strategic areas, “Manage Profitability” which reform business structure from “volume” to “value” to generate profit, and “Manage Foundation” which strengthen management and financial foundations. 2016 marks the second year of our “NTN 100” plan, and a focus will be placed on the following initiatives this year: 1. Expansion of the aftermarket business The aftermarket business has been seeing gradual results of a broader array of products and engineering services. Mobile technical service unit towards acquiring MRO items in Japan and Asia have especially been successful. The market environment has been severe, mainly in emerging economies, but we will actively reinforce activities throughout the world as a part of our “Manage Growth” plan. 2. Business developments in new areas Our company has fused our accumulated technology and knowhow to explore new business ideas outside of the conventional borders in the four areas of energy, EV, robotics and technical service. In the natural energy field, we are implementing development of micro hydro turbines and compact wind turbines using the innovative and highly efficient “blade” technology. For new markets that show potential, such as clean energy, we will accelerate business developments implementing our original technologies. 3. Structural reform of the driveshaft business In “Manage Profitability”, we have been promoting a dedicated project with the goal of structural reform of the driveshaft business. We will improve profitability steadily by our high value-added products such as the world's lightest class “Lightweight Driveshaft for FR vehicle” as well as reducing costs with new manufacturing technology. Additionally, we will establish a stable supply structure globally by starting driveshaft manufacturing in Mexico from February of this year, and in a newly established company in the USA from April 2017. 4. Reinforcement of the financial foundations We will strive to reinforce management and financial foundations for “Manage Foundation”. Business plans will especially be accelerated to guarantee soundness of the balance sheet which has been taking a change for the worse in the past few years, and also to improve cash flow and asset efficiency. I would like this year to be one that is focused on NTN's future growth, and a year towards realizing “Transformation” by making steady progress with each business plan. In closing, I would like to wish the very best health to you all and your family into the New Year.