2024

I would like to wish everyone a happy New Year.

First of all, we would like to express our deepest condolences to those who lost their lives in the earthquake that occurred in Noto, Ishikawa Prefecture, Japan on January 1st this year, and extend our deepest sympathies to all those affected by the disaster.

Last year, armed conflicts in various parts of the world disturbed the international order, severely affecting the politics and economies of many countries. In addition, the environment surrounding companies is becoming increasingly uncertain, as energy and raw material prices continue to rise and labor shortages persist.

Under such conditions, NTN is proceeding with transformation of our business structure to achieve a resilient corporate constitution capable of responding to changes in the external environment.

· Revitalize Automotive Business

In the Automotive Business, which has a large business scale and is most affected by the external environment, we are focusing on improving profits through appropriate pricing to reflect various cost increases and reviewing unprofitable projects. We are also working to strengthen our cost competitiveness by promoting cost reductions. Our efforts here include implementing procurement reforms through the adoption of new suppliers and centralized purchasing, as well as production reforms aimed at overall optimization that include reductions in works in process. As for products, we will develop and propose to customers high performance bearing products that meet the specific needs of electric vehicles (EVs), such as high speed rotation and resistance to electrical pitting. We will also expand mass-production of the High Efficiency Fixed Type CVJ “CFJ,” a product with the world's highest transmission efficiency that is ideal for EVs and HEVs. In these and other ways, we will strive to achieve even greater business growth by precisely meeting EV- and electrification-associated demand.

· Enhance brand value

To further expand our Aftermarket Business, we are building a supply system with “availability”—by which we mean the ability to provide customers with the products they want, when they want them—in mind. Additionally, to ensure a stable supply of top-selling products to our global distributor network, we are expanding our “FIRST” system for immediate delivery of general-use products and expand our supply capacity by reorganizing ball bearing production. We have switched to overseas production for small standard-type products and begun full-scale operations at our newly established Wakayama Works. Our aim is to supply products for aftermarket applications precisely when they are needed. We are not focused on products alone, as we have launched a new service that uses the “NTN Portable Vibroscope” to provide diagnostic reports on bearings. We will enhance our brand value by leveraging our product supply capabilities and proposing solutions that promptly address the customers' various issues.

· Strengthen ESG management

We practice ESG management with the aim of achieving sustainable growth. To strengthen our human resource base, we engage in “prosperous human development” based on our belief that “The company is its people.” In addition, we are focused on enhancing communication with our employees. For example, we hold town hall meetings with the President and Executive Officers at various sites to increase opportunities for dialog with employees. We also conducted engagement surveys targeting employees to implement measures designed to improve employees' satisfaction. In addition, we established the Carbon Neutrality Strategy Promotion Department last April to accelerate our decarbonization initiatives. The new department formulates and promotes strategies to help NTN achieve carbon neutrality.

The year 2024 marks the start of our new Medium-term Management Plan. We will strive to attain further growth and improve our corporate value by applying the fruits of our “transformation” efforts to date.

Eiichi Ukai
CEO
NTN Corporation