financial results for the first half ended september …actual performance may differ substantially...

Financial Results for the First Half Ended September 30, 2017

Second Quarter

NOK CORPORATION (7240 / TSE1)

November 9, 2017

2Copyright (c) NOK CORPORATION All rights reserved.

Any plans, targets, forecasts, strategies, policies and opinions relating to NOK

CORPORATION or NOK Group companies or other information contained in these

materials that are not historical facts constitute forward-looking statements. The content

of such statements is based on the best information available to management at the time

of publication. Actual performance may differ substantially from projections due to

changes in a number of important factors implying risk and uncertainty with the potential

to affect results, including economic conditions across operating regions, prices and

foreign exchange rates.

While every effort has been made to ensure the accuracy of the content of these

materials, NOK provides no assurances to that effect. NOK assumes no liability

whatsoever for harm related to any errors that may be caused to persons attending this

presentation. NOK Corporation retains the copyright on these materials: unauthorized

reproduction or duplication is prohibited.

Disclaimer

Table of Contents

Copyright (c) NOK CORPORATION All rights reserved.

Page 4 Financial Results for the First Half Ended September 30, 2017

Page 11 Financial Results by Business Segment for the First Half Ended September 30, 2017

Page 19 Financial Forecasts and Financial Forecasts by Business Segmentfor the Fiscal Year Ending March 31, 2018

Page 30 Business Overview by Industry and by Region

Page 42 References

3

Financial Results for the First Half Ended September 30, 2017

The Market Trend Surrounding the NOK Group


(Thousands of units)

681

824

681

869

Jan-JunCY2016

Jul-DecCY2016

Jan-JunCY2017

Jul-DecCY2017

(Forecast)

Smartphone Worldwide Shipments(Millions of units)

2,156 2,565 2,360 2,550

2,256 2,380 2,312 2,200

9,223 9,531 9,616 9,650

13,635 14,476 14,288 14,400

Apr-SepFY2016

Oct-MarFY2016

Apr-SepFY2017

Oct-MarFY2017

(Forecast)

Motor Vehicle Production

Domestic Export Overseas Production

Source: Estimates by NOK CORPORATION

NOK Business Overview for the First Half Ended September 30, 2017


Sales to automobile applications grew due to robust demand in Japan as well as strong demand from Japanese car manufacturers in China. Sales to manufacturers of general industrial machinery increased on the back of continued strength in demand from construction machinery manufacturers mainly in China. Operating income rose due to an increase in sales and other factors.

Sales to automobile applications increased due to computerization of cars. In addition, sales increased owing to robust sales to hard disc drives and high performance smartphones, as well as to favorable exchange rates. Operating income rose due to cost reductions, reduced personnel and SG&A expenses and improved yield.

Sales declined due to inventory adjustment of high-performance multifunction peripherals. Operating income decreased due to lower sales (operating loss).

NOK Business Overview

SealBusiness

ElectronicProduct

Business

RollBusiness

Financial Results for the First Half Ended September 30, 2017 [vs. H1 FY2016]


107.13 110.99

(¥ billion)

11.3

20.1

9.6

26.6

4.7

16.2

335.0

357.4

0.0

10.0

20.0

30.0

300.0

400.0

H1 FY2016(Actual)

H1 FY2017(Actual)

[Income][Net Sales]

3.4%

5.6%

売上高

営業利益

経常利益親会社株主に帰属する四半期純利益

営業利益率

Net Sales

Operating Income

Ordinary Income

Profit Attributable toOwners of Parent

Operating Income Margin

Average Exchange Rate(Yen/$)


(¥ billion)

108.77 110.50

39.847.045.7

57.0

27.335.0

713.1 730.4

0.0

30.0

60.0

90.0

120.0

0.0

200.0

400.0

600.0

800.0

FY2016(Actual)

FY2017

（Revised Forecasts on Nov. 9）

[Income][Net Sales]

5.6%6.4%

Financial Forecasts for the Fiscal Year Ending March 31, 2018 [vs. FY2016]

売上高

営業利益

経常利益親会社株主に帰属する四半期純利益

営業利益率

Net Sales

Operating Income

Ordinary Income



Average Exchange Rate(Yen/$)

Interim Dividend for the Fiscal Year Ending March 31, 2018


FY2013 FY2014 FY2015 FY2016 FY2017

Interim Dividend

Term-end Dividend

¥20

¥25

91.8 ％

FY2016

Payout Ratio

Dividend

¥10 ¥10

¥25 ¥25

¥ 50¥15 ¥35Interim Term-end

¥25

31.6 ％

¥25

26.6 ％

FY2017

Payout Ratio

Dividend

Interim Term-end

¥25

24.7 ％

¥50

(plan)

(plan)

¥25 ¥25¥50

(plan)

(plan)

¥25 ¥25¥50


Financial Results by Business Segmentfor the First Half Ended September 30, 2017

Financial Results by Business Segment for the First Half Ended September 30, 2017


(¥ billion) FY2016 FY2017

Actual Actual

H1 H1 Amount Ratio

Net Sales 149.0 164.0 14.9 10.0%

Operating Income 15.7 19.1 3.4 21.7%

Net Sales 167.3 177.6 10.3 6.2%

Operating Income (5.6) 0.3 5.9 －

Net Sales 11.8 10.5 (1.4) (11.4%)

Operating Income 0.6 (0.0) (0.6) －

Net Sales 6.9 5.4 (1.5) (22.2%)

Operating Income 0.5 0.6 0.1 18.8%

Net Sales 335.0 357.4 22.4 6.7%

Operating Income 11.3 20.1 8.8 77.4%Total

YoYChanges

Seal Business

Electronic ProductBusiness

Roll Business

Others

15.7

19.1

149.0164.0

0.0

10.0

20.0

30.0

0.0

50.0

100.0

150.0

200.0

H1 FY2016

(Actual)

H1 FY2017

(Actual)

[Operating Income][Net Sales]


Net Sales Operating Income

¥12.8 bn

¥8.1 bn

19,244

Seal Business: Financial Results [vs. H1 FY2016]


(¥ billion)

11.6%10.4%

Net Sales ¥164.0 bn (+¥14.9 bn YoY)

Sales of automobiles in Japan were strong.

Sales of Japanese automobiles in China were strong.

Sales of general industrial machinery, such as construction machinery, were strong.

Operating Income ¥19.1 bn (+¥3.4 bn YoY)

Operating income grew due to an increase in sales.

Personnel and SG&A expenses increased.

Depreciation increased.

H1 FY2017 Results

¥16.9 bn

¥9.1 bn

20,076

Capital Investment

Depreciation

No. of Employees

15.719.1

6.5 0.5

(1.0)

0.2(0.1)(2.7)

H1 FY2016

Operating IncomeH1 FY2017

Operating Income


(¥ billion)

+3.4 bn

Seal Business: Changes in Operating Income [vs. H1 FY2016]

(5.6)

0.3

167.3177.6

(10.0)

0.0

10.0

20.0

30.0

(100.0)

0.0

100.0

200.0

300.0

H1 FY2016

(Actual)

H1 FY2017

(Actual)

[Operating Income][Net Sales]

¥22.7 bn

¥11.1 bn

25,852

Electronic Product Business: Financial Results [vs. H1 FY2016]


(¥ billion)


Sales for smartphones, automobiles and hard disk drives increased.

Exchange rate fluctuations had a positive impact.

Operating Income ¥0.3 bn (+¥5.9 bn YoY)

Cost reduced, and labor was saved effectively.

Yield rate improved.

H1 FY2017 Results

Capital Investment

Depreciation

No. of Employees

¥12.7 bn

¥11.7 bn

19,968

0.2%



(5.6)

0.3

(1.0)

3.0

0.4

1.2

2.7

(0.4)

H1 FY2016

Operating IncomeH1 FY2017

Operating Income


(¥ billion)

+5.9 bn

Electronic Product Business: Changes in Operating Income [vs. H1 FY2016]

0.6

(0.0)

11.8 10.5

0.0

2.0

0.0

5.0

10.0

15.0

20.0

H1 FY2016

(Actual)

H1 FY2017

(Actual)

[Operating Income]

[Net Sales]

¥0.3 bn

¥0.5 bn

2,139

Roll Business: Financial Results [vs. H1 FY2016]


(¥ billion)

5.0%

Net Sales ¥10.5 bn (-¥1.4 bn YoY)

Sales declined due to high performance multifunction peripheral inventory adjustment.

Operating Income -¥0.0 bn (-¥0.6 bn YoY)

Operating income declined due to lower sales.

Cost reduced.

Personnel and SG&A expenses increased.

H1 FY2017 Results

Capital Investment

Depreciation

No. of Employees

¥0.3 bn

¥0.5 bn

2,113



0.6

(0.0)(0.7)

0.4

0.0 0.0

0.0 (0.3)

H1 FY2016

Operating Income

H1 FY2017

Operating Income

Roll Business: Changes in Operating Income [vs. H1 FY2016]


(¥ billion)

-0.6 bn

Financial Forecasts andFinancial Forecasts by Business Segmentfor the Fiscal Year Ending March 31, 2018

Revised Financial Forecasts for the Second Half and Full Yearof the Fiscal Year Ending March 31, 2018 [vs. Previous Forecasts on July 14]


(¥ billion)

Full Year H1 H2 Full Year

Forecasts on Jul. 14 Actual Amount Ratio

Net Sales 716.8 357.4 373.0 730.4 13.6 1.9%

Operating Income 44.5 20.1 26.9 47.0 2.5 5.6%

Ordinary Income 52.0 26.6 30.4 57.0 5.0 9.6%

32.0 16.2 18.8 35.0 3.0 9.4%

Operating Income Margin 6.2% 5.6% 7.2% 6.4% 0.2pt －

Capital Investment － 30.0 36.3 66.3 －－

Depreciation － 21.4 23.0 44.4 －－

－ 110.99 110.00 110.50 －－

No. of Employees － 42,327 43,635 43,635 －－

* + indicates weaker yen, ( ) indicates stronger yen

Average Exchange Rate*(Yen/dollar)

Changes vs.

Forecasts on July 14

FY2017

Revised Forecasts on Nov. 9

Profit Attributable to

Owners of Parent

Revised Financial Forecasts for the Fiscal Year Ending March 31, 2018 [vs. FY2016]


(¥ billion)

Actual

H1 H2 Full Year H1 H2 Full Year Amount Ratio Amount Ratio Amount Ratio

Net Sales 335.0 378.1 713.1 357.4 373.0 730.4 22.4 6.7% (5.1) (1.4%) 17.3 2.4%

Operating Income 11.3 28.5 39.8 20.1 26.9 47.0 8.8 77.4% (1.5) (5.4%) 7.2 18.2%

Ordinary Income 9.6 36.1 45.7 26.6 30.4 57.0 17.0 175.7% (5.7) (15.7%) 11.3 24.7%

4.7 22.6 27.3 16.2 18.8 35.0 11.6 246.1% (3.9) (17.2%) 7.7 28.1%

3.4% 7.5% 5.6% 5.6% 7.2% 6.4% 2.2pt － (0.3pt) － 0.9pt －

Capital Investment 35.9 29.3 65.1 30.0 36.3 66.3 (5.9) － 7.0 － 1.1 －

Depreciation 19.7 20.6 40.4 21.4 23.0 44.4 1.7 － 2.3 － 4.0 －

107.13 110.41 108.77 110.99 110.00 110.50 3.86 － (0.41) － 1.73 －

No. of Employees 47,399 48,181 48,181 42,327 43,635 43,635 (5,854) － (4,546) － (4,546) －

* + indicates weaker yen, ( ) indicates stronger yen

Average ExchangeRate*(Yen/dollar)

FY2016 FY2017 YoY Changes

ActualRevised Forecasts on

Nov. 9 H1 H2 Full Year


Operating IncomeMargin

Revised Financial Forecasts by Business Segment for the Fiscal Year Ending March 31, 2018


(¥ billion)

Actual

H1 H2 Full Year H1 H2 Full Year Amount Ratio Amount Ratio Amount Ratio

Net Sales 149.0 161.5 310.6 164.0 166.5 330.5 14.9 10.0% 5.0 3.1% 19.9 6.4%

OperatingIncome

15.7 21.4 37.1 19.1 19.9 39.0 3.4 21.7% (1.5) (7.2%) 1.9 5.0%

Net Sales 167.3 199.5 366.8 177.6 191.0 368.6 10.3 6.2% (8.5) (4.3%) 1.8 0.5%

OperatingIncome

(5.6) 6.2 0.6 0.3 7.0 7.3 5.9 － 0.8 13.0% 6.7 －

Net Sales 11.8 10.7 22.6 10.5 10.2 20.7 (1.4) (11.4%) (0.5) (5.1%) (1.9) (8.4%)

OperatingIncome

0.6 0.2 0.8 (0.0) 0.0 0.0 (0.6) － (0.2) (93.0%) (0.8) (99.1%)

Net Sales 6.9 6.3 13.2 5.4 5.3 10.7 (1.5) (22.2%) (1.0) (15.8%) (2.5) (19.1%)

OperatingIncome

0.5 0.6 1.1 0.6 0.1 0.7 0.1 18.8% (0.5) (90.1%) (0.4) (38.3%)

Net Sales 335.0 378.1 713.1 357.4 373.0 730.5 22.4 6.7% (5.1) (1.4%) 17.3 2.4%

OperatingIncome

11.3 28.5 39.8 20.1 26.9 47.0 8.8 77.4% (1.5) (5.4%) 7.2 18.2%

Total

SealBusiness

ElectronicProductBusiness

RollBusiness

Others

YoY Changes

ActualRevised Forecasts on

Nov. 9 H1 H2 Full Year

FY2016 FY2017

37.1 39.0

310.6 330.5

0.0

15.0

30.0

45.0

60.0

0.0

100.0

200.0

300.0

400.0

FY2016

(Actual)

FY2017

(Forecast)

[Operating Income]

[Net Sales]Net Sales Operating Income Margin

Operating Income (H1) Operating Income (H2)

Seal Business: Financial Forecasts [vs. FY2016]



Sales of automobiles in Japan are expected to be strong.

Sales of Japanese automobiles in China are expected to be strong.

Sales of general industrial machinery, such asconstruction machinery are expected to be strong.

Operating Income ¥39.0 bn (-¥1.9 bn YoY)

Operating income is expected to grow due to an increase in sales.

Personnel and SG&A expenses is expected to increase.

Depreciation is expected to increase.

FY2017 Forecasts(¥ billion)

11.8%

¥31.2 bn

¥16.9 bn

19,500

Capital Investment

Depreciation

No. of Employees

11.7%

¥38.2 bn

¥19.2 bn

20,209

37.1

39.0

8.20.9

(2.0)

0.3

0.2

(5.8)

FY2016

Operating Income

(Actual)

FY2017

Operating Income

(Forecast)

Seal Business: Changes in Operating Income [vs. FY2016]


(¥ billion)

+1.9 bn

0.6

7.3

366.8 368.6

(10.0)

0.0

10.0

20.0

30.0

△ 200

0

200

400

600

FY2016

(Actual)

FY2017

(Forecast)

[Operating Income]



Electronic Product Business: Financial Forecasts [vs. FY2016]


(¥ billion)

2.0%


Demand from automobile applications is expected to be strong.

Demand from smartphones and hard disk drives is expected to be strong.

Exchange rate fluctuations are expected to have a positive impact.

Operating income ¥7.3 bn (+¥6.7 bn YoY)

Cost is expected to be reduced, and labor is expected to be saved effectively.

Yield rate is expected to be improved.

Depreciation is expected to be increased.

FY2017 Forecasts

¥32.8 bn

¥22.4 bn

26,385

Capital Investment

Depreciation

No. of Employees

¥26.4 bn

¥23.9 bn

21,027

0.2%

0.6

7.3

(1.3)

5.0

(1.9)

0.6

2.5

1.8

FY2016

Operating Income

(Actual)

FY2017

Operating Income

(Forecast)

Electronic Product Business: Changes in Operating Income [vs. FY2016]


(¥ billion)

+6.7 bn

0.8

0.0

22.620.7

0.0

1.0

2.0

3.0

4.0

0.0

10.0

20.0

30.0

40.0

FY2016

(Actual)

FY2017

(Forecast)

[Operating Income]



Roll Business: Financial Forecasts [vs. FY2016]


(¥ billion)

¥1.0 bn

¥1.0 bn

2,130

3.6%

Net Sales ¥20.7 bn (-¥1.9 bn YoY)

Sales are expected to decline due to high performance multifunction peripheral inventory adjustment.

Operating income ¥0 bn (-¥0.8 bn YoY)

Operating income is expected to decline due to lower sales.

Cost is expected to be reduced.

Personnel and SG&A expenses are expected to be increased.

FY2017 Forecasts

Capital Investment

Depreciation

No. of Employees

¥1.1 bn

¥1.0 bn

2,230

0.8

0.0

(1.2)

0.8

0.0 0.0

0.0(0.4)

FY2016

Operating Income

(Actual)

FY2017

Operating Income

(Forecast)

Roll Business: Changes in Operating Income [vs. FY2016]


(¥ billion)

-0.8 bn


Business Overview by Industry and by Region

Consolidated Net Sales Trend by Industry (by Quarter)


71.0 71.8 76.2 78.1 75.5 78.3

52.3

93.3 100.0

76.7 64.5

89.3 23.8

22.8 23.1

23.9 24.9

24.9

147.1

187.9 199.4

178.7 164.9

192.5

0.0

50.0

100.0

150.0

200.0

250.0

Q1FY2016(Actual)

Q2FY2016(Actual)

Q3FY2016(Actual)

Q4FY2016(Actual)

Q1FY2017(Actual)

Q2FY2017(Actual)

(¥ billion)

Net Sales by Industry

Automotive Industry (AI) Electronic Industry (EI) General Industry (GI)

Consolidated Net Sales Trend by Industry (by Half Year)


142.9 154.3 153.8 159.0

145.6176.8 153.8 165.0

46.6

47.049.8

49.0335.0

378.1357.4

373.0

0.0

100.0

200.0

300.0

400.0

H1FY2016(Actual)

H2FY2016(Actual)

H1FY2017(Actual)

H2FY2017

(Forecast)

(¥ billion)

Net Sales by Industry

Automotive Industry (AI) Electronic Industry (EI) General Industry (GI)

Consolidated Net Sales Trend by Region (by Quarter)


69.4 83.7 84.9 79.2 72.9 82.3

42.9

67.4 78.1 61.0

51.9 66.8

26.1

28.8 28.7

29.5 31.1

34.6

8.7

8.0 7.7

9.1 9.1

8.7

147.1

187.9 199.4

178.7 164.9

192.5

0.0

50.0

100.0

150.0

200.0

250.0

Q1FY2016(Actual)

Q2FY2016(Actual)

Q3FY2016(Actual)

Q4FY2016(Actual)

Q1FY2017(Actual)

Q2FY2017(Actual)

(¥ billion)

Net Sales by Region

Japan China Other Asia Other

Consolidated Net Sales Trend by Region (by Half Year)


153.1 164.1 155.2 152.5

110.3139.1

118.7 141.0

54.9

58.265.7

61.416.7

16.817.8

18.1335.0

378.1357.4

373.0

0.0

100.0

200.0

300.0

400.0

H1FY2016(Actual)

H2FY2016(Actual)

H1FY2017(Actual)

H2FY2017

(Forecast)

(¥ billion)

Net Sales by Region


Net Sales Trend for Seal Business by Region (by Quarter)


51.9 53.9 56.5 56.9 56.2 57.4

9.8 9.7 11.5 11.7 11.4 12.2 9.8 9.1 9.6 10.4 10.2 11.3 2.6 2.3 2.2 2.7 2.7 2.7 74.1 75.0

79.8 81.7 80.5 83.5

0.0

20.0

40.0

60.0

80.0

100.0

Q1FY2016(Actual)

Q2FY2016(Actual)

Q3FY2016(Actual)

Q4FY2016(Actual)

Q1FY2017(Actual)

Q2FY2017(Actual)

(¥ billion)

Seal Business: Net Sales by Region


Net Sales Trend for Seal Business by Region (by Half Year)


105.8 113.4 113.6 115.9

19.5 23.2 23.6 23.9

18.9 20.0 21.5 21.4 4.9 4.9 5.4 5.3

149.0 161.5 164.0 166.5

0.0

30.0

60.0

90.0

120.0

150.0

180.0

H1FY2016(Actual)

H2FY2016(Actual)

H1FY2017(Actual)

H2FY2017

(Forecast)

(¥ billion)

Seal Business: Net Sales by Region


* The H2 forecast is the full-year forecast minus the H1 results.

Net Sales Trend for Electronic Product Business by Region (by Quarter)


12.0 24.6 23.3 17.6 12.1 20.8

29.9

54.8 63.8

46.6 37.9

52.1 15.3

18.8 18.2

18.2

19.9

22.4

6.1

5.7 5.5

6.4

6.4

6.0

63.4

103.9 110.8

88.7 76.3

101.3

0.0

50.0

100.0

150.0

Q1FY2016(Actual)

Q2FY2016(Actual)

Q3FY2016(Actual)

Q4FY2016(Actual)

Q1FY2017(Actual)

Q2FY2017(Actual)

(¥ billion)

Electronic Product Business: Net Sales by Region


Net Sales Trend for Electronic Product Business by Region (by Half Year)


36.6 40.9 32.9 28.3

84.7 110.4

89.9 112.0

34.2

36.4

42.3 38.0 11.8

11.9

12.4 12.8 167.3

199.5

177.6 191.0

0.0

50.0

100.0

150.0

200.0

250.0

H1FY2016(Actual)

H2FY2016(Actual)

H1FY2017(Actual)

H2FY2017

(Forecast)

(¥ billion)

Electronic Product Business: Net Sales by Region



Trend of Capital Investment by Region (by Half Year)


10.1 11.013.3 13.6 11.9

17.5

7.8 8.6

12.9 7.1

6.9

6.3

16.7

6.1

9.4

8.2 10.7

11.7

0.2

1.0

0.2

0.4 0.5

0.8 34.8

26.6

35.9

29.3 30.0

36.3

0.0

10.0

20.0

30.0

40.0

H1FY2015

H2FY2015

H1FY2016

H2FY2016

H1FY2017

H2FY2017

(Forecast)

Japan China Other Asia Europe / the U.S.

* Capital investment includes the acquisition of intangible assets.

Capital Investment

(¥ billion)


Trend of Depreciation by Region (by Half Year)


6.1 6.9 7.0 7.6 8.1 9.2

6.3 5.9 5.5 5.6 5.7 5.9

7.1 7.6 7.0 7.1 7.3 7.5 0.1

0.2 0.3 0.3 0.4 0.4 19.6 20.6 19.7 20.6 21.4

23.0

0.0

10.0

20.0

30.0

H1FY2015

H2FY2015

H1FY2016

H2FY2016

H1FY2017

H2FY2017

(Forecast)

(¥ billion)

Depreciation

Japan China Other Asia Europe / the U.S.


Copyright (c) NOK CORPORATION All rights reserved. 41

References


1950 1970 19901980 2000 20101960

262.0 297.7356.5

407.0450.6

479.8

526.3

466.7414.8

498.9 495.3540.9

591.4 609.0

693.7746.1

713.1 730.4

14.7 22.744.5 48.8 45.3

41.7 42.57.4 12.7

35.1 30.0 26.5 32.638.9 67.1 48.3 39.8 47.0

5.6%

7.6%

12.5% 12.0%

10.0%

8.7% 8.1%

1.6%

3.1%

7.0%6.1%

4.9%

5.5%6.4%

9.7%

6.5%5.6%

6.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2013(Reference)*

FY2014 FY2015 FY2016 FY2017(Forecast)

(¥ billion)Net Sales Trend

Net Sales Operating Income Operating Income Margin

* From FY2014, NOK has unified the accounting period of the overseas business and changed its depreciation method so the values are calculated and used for reference purposes.

Corporate History

1939 Edogawa Seiki Co., Ltd. founded

1941 Japan Bearing Production Co., Ltd. founded in Kobe

1951 Tokyo Oil Seal Industry Co., Ltd. merges with Nippon Yushi Industry Co., Ltd., and company name is changed to Nippon Oil Seal Industry Co., Ltd.

1976 Subsidiary NOK KLUEBER CO., LTD. established

1978 Equity stake taken in Pyung Hwa Oil Seal Industry Co., Ltd. (South Korea)

1960 Capital participation agreement concluded with Carl Freudenberg KG (Germany).

1961 Listed on the Tokyo Stock Exchanges

1968 NOK-USA, Inc. established (changes its name to NOK INC. in 1980)

1969 Subsidiary NIPPON MEKTRON, LTD. established

1985 Company name changed from Nippon Oil Seal Industry Co., Ltd. to NOK CORPORATION

1988 Subsidiary named THAI NOK CO., LTD. established in Thailand

1989 FREUDENBERG-NOK GP established as an affiliated company in the U.S.

1995 Subsidiary Wuxi NOK-Freudenberg Oilseal Co., Ltd. established in China

1996 Subsidiary named P.T. NOK Indonesia established in Indonesia; subsidiary named NOK Asia Co., Ptd. Ltd. established in Singapore

2000 SIGMA FREUDENBERG NOK PVT. LTD. established as an affiliate company in India

2002 Subsidiary named UNIMATEC CO., LTD. established

2004 Subsidiary named VIETNAM NOK CO., LTD. established in Vietnam

2007 Subsidiary named SYNZTEC CO., LTD. established

Global Network


NOK Group Strengths


NOK Group companies make up a “Group of

Compound Technology Manufacturers” like one

firm connected to each division, an enterprise

group sharing core technologies. Each company

boasts its individual strengths while sharing a

common vision, and conducts business operations

to handle any and all client requirements.

NOK R&D


NOK’s Shonan Development Center was opened in 2005 as a think

tank to bring together in one place all of the company’s advanced

technologies, and to strive to become the global No. 1 technology

creator. The Center has functional abilities in materials technologies,

evaluation analysis technologies and production technologies, making

possible self contained operations execution. NOK responds to the

needs of society, and will further pursue R&D in order to continue

supplying products that contribute to daily living convenience and the

environment.

POINT

The Shonan Development Center aggregates all of NOK’s advanced technologies, and was established with the

aim of accelerating the development process. This development system removes barriers between each division,

and provides a self contained comprehensive approach from product design through shipment inspections. The

center actively promotes merging R&D and production technologies, churning out products with unique cutting

edge technology that can’t be imitated by others.

NOK Major Products: Oil Seals


Oil seals are a functional part to seal oil. For “moving” parts of machinery that revolve or perform vertical up-and-

down motions etc., oil seals prevent the leakage of lubricant oils, water, chemical solutions, gas etc., while at the

same time preventing the ingress of outside particulates. They are indispensable parts for a wide range of

machinery types including automobiles, ships, planes, air conditioners, washing machines, water works etc.

(Example of Use)

NOK’s history is the history of oil seals. The road to becoming Japan’s No. 1 oil seal

maker began in 1960, when the company concluded a technology partnership

agreement with Carl Freudenberg KG of the former West Germany. After that the

company built a production plant in the US when there was still only one Japanese

auto manufacturer located there, eventually supplying oil seals to the US ‘Big 3’.

Today the company boasts the top market share of 70% in Japan and 50%

globally, and its reliability and track record of performance is widely acknowledged.

POINT

NOK Major Products: Flexible Printed Circuits (FPCs)


Flexible printed circuits (FPCs) are flexible circuit boards based on films.

Thanks to the functionality of flexible printed circuit boards, compact cellular phones became a reality.

Applications are not limited to cell phones, but also cover many areas including digital cameras and notebook PCs.

This is electronics business of NOK Group company NIPPON MEKTRON, LTD.

These thin and light circuit boards are used in smartphones. FPCs which have the

characteristics of being thin, lightweight and flexible, are expected to see further

increased functionality in the future. We hold the No. 1 market share both in Japan

and globally.

POINT

(Example of Use)

NOK Products in Automobiles


Market Trends by Sector: Motor Vehicle Production (by Half Year, Fiscal Year)


Source: Estimates by NOK CORPORATION50

2,216 2,389 2,156 2,565 2,360 2,550

2,231 2,352 2,256 2,380 2,312 2,200

8,772 9,052 9,223 9,531 9,616 9,650

13,219 13,793 13,635 14,476 14,288 14,400

0

3,000

6,000

9,000

12,000

15,000

Apr-SepFY2015

Oct-MarFY2015

Apr-SepFY2016

Oct-MarFY2016

Apr-SepFY2017

Oct-MarFY2017

(Forecast)

(Thousands of units)

Motor Vehicle Production

Domestic Export Overseas Production

* The value for Overseas Production includes completed vehicle units produced overseas in addition to knock-down units.

NOK Products in General Industrial Machinery


Market Trends by Sector: Construction Machinery Domestic Production(by Half Year, Fiscal Year)



49,602 52,906 54,148 61,295

77,450 77,550

0

20,000

40,000

60,000

80,000

100,000

Apr-SepFY2015

Oct-MarFY2015

Apr-SepFY2016

Oct-MarFY2016

Apr-SepFY2017

Oct-MarFY2017

(Forecast)

(Units)

Construction Machinery Domestic Production

NOK Products in IT Electronic Devices


FPC for Smartphones

FPC for Hard Disk Drives

Flex-Boards for Digital Cameras

Flexible Printed Circuits (FPCs), a product in which we hold the top share globally, are widely used in cutting-edge electronic devices. In addition, multi-layer flexible printed circuits (Flex-Boards), made with advanced technology is indispensable for the miniaturization and high functionality of IT electronic devices. They are also widely used in waterproof electronic devices.

FPC for Tablet PC

Market Trends by Sector: Mobile Phone Worldwide Shipments (by Half Year, Calendar Year)



646 773 681

824 681

869

199 199

160

168

134

189 845 972

841 992

815

1,058

0

300

600

900

1,200

1,500

Jan-JunCY2015

Jul-DecCY2015

Jan-JunCY2016

Jul-DecCY2016

Jan-JunCY2017

Jul-DecCY2017

(Forecast)

(Millions of units)

Mobile Phone Worldwide Shipments

Smartphones Other

Market Trends by Sector: Hard Disk Drives Worldwide Production (by Half Year, Calendar Year)



235 233201

227202 208

0

100

200

300

400

500

Jan-JunCY2015

Jul-DecCY2015

Jan-JunCY2016

Jul-DecCY2016

Jan-JunCY2017

Jul-DecCY2017

(Forecast)

(Millions of units)Hard Disk Drives Worldwide Production

Market Trends by Sector: Digital Camera Worldwide Production (by Half Year, Calendar Year)



7 8 6 6 5 6

12 126 6 6 5

19 20

12 12 11 11

0

20

40

60

Jan-JunCY2015

Jul-DecCY2015

Jan-JunCY2016

Jul-DecCY2016

Jan-JunCY2017

Jul-DecCY2017

(Forecast)

(Millions of units)

Digital Camera Worldwide Production

Single-Lens Reflex-type Compact-type

Market Trends by Sector: Tablet PC Worldwide Shipments (by Half Year, Calendar Year)



88

114

8694

76

95

0

30

60

90

120

150

Jan-JunCY2015

Jul-DecCY2015

Jan-JunCY2016

Jul-DecCY2016

Jan-JunCY2017

Jul-DecCY2017

(Forecast)

(Millions of units)

Tablet PC Worldwide Shipments

Flexible Printed Circuits Used in Automobiles


Switches Infotainment Sensors

Powertrain Lighting

The use of flexible printed circuits is growing because more electronics and electronic devices are beinginstalled in automobiles.

09, Nov 2017

Segment Information: Fiscal Year 2017 1H Results and Fiscal Year 2017 Forecasts NOK Corporation

（Millions of yen)

Year-on-Year Year-on-Year Year-on-Year

Change Change Change

External sales 149,040 161,529 310,569 163,981 14,941 10.0% 166,500 4,971 3.1% 330,481 19,912 6.4%

Inter-seg sales 1,566 1,279 2,845 1,236 △330 1,150 △129 2,386 △459

Net sales 150,607 162,807 313,414 165,217 14,610 167,650 4,843 332,867 19,453Seal

BusinessOperating Income 15,717 21,415 37,132 19,122 3,405 21.7% 19,877 △1,538 △7.2% 39,000 1,868 5.0%

Profit Margin 10.4% 13.2% 11.8% 11.6% 1.1pt 11.9% △ 1.3pt 11.7% △ 0.1pt

Capital Investment 12,805 18,416 31,221 16,886 4,080 21,294 2,879 38,180 6,959

Depreciation 8,110 8,749 16,859 9,125 1,016 10,052 1,303 19,178 2,319

No. of Personnel 19,244 19,500 19,500 20,076 576 20,209 709 20,209 709

External sales 167,253 199,547 366,800 177,579 10,326 6.2% 191,000 △8,547 △4.3% 368,580 1,780 0.5%

Inter-seg sales 8 52 60 8 0 - △ 52 8 △ 52

Electronic Net sales 167,261 199,599 366,860 177,588 10,327 191,000 △8,599 368,588 1,728

Product Operating Income △5,560 6,191 631 311 5,871 － 7,000 809 13.0% 7,312 6,681 －

Business Profit Margin -3.3% 3.1% 0.2% 0.2% 3.5pt 3.7% 0.6pt 2.0% 1.8pt

Capital Investment 22,690 10,149 32,839 12,681 △10,008 13,702 3,553 26,383 △6,456

Depreciation 11,052 11,309 22,361 11,731 678 12,128 819 23,858 1,497

No. of Personnel 25,852 26,385 26,385 19,968 △6,417 21,027 △5,358 21,027 △5,358

External sales 11,837 10,749 22,586 10,483 △1,354 △11.4% 10,200 △549 △5.1% 20,683 △1,903 △8.4%

Inter-seg sales - 0 0 3 3 - △ 1 3 3

Net sales 11,837 10,750 22,587 10,487 △1,350 10,200 △550 20,687 △1,900

Roll Operating Income 591 227 818 △8 △599 － 16 △211 △93.0% 8 △810 △99.0%

Business Profit Margin 5.0% 2.1% 3.6% △0.1% △ 5.1pt 0.2% △ 2.0pt 0.0% △ 3.6pt

Capital Investment 316 645 961 294 △22 851 207 1,145 184

Depreciation 499 507 1,006 497 △3 543 36 1,039 33

No. of Personnel 2,139 2,130 2,130 2,113 △17 2,230 100 2,230 100

External sales 6,885 6,297 13,182 5,358 △1,527 △22.2% 5,300 △997 △15.8% 10,659 △2,523 △19.1%

Inter-seg sales 131 168 299 206 75 194 26 400 101

Net sales 7,016 6,465 13,481 5,564 △1,452 5,494 △971 11,059 △2,422

Other Operating Income 525 578 1,103 624 99 18.8% 57 △521 △90.1% 681 △422 △38.3%

Business Profit Margin 7.5% 8.9% 8.2% 11.2% 3.7pt 1.0% △ 7.9pt 6.2% △ 2.0pt

Capital Investment 44 69 113 121 77 449 380 570 457

Depreciation 82 81 163 87 4 245 164 332 169

No. of Personnel 164 166 166 170 4 169 3 169 3

△1,706 △1,499 △3,205 △1,454 252 △1,344 155 △2,799 406

External sales 335,015 378,123 713,138 357,402 22,387 6.7% 373,000 △5,123 △1.4% 730,400 17,262 2.4%

Inter-seg sales - - - - - - - - -

Net sales 335,015 378,123 713,138 357,402 22,387 373,000 △5,123 730,400 17,262

Consolidated Operating Income 11,326 28,450 39,776 20,098 8,772 77.4% 26,900 △1,550 △5.4% 47,000 7,224 18.2%

Profit Margin 3.4% 7.5% 5.6% 5.6% 2.2pt 7.2% △ 0.3pt 6.4% 0.9pt

Capital Investment 35,855 29,280 65,135 29,982 △5,873 36,297 7,016 66,278 1,143

Depreciation 19,744 20,647 40,391 21,440 1,696 22,968 2,321 44,407 4,016

No. of Personnel 47,399 48,181 48,181 42,327 △5,854 43,635 △4,546 43,635 △4,546

Note: The above forecasts are based on currently available information. Actual financial results may differ significantly due to various factors.

Year-on-Year change of number of personnel is calculated by comparing with the result of FY 2016.

Fiscal 2H FY2016

FY2016(Results)

Elimination of Inter-seg sales

Segment

Fiscal 1H

FY2017,1H Results & FY2017 Forecasts

% ChangeFiscal 2H FY2017Fiscal 1H % Change % Change※ ※ ※

※


Contact:

NOK CORPORATIONCORPORATE PLANNING OFFICECORPORATE COMMUNICATION DEPT.

Phone: +81-3-3434-1736E-mail: [email protected]: http://www.nok.co.jp/en/

financial results for the first half ended september …actual performance may differ substantially...

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