[Company analysis] NTN Corporation

「NTN Corporation」is a Japanese bearing manufacturing company headquartered in Osaka, and this company is one of the three major bearing manufacturers(「NSK Ltd.(日本精工)」,「JTEKT Corporation(ジェイテクト)」and「NTN Corporation」). In the bearing industry, they have a high market share of 2nd in Japan and 4th in the world. The number of consolidated employees is approximately 24,988.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	NTN Corp.
Company name (Japanese)	NTN
Date of establishment	March 1918
Headquarters location	〒550-0003 大阪府大阪市西区京町堀1丁目3番17号
Capital	54,300
Consolidated sales	733,569
Consolidated operating profit	26,945
Consolidated total assets	840,750
Consolidated capital	246,404
Capital adequacy ratio	29.3%
Consolidated number of employees	24,988

 

 

 

2. Summary and Features

 
The Japanese bearing industry was started in 1914 by「NSK(日本精工)」. Four years later, in 1918,「Nishizono Ironworks」, which was located in Mie Prefecture, started producing ball bearings, and five years later, the company merger with「Tomoe Trading Co.(巴商会)」and became the predecessor of the current「NTN」.


In 1937, the company name was changed to「Toyo Bearing Mfg. Co., Ltd.(東洋ベアリング製造株式会社)」, and demand for bearings increased rapidly due to the war from the time when Japan invaded Manchuria. However, during World War II, the production volume was limited due to the lack of raw materials and this situation could not became solved until the war is over. 

Currently, 「NTN」has constant velocity joints and precision equipment as its main products, and has the world's 4th largest market share in bearings, the 2nd largest drive shaft for automobiles, and the world's top share in axle units. In the large bearing business for wind power plants, they have been a major player since the market formation stage and are the 3rd largest in the world after「SKF」and「Schaeffler」and of course, they got the top share in Japan.

「NTN」also began the oversea expansion in early stage, so now they have approximately 220 bases in 33 countries around the world, and both overseas sales and overseas employee ratio exceed 60%. However, since NTN has prioritized its development in Europe, such as purchasing the bearing manufacturing company「SNR」which was owned by「Renault」in 2007. So relatively, in Chinese market,「NTN」has a weaker position compared with its competitors. So currently, they are focusing on emerging countries (China, India, Brazil) and are planning to increase production capacity by using local materials, equipment, and personnel.

One of NTN's core business is Automotive-related parts. In particular, they specialize in electric vehicle-related products. For example, the "In-weel motor" developed by「NTN」has a built-in motor in the wheel and does not require a transmission or drive shaft, so it is possible to move each of the four wheels separately. By this, car designing could be more innovative.

In recent years, they have expanded their business with the know-how about friction and lubrication that they have accumulated through their bearing business. So,「NTN」started new business such as developing small hydroelectric generators and wind turbine generators.

However,「NTN」has still a high level of dependence on automobile related business. In case, there is a significant drop in demand from the automobile industry, this company cannot evade negative impact on sales. In addition, there is a risk on the declining in market price due to the competitors from China or other emerging countries.

 

 

 

3. Major Business

 

■ Automobile related parts
As the core business of「NTN」, they are focusing on the development of electric vehicle related products. The sales weight of this automobile-related business is extremely high at 70% or more.

■ Industrial machine
They manufacture bearings for various industrial machinery such as construction machinery, agricultural machinery, aerospace, office equipment, wind farms, etc.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		683,328	744,372	733,569
Consolidated operating profit		35,622	39,608	26,945
Consolidated total assets		798,891	840,051	840,750
Consolidated net assets		245,050	269,759	246,404
Breakdown of sales	Japan	200,955	213,976	216,267
	America	187,787	194,277	194,668
	Europe	165,262	188,224	179,827
	Asia and Others	129,323	147,894	142,806