JTEKT : REPORT 2020

JTEKT REPORT 2020

No. 1 & Only One

Management Principles

CORPORATE PHILOSOPHY

Seek to contribute to the happiness of people and

the abundance of society through product manufacturing that wins the trust of society.

JTEKT GROUP VISION

Shaping a Better Future through the Spirit of

No. 1 & Only One

We will be an invaluable partner with our customers, our suppliers, and our team members. We will deliver "No. 1 & Only One" products and services through "Building Value," "Building Excellent Products," and "Building Professionals."

Building Value

Provide value to customers by delivering products and services that exceed their expectations.

Building Excellent Products

Astonish the world with monozukuri, the art of rened craftsmanship and superior quality.

Building Professionals

Develop a team composed of individuals working together, acting with initiative, condence, pride, and passion as global members of JTEKT.

WHAT'S JTEKT

	Customer rst
JTEKT WAY
	• We are committed to look at things from customer's viewpoint, and sincerely respond to customer's requests.
	• We are committed to create values that are new to the world, to deliver products and services that exceed customer's expectation.

Ownership			Continuous kaizen
• We are committed to take everything as our own business.	JTEKT WAY	• We are committed to go and see for ourselves to thoroughly
• We are committed to grasp the essence of things and take	understand the situation, and identify root causes.
Our absolute ambition
prompt action.	• We are committed to, with enthusiasm for imaginativeness
				and inventiveness, diligently continue kaizen challenges.
Teamwork and self-discipline			Aspiration for innovation and
		for technique
• We are committed to be self-disciplined, and perform any task with			• We are committed to limitlessly heighten our technology
a sense of urgency.			and skills to become a front runner in innovation.
• We are committed to actively communicate to unite the power of			• We are committed to foster a culture to keep each of us
each other.			humble in learning things and developing each other.

Editorial policy

This report introduces business and environmental, social and governance (ESG) activities from a medium- to long-term perspective in order for shareholders, investors and other stakeholders to understand how the JTEKT Group contributes to solving social issues and realizing a sustainable society.

Please refer to the following guidelines that were referenced when creating this report. For more information on ESG, please visit our website.

We hope this report facilitates an understanding our corporate activities.

Reference guidelines

• IIRC (International Integrated Reporting Council) framework
• Japan's Corporate Governance Code
• The GRI (Global Reporting Initiatives) Standards
• Japan's Ministry of the Environment "Environmental Reporting Guidelines (2018 edition)"
• ISO26000 (International Standard for corporate responsibility)

Note on forward-looking statements

This report contains forward-looking statements pertaining to future plans and strategies. These forward-looking statements include risks, uncertainties and other factors, and actual results and business results may dier from those stated .

JTEKT REPORT 2020 (Integrated Report)

https://www.jtekt.co.jp/e/ir/f_jtekt_report.html

Detailed information	Information related	Information related
on nancial results	to sustainability	to corporate governance

* These reports are available for viewing on JTEKT's ocial website.

For items for which there is no criteria uniform across the JTEKT Group, the unconsolidat- ed results of JTEKT are displayed.

As a general rule, if there are changes in the tallying scope, we revise data dating back to the past.

01

02

Report Compositional Elements

Creating No. 1 & Only One

This report has been compiled based on the concept shown below to explain the creation of the JTEKT GROUP VISION "No. 1 & Only One."

WHAT'S JTEKT

CONTENTS

WHAT'S JTEKT

Management Principles	P.01-02
Report Compositional Elements	P.03-04
History	P.05-06

Management Principles

The basic philosophy at the core of the JTEKT Group. An identity that systematically indicates what we should be.

CORPORATE PHILOSOPHY

JTEKT GROUP VISION

No. 1 & Only One

Shaping a Better Future

JTEKT WAY

Business Environment Awareness

We recognize the strengths cultivated since our founding and the social structures and market economies that change over time, reecting both in our growth strategies.

External Environment Awareness

We perceive social issues from the perspective of markets and customers.

JTEKT's Strengths

JTEKT's core technologies and the new technologies created from them.

Core technologies

Materials		Tribology
Precision	Control	Measure-
processing	ment

New technologies

Acceleration of new product development

P.11~20, P.33~40, P.61~70

Strategies

Business Strategies

Based on our recognition of the business environment, we formulate business strategies from a long-term perspective. We execute these strategies to achieve our goals.

No. 1 & Only One

Various Capital Strategies

We support our business strategies with nancial and a variety of other capital strategies.

P.21~40

JTEKT Business	P.07-08
Value Creation Model	P.09-10
Financial / Non-Financial Highlights	P.11-12

SHAPING A BETTER FUTURE

A Message from the President	P.13-20
JTEKT Capital Strategy	P.21-26
Special Feature: Automotive Parts Industry	P.27-28
Special Feature: Bearing Business	P.29-30
Special Feature:	P.31-32
Machine Tools & Mechatronics Business
Review of Operations
Steering Business	P.33-34
Driveline Business	P.35-36
Bearing Business	P.37-38
Machine Tools & Mechatronics Business	P.39-40
TOGETHER WITH SOCIETY
Together With Society	P.41-42
Corporate Governance	P.43-50
Society	P.51-56
The Environment	P.57-60

	Foundation supporting JTEKT growth
		We promote the creation of a foundational
		governance structure and engage in social and
			environmental initiatives.	P.41~42
Corporate Governance			Social			The Environment
Governance structure for enhancing		Building relationships of trust with	Promoting environmentally aware
corporate value	P.43~50		all stakeholders	P.51~56	corporate activities	P.57~60

FINANCIAL PART
Financial Data	P.61-64
CORPORATE INFORMATION
Management	P.65-66
Group Companies	P.67-68
JTEKT by Region	P.69
Corporate Prole / Stock Information	P.70

03	* The financial-related figures and indicators shown in this report were prepared in accordance with Japanese generally accepted accounting principles (J-GAAP).	04
	Only the financial data	pages 61-64 are presented in accordance with International Financial. Reporting Standards (IFRS).

History

WHAT'S JTEKT

Since their establishment, Koyo Seiko and Toyoda Machine Works have continually perfected their technologies to provide high-quality and reliable products. JTEKT carries on this passion.

Going forward, we will continue to produce "No. 1 & Only One" products and move forward in our ambition to be a company that contributes to society.

1921-	2006-2009
Developed bearings-based technologies	Establishment of JTEKT,
for steering components and machine tools	accelerating globalization

We aim to contribute to a sustainable society and a brighter future by using our strengths as

the impetus for helping to resolve society's issues.

2010-20132014-2019

Transforming into a systems supplier

More solutions to social issues

The company we want to become

In 1921, Zenichiro Ikeda founded Koyo Seiko and began the domestic manufacturing of bearings. Utilizing our bearing-based technology, we developed and began manufacturing the electric power steering (EPS) system for the rst time in the world in 1988.

1960s bearing package

Electric power steering (EPS)

A period for creating synergies between the technologies and product lines of both companies. We accelerated globalization with the aim of becoming a top-level automobile parts manufacturer recognized worldwide.

	2007
Changes in corporate vision	"JTEKT VISION 2015"
	Creation & Innovation
	Ongoing global growth, becoming
	a truly global company

Transformative period during which JTEKT	JTEKT leaps forward as a global leading company.
became a supplier able to oer system proposals	Under the slogan "No. 1 & Only One" and an insistence on product and service quality
to customers.	we aimed to become an indispensable partner to our customers.
We aimed to conduct various tests and evalua-
tions from the same perspective as our customers.

2011	2014
Revised to "JTEKT VISION 2015"	"JTEKT GROUP VISION"	2016
Expanding business domain and	No. 1 & Only One
enhancing product strengths	Shaping a better future	Formulated the "JTEKT WAY"

1941-

Pursuit of machine tools, steering, and driveline component applications

In 1941, Machine tools department of Toyota Motor Corporation spun o to establish Toyoda Machine Works, Ltd. Developed and launched mass production of cylindrical grinders in 1965, hydraulic power steering in 1968 and electronic intelligent torque-controlled coupling (ITCC) for 4WD vehicles in 1998.

January

JTEKT is established

2007

2008

2009

Developed LFT-IIIsuper-low friction torque tapered roller bearing

Developed horizontal spindle machining center FH1250SW

Concluded agreement to acquire the needle bearing business of Timken Company in the Unites States

2011

2012

2013

Developed dual pinion-type electric power steering system (DP-EPS)

Opened Iga Proving Ground to test and analyze actual vehicle performance

Developed gear skiving center

2017 Established the JTEKT IT Center Akita Corporation as a software development base

2018 Launched sales of power assist suit (J-PAS)

2019 Established J-QuAD DYNAMICS Inc., a joint-venture company developing integrated software aimed at the adoption of automated driving

2020 Acquired shares in Yutaka Seimitsu Kogyo, Ltd., to strengthen 4WD driveline systems

Net sales (Billions of yen)

1,600

1,500

1,400

1,300

1,200

1,100

1,000

900

800

700

	4WD electronic
	intelligent
1960s cylindrical grinders	torque-controlled
coupling (ITCC)

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(FY)

	* JTEKT is the brand name of JTEKT Corporation's automotive components (steering and driveline components).  * Koyo is the brand name of JTEKT Corporation's bearings (including
05	bearings and oil seals).  *	is the brand name of JTEKT Corporation's Machine Tools & Mechatronics products.  * ITCC is a registered trademark of JTEKT Corporation.	* DP-EPS is a registered trademark of JTEKT Corporation.  * Gear skiving center is a registered trademark of JTEKT Corporation.  * J-PAS is a registered trademark of JTEKT Corporation.	06
	* LFT is a registered trademark of JTEKT Corporation.

JTEKT Business

The JTEKT Group innovates according to the needs of the times, creating high added value "No. 1 & Only One" products and services that please customers.

WHAT'S JTEKT

Steering business& Driveline

DrivelineBusiness business

"TORSEN" provides "safety and security" and "driving pleasure"

Leading supplier of	Sales composition ratio
components responsible for	62%
"driving" and "turning"

Sales composition ratio	Providing value
11%	in all phases of
	manufacturing

Machine Tools&

Mechatronics businessB

Cylindrical grinders with the No. 1 domestic market share supported by inherited and new technologies

TOYODA's grinding machine processing technologies cultivated through manufacturing in all industries contribute to the high precision of motor shafts

TORSEN supports stability and driving performance in sports cars, SUVs and other vehicles. It is also increasing adopted for use in FF vehicles.

The world's first successful development and mass production of electric power steering (EPS)

From the start of production in 1988 to the present day, JTEKT's EPS, which has the world's No. 1 share, contributes to a prosperous motorized society through improved fuel efficiency, safety and security.

and film rolls, as well as cams and crankshafts in automobile engines.

The world's first gear skiving technology installed in a machining center

Gear skiving centers, born from the "TORSEN" differential gear manufacturing plant for automobile parts, contributes to the high functionality of automotive gears, robots and motor units, facilitating new production methods.

Bearing businessB

Technology that supports the revolution of society and

Sales composition ratio

27

Diligently studying all the technologies

NewNewbusinessesBusiness

moves various industries more smoothly

%

possessed by JTEKT to create new value

Automotive bearings that meet the needs for automobile electrification and autonomous driving

JTEKT provides bearings in a timely manner suitable in all operating environments and conditions for the performance required of automobiles.

Compact, lightweight and long service life bearings for industrial machinery

As robots will likely become indispensable to our lifestyle in the future, smaller, lighter and longer-lasting bearings contribute to improved performance realizing highly accurate movements in narrow spaces.

Bearings that move semiconductor and LCD manufacturing machinery

"Special environment bearings" able to operate stably in vacuums, clean rooms, high temperature, corrosive and other environments are manufactured using materials, surface treatment and lubrication technologies.

World's first high heat-resistantlithium-ion capacitor

JTEKT developed the world's first high heat-resistantlithium-ion capacitor that can be used in environments from -40°C to 85°C. In addition to being installed in automobiles, it contributes to power supply management in a wide range of fields such as power generation equipment and aerospace.

Power assist suit J-PAS contributes to reducing work load burdens

In order to address declining birthrates, aging populations, labor shortages, rising work-related accidents and other social issues, JTEKT leveraged its strength in assist technologies as a manufacturer with production facilities to develop a product that reduces burdens placed on site workers, saves labor, creates safe workplaces and supports the active participation of a diverse range of human resources.

07

* TORSEN is a registered trademark of JTEKT Corporation.

08