NOK : Financial Results for the Fiscal Year Ended March 31, 202

Financial Results for FY2023

May 13, 2024

NOK Corporation

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Overview of FY2023 business performance

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Summary of consolidated results for FY2023

• Sales and operating profit increased (sales +5.7%, OP +49.0%).
• Seal segment made a steady growth and electronic products segment steadily reduced loss although we could not turn profitable this year. Consolidated results were lower than the initial forecasts of MTP first year.
• Net income significantly increased due to non-operating income and gain from sale of investment securities.

Net sales	FY23	FY24	Changes
710.0 bn yen	750.5 bn yen	+40.5 bn yen
Operating income	15.4 bn yen	22.9 bn yen	+7.5 bn yen
Net income	13.3 bn yen	31.6 bn yen	+18.3 bn yen
ROE	2.6 %	5.7 %	+3.1 pt

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MTP strategic initiatives review in FY2023

Growth driver

• Pursue opportunities for EV FPC for buttery application Acquire Estoh
• PJ to search new growth drivers

Management structure

• CxO structure introduced
• Transition to audit & supervisory committee*
• Global One NOK Purpose & Value, Internal engagement
• Introduce NOK Group CI

Leverage talents

• New HR system (from FY24 in Japan)
• Leadership training
• Discover and develop younger talents

Optimized resource

utilization

• Capital allocation along with MTP strategy (share buyback, divest investment securities)
• Pursue fair pricing strategy

*Subject to authorization in shareholders' meeting in June 2024	Copyright © NOK CORPORATION All Rights Reserved.

Business circumstances

Seal by region

-Automobile manufacturing volume recovered -Moderate growth going forward

China

-Japanese automakers struggle in the market

-Generalindustry machinery affected by slower economy Opportunity:

Sales growth for local customers

ASEAN

Japanese automakers struggle in the market

Risk:

Chinese EV OEM into the market

Electronic products

by application

Challenges in absorbing seasonal volatility in smartphone demands

Despite the recent slower-than forecast EV market development, transition to EV will continue

Opportunity:

OEMs have authority to determine buttery supply chain

Gradual recovery in HDD demand for data center usage observed from FY23 end

Corporate

New growth drivers necessary for continuous growth

Securing and developing talents is critical for growth

Strategic initiatives with swift decision making to address the current business circumstances

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Summary of FY2024 forecasts

Forecasting sales and operating income to decline.

Make necessary investment for mid-/long-term growth.

• Year-on-yeardecline in sales, (5.6)%, and OP, (4.9)%. Lower than MTP 2nd year assumption.
• Seal: Sales and OP to decline, including costs for future growth such as new business development and organizational structure transformation
• Electronic products: Expect turning into profitable

	FY23	FY24FCST	Changes	Ref) MTP 2nd year
Net sales		assumption
750.5 bn yen	708.3 bn yen	(42.2) bn yen		804.0 bn yen
Operating income	22.9 bn yen	21.8 bn yen	(1.1) bn yen		44.3 bn yen

MTP target

• Aim to achieve OP margin target, 6.8% for FY25, with sales growth and improved profitability

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Initiatives for sustainable growth: Seal segment

Grow sales and improve profitability to increase OP margin

Enhance business with local customers in China market

(Automobile, General industry machinery)

• Reinforce sales team in China with Chief Commercial Officer
• New R&D facility
• Meet customer needs for shorter lead-time, specs, cost and so on through development and manufacturing in China

Improve lower profitability

portfolio

(Automobile)

• Cost transfer negotiation
• Pursue transactions with fair pricing for lower profitability portfolio

New business area incl. green

energy, semiconductor etc

(General industry machinery)

• Value-addedproducts/materials leveraging NOK's technology to address needs in new areas

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Initiatives for sustainable growth: Electronic products segment

Solid business structure to absorb seasonal fluctuations in smartphone business

Volatile area

Address smartphone seasonality

• North America: Maintain current sales level and aim to levelling seasonal volatility
• Increased demand for Chinese high-end smartphones

Stable area

Expect solid profit foundation

• Continue current strategy to increase sales for automobile such as buttery application
  - Order from VW for BMS application expected to contribute since FY26
• Maintain higher profitability for HDD application with high market share

Transformation for profitability

• FY23 implemented: Expect financial benefit in FY24 from closure of a manufacturing site in Europe and reorganization in Taiwan
• Further transformation in FY24 under consideration

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Initiatives for sustainable growth : Create next business

Technology affinity Megatrend Social issues

Increase of electrical components due to the mobility revolution

Increase of touch between people and devices

Increase of the number of joints due to an evolution of robots

Expand our connecting technology

Combine our elastic material technology and sensors

Utilize our interface control technology for mechanical contacts

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Enhance corporate value

Sustainable enhancement of corporate value by strategic initiatives of MTP with penetration of our growth story through timely/fair disclosure

Improve ROE

Reduce

capital cost

Maximize profit

Capital policy

Improve profitability in each

segment

Create new growth drivers

Shareholder returns

Divest investment securities

Invest for growth

×

Transparency

Business

sustainability

Enhance IR/disclosure

Integrated report

Global management structure

for growth

Investment in talents

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