JTEKT : REPORT 2021

JTEKT

Report 2021

WHAT'S JTEKT

SHAPING A BETTER FUTURE

TOGETHER WITH SOCIETY

FINANCIAL DATA

CORPORATE INFORMATION

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				Building		Building
Value				Excellent Products	Professionals
Provide value to customers by	Astonish the world with monozukuri,	Develop a team composed of
delivering products and services that	the art of rened craftsmanship and	individuals working together, acting
exceed their expectations.	superior quality.	with initiative, condence, pride, and
					passion as global members of JTEKT.

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 Initiative) Standards
• Japan's Ministry of the Environment "Environmental Reporting Guidelines (2018 edition)"
• ISO 26000 (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 2021 (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 unconsolidated 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

WHAT'S JTEKT

SHAPING A BETTER FUTURE

TO

GETHER WITH SOCIETY

FINANCIAL DATA

CORPORATE INFORMATION

Report Compositional Elements

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."

Management Principles

Business Environment Awareness

The basic philosophy at the core of the JTEKT

We recognize the strengths cultivated since our

Strategies

Group. An identity that systematically indicates

founding and the social structures and market

what we should be.

economies that change over time, reecting

both in our growth strategies.

CORPORATE PHILOSOPHY

External Environment Awareness

Business Strategies

Seek to contribute to the happiness of people and

We perceive social issues from the perspective of

Based on our recognition of the business environment, we

the abundance of society through product manufacturing

markets and customers.

formulate business strategies from a long-term perspective.

JTEKT's Strengths

We execute these strategies to achieve our goals.

that wins the trust of society.

JTEKT's core technologies and the new technologies

JTEKT GROUP VISION

created from them.

No. 1 & Only One

Core technologies

No. 1 & Only One

Precision

Materials

Measure-

Tribology

Shaping a Better Future

processing

Control

ment

Medium- to Long-term Business Plan

We formulated our Vision 2030 and Medium- to

Long-term Business Plan.

New technologies

Various Capital Strategies

Acceleration of new product development

Building

Building

Building

We support our business strategies with nancial and

Value

Excellent Products

Professionals

a variety of other capital strategies.

P01~02, P05~10

P11~18, P37~44, P71~78

P19~44

c o n t e n t s
WHAT'S JTEKT
01-02		Management Principles / Editorial Policy
03-04		Report Compositional Elements / Contents
05-06		History
07-08		JTEKT Business
09-10		Value Creation Model
SHAPING A BETTER FUTURE
11-18	A Message from the President
19-26	Medium- to Long-term Business Plan
27-36		JTEKT Capital Strategy				27-28		Financial Capital
									29-30		Manufactured Capital
									31-32		Intellectual Capital
									33-36		Human Capital
37-44		Review of			37-38		Automotive Business Unit
		Operations			39-40		Industrial & Bearings Business Unit
					41-42		Machine Tools & Systems Business Unit
					43-44		Aftermarket Business Unit
TOGETHER WITH SOCIETY
45-46	JTEKT's CSR / Materiality
47-48		Management
49-54		Corporate Governance
55-58	Discussion with Outside Management
59-64		Society
65-70		The Environment

Foundation supporting JTEKT growth

We promote the creation of

a foundational governance structure and engage in social and environmental initiatives.

P45~46

					FINANCIAL DATA
Corporate					71-72		Eleven-Year Consolidated Financial Summary
	Society		The Environment	73-74		Financial Statements
Governance
Governance structure for enhancing		Building relationships of trust		Promoting environmentally aware	CORPORATE INFORMATION
corporate value		with all stakeholders		corporate activities
		75-76		Group Companies
P47~58		P59~64		P65~70
		77		JTEKT by Region
					78		Corporate Prole / Stock Information

03

04

WHAT'S JTEKT

History

History

Carrying on passion and aiming to be No. 1 & Only One

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.

2006-2009

2010-2013

2014-2020

2021-2030

Establishment of JTEKT,

Transforming into

More solutions to social issues

Formulation of Medium- to

Developed bearings-based technologies

accelerating globalization

a systems supplier

Long-term Business Plan

Determination of materiality

for steering components and machine tools

A period for creating synergies

Transformative period during which

JTEKT leaps forward as a global leading company.

Business unit reorganization

In 1921, Zenichiro Ikeda founded Koyo Seiko and

between the technologies and

JTEKT became a supplier able to oer

Under the slogan "No. 1 & Only One" and an insistence on

product lines of both companies.

system proposals to customers.

product and service quality we aimed to become an

Formulation of targets for carbon neutrality

began the domestic manufacturing of bearings.

We accelerated globalization with

We aimed to conduct various tests

Net sales indispensable partner to our customers.

Utilizing our bearing-based technology, we developed

the aim of becoming a top-level

and evaluations from the same

16,000

(Billions of yen)

and began manufacturing the electric power steering

automobile parts manufacturer

perspective as our customers.

15,000

Formulation of JTEKT's Version of TQM

(EPS) system for the rst time in the world in 1988.

recognized worldwide.

14,000

13,000

12,000

11,000

For the earth

10,000

9,000

For society

8,000

For customers

7,000

1960s bearing package

Electric power steering (EPS)

2006

2007

2008

2009

2010

2011

2012

2013

(FY)

2014

2015

2016

2017

2018

2019

2020

Passion

1921-

2007

2011

2014

Continuous

Total

"JTEKT VISION 2015"

Revised to "JTEKT VISION 2015"

"JTEKT GROUP VISION"

Kaizen

Participation

2016

-

January

Creation & Innovation

Expanding business domain and

No. 1 & Only One

Ongoing global growth, becoming

enhancing product strengths

Shaping a better future

Formulated the "JTEKT WAY"

JTEKT is established

1941

a truly global company

Pursuit of machine tools, steering, and driveline component applications

		In 1941, Machine tools department of Toyota Motor	2007
		Corporation spun o to	establish Toyoda Machine	Developed LFT-III*4 super-low friction
		Works, Ltd. Developed and launched mass production	torque*5 tapered roller bearing
		of cylindrical grinders*1 in 1965, hydraulic power
		steering*2 in 1968 and electronic intelligent torque-con-
		trolled coupling (ITCC*3) for 4WD vehicles in 1998.
								2008
								Developed horizontal spindle machining
								center*6 FH1250SW
						4WD electronic intelligent
				1960s cylindrical grinders	torque-controlled coupling (ITCC)
		*1 A machine that uses a rotating wheel to grind the surface of a workpiece.
		*2 A steering mechanism that uses the engine to drive a pump and hydraulic
			pressure to provide assistance.
		*3 Intelligent Torque Controlled Coupling: A mechanism that detects the
			dierence in rotation between the front and rear wheels and electronically
			controls the front and rear wheels for optimal torque distribution.	2009
		*4 Low Friction Torque
		*5 The ability to move objects with little force (equivalent to low friction)	Concluded agreement to acquire the
		*6 A numerically controlled machine tool that has an automatic tool change
		needle bearing business of Timken
			function and performs dierent types of machining, such as milling, boring,
			Company in the Unites States
			drilling, and tapping, in a single unit according to the purpose.
		*7 A machine that performs gear cutting using the relative velocity generated by
			tilting and rotating the tool and workpiece.

2011

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

2012

Opened Iga Proving Ground to test and analyze actual vehicle performance

2012

Developed gear skiving center*7

2017

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

2018

Launched sales of power assist suit (J-PAS*8)

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

2020

Relocation of Head Oce to Kariya City,

Aichi Prefecture

*8 JTEKT's Power Assist Suit

* 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 & Systems products. * ITCC is a registered trademark of JTEKT Corporation.

• LFT 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.	06
* J-PAS is a registered trademark of JTEKT Corporation.

WHAT'S JTEKT

SHAPING A BETTER FUTURE

TOGETHER WITH SOCIETY

FINANCIAL DATA

CORPORATE INFORMATION

JTEKT Business

JTEKT Business

Contribute to a prosperous society with diverse technologies and high-quality products

New Businesses

Diligently studying all the technologies possessed by JTEKT to create new value

We will create products and services that exceed customer expectations by more accurately and speedily grasping the needs of the market.

Automotive Business UnitP37~38

Leading supplier of components responsible for "driving" and "turning"

The world's rst 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 eciency, safety and security.

"TORSEN*1" provides "safety and security" and "driving pleasure"

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

*1 A type of LSD (limited slip dierential), a drive line device that optimally distributes torque between the left and right or front and rear axles when a vehicle turns.

World's rst high heat-resistantlithium-ion capacitor*2

JTEKT developed the world's rst 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 elds such as power generation equipment and aerospace.

*2 A capacitor that increases energy density by adding lithium ions to the negative electrode material of a capacitor with an electric double layer of positive and negative electrodes.

Power assist suit J-PAS*3 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 strengths in assist technologies and 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.

*3 JTEKT's Power Assist Suit

Aftermarket Business Unit

P43~44

Finding value in using the product to the end

We aim to meet the needs of a circular society and become a solution partner that supports the product life cycle.

In the repair market, we will create new value from the customer's point of view and
provide a wide variety of products, services, and joy.	A wide variety of products

Industrial & Bearings	P39~40
Business Unit

Technology that supports the revolution of society and moves various industries more smoothly

Automotive bearings that meet the needs for automobile electrication 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

Machine Tools &	P41~42
Systems Business Unit

Providing value in all phases of manufacturing

Cylindrical grinders*4 with the No. 1 domestic market share supported by inherited and new technologies

Grinding machine processing technologies cultivated through manufacturing in all industries contribute to the high precision of motor shafts and lm rolls, as well as cams and crankshafts in automobile engines.

*4 A machine that uses a rotating wheel to grind the surface of a workpiece.

The world's rst gear skiving*5 technology installed in a machining center*6

"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.

Gear skiving centers, born from the "TORSEN" dierential*7 gear manufacturing plant for automobile parts, contributes to the high functionality of automotive gears, robots and motor units, facilitating new production methods.

*5 A machine that performs gear cutting using the relative velocity generated by tilting and rotating the tool and workpiece.

*6 A numerically controlled machine tool that has an automatic tool change function and performs dierent types of machining, such as milling, boring, drilling, and tapping, in a single unit according to the purpose. *7 A mechanism that absorbs the dierence in rotation between the left and right wheels for smooth turning.

07 * TORSEN is a registered trademark of JTEKT Corporation.

* J-PAS is a registered trademark of JTEKT Corporation.

08