OSG : Release of 2016 Annual Report (2.3 MB)

HONING

OUR GROWTH ELEMENTS

ANNUAL REPORT 2016

Year ended November 30, 2016

WHAT ARE THE PRINCIPLES THAT SHAPE OUR WORLDWIDE GROWTH? CORPORATE PHILOSOPHY

Global Presence

As a comprehensive cutting tool manufacturer, we make products that at a fundamental level contribute to enhancing people's quality of life. Through continuous growth, we have established

a production, sales and technical support network spanning 33 countries. Our corporate aim is to continue to expand our operations globally and strengthen our contribution to the manufacturing industries in the world.

Tool Communication

To OSG, there is a close link between tools and communication. Not only is active two-way communication with customers an essential part of our product development, it is also vital when we assist them in the selection and application of tools, and provide after-sales service. Thus, communication is key to the success of our operations and to our commitment to develop ever-better products. Moreover, the excellent results brought by the use of high-quality tools help to enhance business relationships.

PROFILE

OSG manufactures and sells a comprehensive range of cutting tools, especially products that are attached to machine tools for use in metal processing.

Since its establishment in 1938, OSG has supported manufacturing worldwide by consistently creating high- quality, high-added-value products for use in automotive and aerospace manufacturing and many other industries.

A manufacturer of taps since its founding, OSG today boasts the biggest share of the world market for these products.

Today OSG Group employees at manufacturing and sales sites in 33 countries are united in their dedication to

shaping customers' dreams into reality.

OSG's targets for the year ending November 2020 are net sales of ¥150 billion and operating profit of ¥30 billion.

CONTENTS

Cautionary Statement

We would like to advise you that some forward-looking plans, prospects, and strategies, etc., written in this Report that are not historical facts have the possibility of including risk and uncertainties caused by future changes of surrounding circumstances. We would appreciate your understanding that actual results may differ from plans, prospects, and strategies, etc.

02 ELEMENTS FOR GROWTH

1. FINANCIALHIGHLIGHTS

2. AN INTERVIEW WITH THE PRESIDENT

14 SPECIAL FEATURE: TRIPLE A

1. SOCIAL CONTRIBUTION AND ENVIRONMENTAL PROTECTION

2. FINANCIALSECTION

57 BOARD OF DIRECTORS

57 INVESTORINFORMATION

01

0ELEMENTS F O1R GROWTH

INNOVATION

Creating Tools with Equipment Developed In-House

The three key elements that determine the performance of tools

% of Sales by Product

10%

are materials, shapes, and coatings. OSG is one of the few toolmakers in the world to develop and manufacture these three elements in-house. Carbide tool materials and coatings that dramatically extend tool life are developed by the OSG parent company and produced within the OSG Group. The production

9%

24%

Taps Drills End mills

32%

25%

equipment used to shape these materials is also manufactured by the OSG parent company. By developing and manufacturing these elements in-house, OSG is able to differentiate itself from competitors by creating products that offer both strong cost performance and high added value.

Rolling dies

Gauges and other products

02