Slide 4
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and NTN will focus on drastic and fundamental measures, so that there should not
be any more Impairment Loss in 2019.
Although I said there should not be Impairment Loss any more in 2019, we found
that only our Taper Roller Bearing Business in Okayama and Akaiwa cannot avoid
Impairment Loss, estimated amount of this Loss was less than 2 billion yen.
We started discussion with E&Y on this estimation at the end of February to finalize
the Impairment Loss. NTN and E&Y, at that time, both thought that the impact of
COVID-19 should be excluded from the calculation of Impairment Loss.
Then, as the impact of COVID-19 is getting more and more serious, E&Y together
with Japan CPA association strongly told us to include the impact of COVID-19, and
we agreed and decided to do so.
We therefore revised each business plan, average 20% sales reduction in 2020, not
full recovery in 2021, no sales increase after 2021 during the remaining depreciation
period. Under such conservative assumption, Impairment Loss was calculated as 22
billion yen in Japan, instead of previous estimation of 2 billion yen without COVID-
19. As for Global Impairment Loss, we applied the same concept to overseas, Bower
5.5 billion yen and DMF 1.5 billion yen. Global Total 29 billion yen.
At the Financial Settlement Briefing Meeting for 2019, I explained this story and
that our Impairment Loss of 29 billion yen will reduce the amount of Depreciation by
3.5 billion yen, which will speed up our Recovery in the future.
In the meantime, I had discussed with our main bank Mitsubishi in March, and
received the Commitment of additional cash of 100 billion yen to prepare for COVID-
19. FCF of NTN Consolidated in 2020 is estimated around negative 50 billion yen,
so the Commitment Line of 100 billion shall be more than enough. So, Don’t worry!!
We have enough cash to survive in 2020.
We also have to understand that NTN Japan cannot support the overseas activities
in various costs of such as Japanese Expats, Engineering Drawings and Testing
under the current situations, so we made radical changes that gave negative impact
to our overseas business in 2019.