AKEBONO REPORT 2016

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Initiative 1Rebuild ABC foundationBusinessHigh Performance Main productsHigh performance disc brakes, brake padsFoundation BrakesDisc brakes, drum brakes, mechanical parts, etc.Infrastructure and MobilityProducts for rolling stock, industrial machinery and sensors FrictionBrake pads, lining and other friction materialsAftermarketBrake pads, linings and other aftermarket partsInitiative 2Stronger cost managementAbsolute commitment to differentiated products, light weight, high performance, enhanced design and high qualityInitiative 3Increase productivityInitiative 1Control InvestmentCAPEX¥18.6 billion (Fiscal 2015 actual)Annual CAPEX amount ¥15.0 billion maximumInitiative 2Reduce SG&A*Initiative 3Prioritize R&DR&DStrategyExpand on technologies gained through business in Europe, especially with premium German automakers, to develop and increase sales of high performance products to other companiesSalesStrategySG&A* sales ratio in Japan 14.5%(Fiscal 2015 actual)12% by Fiscal 2018Shift priority from application R&D to advanced R&DReduce R&D costs to ¥10.0 billion by Fiscal 2018*Selling, general and administrative expenses132EuropeNorth AmericaJapanGermanySales and R&DUnited States (calipers)Production and R&DJapan (pads and calipers)Production and R&DSlovakia (calipers)ProductionFrance (pads)Production and R&D- Strengthened management and organizational improvements led by Akebono Brake Corporation- Strengthen high performance brake development structure centered in Europe- Strengthen integrated production of high performance aluminum caliper brakes at Slovakia Plant- Necessary adjustments to sales and purchasing prices- Utilization of Mexico Plant- Strengthen foundations with a return to fundamentals in terms of safety, quality and lead times- Establish product-based business units responsible for sales, R&D, purchasing, production, manufacturing engineering and other functions- Establish a global strategy through enhanced regional marketing functions- Carry out a global product strategy based on the concept of standardization and topping (S+t)- Rationalization effects achieved through global purchasing activitiesRebuilding the North American OperationsRegain customer trust and return to profitabilityHigh Performance Brake Business StructureEstablishing Global Networks Based on Product-based Business UnitsReturn to a Sound Financial ConditionExpanding High Performance Brake Businessand Recreating European OperationsMidtermBusiness Plan8AKEBONO REPORT 2016