Disclaimer Regarding Forward-looking Statements. These presentation materials and the related discussions contain forward-looking statements

Transcription

1 TSE: 6594 OTC US: NJDCY Third Quarter Fiscal 216 Results Three and Nine Months Ended December 31, 216 <IFRS> January 24, 217 Disclaimer Regarding Forward-looking Statements These presentation materials and the related discussions contain forward-looking statements including expectations, estimates, projections, plans and strategies. Such forward-looking statements are based on management s targets, assumptions and beliefs in light of the information currently available. Certain risks, uncertainties and other facrs could cause actual results differ materially a from those discussed in the forward-looking owad oo statements. e ts. Such risks s and aduceta uncertainties tes include, but are not limited, changes in cusmer circumstances and demand, exchange rate fluctuations, and the Nidec Group s ability design, develop, mass produce and win acceptance of its products and acquire and successfully integrate companies with complementary technologies and product lines. Please see other disclosure documents filed or published by the Nidec Group companies, including the Japanese securities report, for additional information regarding such risks and uncertainties. Nidec undertakes no obligation update the forward-looking statements unless required by law. The first slide features a picture of Nidec Arisa s servo press with pressurizing capacity of 4,5 ns, the largest of its kind in the world. Nidec Arisa, based in Spain has recently received an initial order for this new servo press from Gestamp Aumoción, one of the largest manufacturers of metal aumotive components. 2

2 Consolidated Profit/Loss (IFRS-Based)* Millions of Yen, except for EPS and FX rate 3Q/FY215 (Apr Dec) 3Q/FY216 (Apr-Dec) Change FY216 Forecast Nt Net sales 895, ,228-3.% 3% 1,2, Operating profit 9,286 16, % 14, Operating profit ratio 1.1% 1% 12.2% 2% % Profit before income taxes 92,467 17, % 14, Profit attributable owners of the parent 69,526 81, % 15, EPS (Yen) % FX rate (Yen/US$) Average: Term end: % -3.4% 11. (Assumed for 4Q) Note: Based on the current forecast of sales volume, every one yen appreciation or depreciation against the U.S. dollar and the euro for FY216 is estimated have an annualized impact of 7. billion yen and 1.1 billion yen on net sales, respectively, and 1.1 billion yen and.3 billion yen on operating profit, respectively. *From FY216 onward, our financial statements are prepared under International Financial Reporting Standards (IFRS). 3 Summary of 3Q FY216 Record-high nine months operating profit, profit before income taxes and profit attributable owners of the parent Record-high three months profit before income taxes and profit attributable owners of the parent Double-digit operating profit ratio maintained for both three and nine month periods (1.5%) in Aumotive, Appliance, Commercial and Industrial Products, which are key drivers of the company s business portfolio transformation Upward revision i FY216 profit forecasts 4

3 IFRS-Based Year-on-Year Changes (Nine Months Ended Dec. 216) <Net Sales> Apr-Dec/FY15 Exchange rate Small precision mors Aumotive, appliance, commercial and industrial <Operating Profit> products Machinery +3.6 Electronic and optical components and others -.9 Apr-Dec/FY Apr-Dec/FY15 Exchange rate Small precision mors Aumotive, appliance, commercial and industrial products Machinery Electronic and optical components and others Eliminations/ corporate Apr-Dec/FY16 5 IFRS-Based Quarter-on-Quarter Changes (Three Months Ended Dec. 31) <Net Sales> Jul-Sep/FY16 <Operating Profit> Aumotive, Exchange Small precision appliance, Machinery rate mors commercial and industrial +2.4 products Electronic and optical components and others -.7 Oct-Dec/FY Jul-Sep/FY16 Exchange rate Small precision mors Aumotive, appliance, commercial and industrial products Machinery Electronic and optical components and others Eliminations/ corporate Oct-Dec/FY16 6

4 Upward Revision FY216 Profit Forecasts (IFRS-Based) <FY216 Full-Year Financial Forecasts> Millions of Yen, except As of Apr. 25, for EPS, dividends and FX rate 216 Net sales 1,25, Operating profit 13, Operating profit ratio 1.4% As of Oct. 24, 216 1,2, 135, 11.3% As of Jan. 24, 217 1,2, 14, 11.7% Profit before income taxes 13, Profit attributable owners of the parent 98, EPS (Yen) Dividends (Yen) 8. FX rate (Yen/US$) FX rate (Yen/ ) (Assumed) 133, 1, (Assumed for 3Q 14, 15, (Assumed for 4Q) onward) 7 Mid-Term Strategic Goal Vision22 i This section includes forward-looking statements. See Disclaimer on Page 2. 8

5 Vision22: Mid-Term Strategic Goal Continuous pursuit of profit & strong growth 1. Target for consolidated net sales: 2 trillion yen (including sales attributable b new M&A of approx. 5 billion yen) 2. Sales target for aumotive: 7 billion 1 trillion yen 3. Target for consolidated operating profit ratio: 15% 4. Target for ROE: 18% (assuming shareholders equity ratio of 6%) 5Fi 5. Five regional lhq management units 9 Continuing Growth Strategy with a Focus on Key Growth Areas FY21 Net sales: 676 billion yen FY215 Net sales: trillion yen FY22 Net sales: 2 trillion yen (target) (Sales: Billions of Yen) 7. Small precision mors Aumotive Appliance, commercial and industrial products Other product groups 1 T New M&A Key Growth Areas Key Growth Areas Key Growth Areas

6 Key Growth Areas Outpace Initial Projections Small precision mors (Sales: Billions of Yen) 4 6 FY22 Net Sales: 2 trillion yen (Target) Aumotive Appliance, commercial and industrial products T 1 T New M&A Other product groups New M&A billion-yen organic sales growth coming in view for both Aumotive and Appliance, Commercial and Industrial Products Solid progress ward achieving sales target of 2 trillion yen in FY22 Key Growth Areas Key Growth Areas 11 Small Precision Mors Growth Outlook (Sales: Billions of Yen) (Operating Profit Ratio: %) Vibration mors, tactile devices Other small precision mors (excl. vibration mors and tactile devices) Target! HDD mors 6 Operating profit ratio 2% 4 2 FY15 FY16 FY17 FY18 FY19 FY2 Nidec estimates based on various sources. Sales expected expand at CAGR 6% FY22 HDD mors 15% Leveling off Other small precision mors 1% Double-digit growth driven by a constant flow of new products 5% Aiming exceed 2% operating profit ratio % 12

7 HDD Market Mid-Term Trend Shipping volume PC External Consumer Electronics Data Center (Millions of Units) (Near Line Drive) HDD Capacity (RHS) HDD Shipments (LHS) Enterprise 341 Capacity (Exabyte: 1 18 Byte) Continuous increase in HDD capacity Shipments t on downward trend '13 '14 '15 '16 '17 '18 '19 '2 (CY) Industry sales HDD unit price (Billions of US dollars) 4 8 (USD) HDD unit price (RHS) Sales of HDD industry (LHS) HDD unit price (in USD terms) on uptrend HDD industry sales remaining flat '13 '14 '15 '16 '17 '18 '19 '2 (CY) Nidec estimates based on various sources. This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 13 HDD Market Short-Term Trend 99 HDD Shipments Previous FY216 Forecast (Ocber 25, 216) Nidec Mor Shipments (Millions of Units) 3Q/FY16 results Revised FY216 Forecast (January 24, 217) surpassed initial forecast Annual A lforecast revised upward <Previous FY216 Forecast (Ocber 25, 216)> 86 HDD shipments: 41 mil. units/year Nidec mor shipments: 353 mil. units/year FY16/1Q 2Q 3Q 4Q (Actual) (Actual) FY16/1Q 2Q 3Q 4Q (Forecast) (Forecast) (Actual) (Actual) (Actual) (Forecast) <Revised FY216 Forecast (January 24, 217)> HDD shipments: 425 mil. units/year Nidec mor shipments: 368 mil. units/year Nidec estimates based on various sources. 14

8 Vision22 : Targeting Operating Profit of 3 Billion Yen Three key hands-on management approaches ward achieving higher profitability 1 Well-digging management A well of limitless ideas needs constant digging keep flowing Accelerate growth on absolute profit amounts Household accounts management 2 Well-digging Live within your means. Household accounts 1 cuts management 3 1 cuts A big issue is not that big once it is cut in smaller pieces. 15 Improvement in Profitability of Aumotive (Example: Subsidiary A) Tackle with underlining issues per cost category through well-digging and 1 cuts approaches within PDCA cycle (Operating 2% profit ratio) <Operating profit ratio improvement> Plan and implement on a weekly basis (executive officer) 15% Target! Procurement cost 1% Labor cost Direct expenses SGA 5% C A Execute improvement measures and compile feedback P Follow up the daily progress (CFO project team) D % 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Establish improvement measures (CEO and officers ) FY15 FY16 16

9 Improvement in Profitability of Appliance, Commercial and Industrial Products (Example: Subsidiary B) Well-digging approach triggering active flow of VE*/VA** ideas; continuous procurement cost reduction enabled through 1 cuts approach (Cost-profit ratio ) 1% 75% 5% 25% <Operating profit ratio improvement> Target! Less than 1% Less than 6% Less than 15% Start with focusing on procurement cost reduction Over 15% Mid-5% Operating profit po ratio Procurement cost ratio Direct labor cost ratio Indirect labor cost ratio Fixed cost ratio Cost reducing solutions through VE/VA Enhanced productivity in overseas manufacturing sites (labor downsizing) Cost reduction through integrated purchasing (economies of scale) Promotion of in-house parts production and local purchasing % 1H 2H 1H 2H (Forecast) FY15 FY16 *VE: Value Engineering ** VA: Value Analysis 17 Acquisition of U.S.-Based Cann Elevar, Inc. Accelerate elevar package business in North American market <Transaction profile> <Complementary products> Strong presence Weak presence Company name Cann Elevar, Inc. Headquarters North Cann, Ohio, U.S. Foundation 1946 Subsidiary Direcrs Principal business Employees 98 Sales Cann Architectural Products, Inc. Direcr and Chairman: Pradeep Sood (Business Platform Leader of the Elevar & Drive Systems business of Nidec Appliance, Commercial & Industrial Mor Business Unit) Direcr and President: Bryan Haught, former Sales Vice President of Cann Other two direcrs Design, manufacture and sales of commercial, residential, and freight elevar systems and components US$33.7 million (fiscal year ended December 31, 215) Package Cabinet Control Mor <Products> Cann After acquisition <Elevar package> <Elevar cabinet> <Parts> Hydraulic jack Hydraulic power unit 18

10 Vision23: Stepping Snes ward Becoming 1-Trillion Yen Company (1) 1. Fifty-fifty sales contribution from M&A and organic expansion re-boosting growth Nidec Corporation Head Office ANNEX Global Learning Center (completion o scheduled for spring 217) 2. New incubar for globally competent employees slated for completion this spring Global Learning Center 3. Expansion of Nidec Center for Industrial Science ce New level of craftsmanship based on modern manufacturing science Nidec Center for Industrial Science First-phase construction (left): completion scheduled for January 218 Second-phase construction (right): completion scheduled for Vision23: Stepping Snes ward Becoming 1-Trillion Yen Company (2) 1. Enriching the pool of human resources for future business expansion Management, technology 2. Following through on Work Style Reform Highly productive and globally competitive company Work Style Reform motivational poster 3. Closing gender gaps in leadership positions (particularly in Japan) Supportive work place environment 2

11 Vision23: Stepping Snes ward Becoming 1-Trillion Yen Company (3) 1. Raising brand recognition TV commercials, corporate website, etc. Brand promotion scheme featuring a popular Kyo native acr Kuranosuke Sasaki 2. Enhancing corporate identity Brand unification 3. Integrating all group companies unified d wage and performance appraisal system personnel lexchange Professional baseball sponsorship (Tokyo Yomiuri Giants) 21 Nidec IR Contacts Japan Tel: ir@nidec.com U.K. Tel: iwai.yuji@nidec.com US U.S. Tel: nagase.kiyoshi@nidec.com com Nidec logo is a registered trademark or a trademark of Nidec Corporation in Japan, the United States and/or certain other countries. All for dreams logo is a registered trademark of Nidec Corporation in Japan, and a trademark in the United States and/or certain other countries. 22

12 Appendix Performance Trends & Product Group Overview 23 Sales by Product Group (Apr-Dec FY216) (IFRS-Based) Electronic & Optical Components Others 3%.3% Parenthetic percentages represent FY215 mix (.3%) Services, music box products Camera shutters, switches, trimmer potentiometers, processing, precision plastic mold products 5.5% (5.5%) Small Precision Mors Machinery 1.% (9.%) HDD Mors 16.6% 6% (18.1%) 38.1% (39.3%) Industrial robots, circuit board testers, high-speed pressing machines, chip mounters, measuring equipment, power transmission equipment, facry aumation system, card readers Aumotive, Appliance, Commercial and Industrial Products 46.2% (45.9%) Appliance 21.5% Other Small Mors Commercial B (21.2%) Optical disk drive mors, Industrial OA equipment mors, 24.2% polygon scanners mors, MPU (23.2%) cooling fans, game machine fans, Au PC/communications equipment 22.% fans, home appliance fans, (22.7%) aumobile fans, vibration mors, brushed mors, stepping mors, actuar units 24

13 Financial Highlights (IFRS-Based) <Consolidated d Net Sales & Operating Profit> <Consolidated Profit Before Tax & Profit> Net sales Operating profit Operating profit ratio (%) % 9.8% % 9.7% % % 11.4% Profit before income taxes Profit attributable owners of the parent Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q 1Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q <Dividends and EPS> (Yen/share) <Consolidated Cash Flow> Year-end Interim Consolidated EPS Operating activities Investment activities Free cash flow 354 (Forecast) (Forecast) Apr-Dec/FY15 Apr-Dec/FY16 FY15 FY16 25 Product Group Overview (IFRS-Based) <Small llprecision i Mors> <Aumotive, Appliance, Commercial &Industrial lproducts> Sales Operating profit Sales Operating profit Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q 1Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q <Machinery > <Electronic and Optical Components> Sales Operating profit Sales Operating profit Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q 1Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q 26

14 Consolidated Quarterly Sales and Operating Profit (Net Sales in (Operating Profit in Billions of Yen) 4 4 Billions of Yen) Sales (LHS) Operating profit (RHS) Japan earthquake 15 1 Lehman crisis Thai floods 1 5 Structural reform 5 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q -5 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY U.S. GAAP IFRS 27 Vision 22: Targets for Net Sales and Operating Profit Ratio Aiming for both sales growth (organic + M&A) and profitability enhancement (Net Sales in (Operating Profit Trillions of Yen) Ratio, %) % Net sales 676.B Net sales 571.6B 13.7% Net sales 682.3B 1.7% 1.8% 1.% 9.7% Net sales Net sales 1.18T Net sales 1.3T 79.3B Net sales 875.1B 2.5% 11.7% Net sales 1.2T 15% Net sales 2T New M&A 1 5 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY2 (Forecast) (Target) U.S. GAAP IFRS 28

15 Vision 22: Pursuing Both Strong Growth with Profit and Financial Soundness Targeting operating profit ratio of 15% and ROE of 18% while sustaining i and improving i financial i soundness Shareholders equity (LHS) ROE (RHS) Shareholders equity ratio (RHS) Operating profit ratio (RHS) (%) 1,5 65% 6% 55.4% 6% The three elements for 54.9% ROE improvement 1,2 55% Net profit on sales 49.1% Total asset turnover 47.5% 46.2% 5% Financial leverage 44.4% 42.3% % 45% Shareholders equity ratio ROE 3 Operating profit ratio 16.3% 18% 15.% % 11.2% % 12.% 11.9% 15% 9.2% 15% 13.9% 13.7% 1% 8.9% % 2.5% 9.7% 1.8% 1.% % % % FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY2 (Target) U.S. GAAP IFRS 29