Nidec Corporation. First Quarter Fiscal 2016 Results. Note Regarding Forward-looking Statements

Transcription

1 TSE: 6594 OTC US: NJDCY Nidec Corporation First Quarter Fiscal 216 Results Three Months Ended June 3, 216 <> July 22, 216 Note 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 factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, changes in customer circumstances and demand, exchange rate fluctuations, and the Nidec Group s ability to design, develop, mass produce and win acceptance of its products and to 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 to update the forward-looking statements unless required by law. The photograph on the first slide is of the oil and gas pipeline network extending around 8, km operated by Transneft, one of Russia s largest oil transportation companies. Nidec ASI S.p.A, a Nidec s subsidiary specializing in industrial solutions, signed a contract worth 125 million euros with Russian Electric Motors, a joint venture between Transneft and Konar which is Russia s largest manufacturer of valves and fittings for pipelines. 2 1

2 Consolidated Profit/Loss (-Based)* Millions of Yen, except for EPS, and FX rate 1Q FY215 1Q FY216 Change FY216 Forecast Net sales 285,41 276,26-3.1% 1,25, Operating profit 29,859 31, % 13, Operating profit ratio 1.5% 11.4% - 1.4% Profit before income taxes 31,591 29,13-7.9% 13, Profit attributable to owners of the parent 23,251 22,41-5.2% 98, EPS (Yen) % FX rate (Yen/US$) Average: Term end: % -16.% 15. (Assumed for 2Q onward) 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 to 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 (). This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 3 Summary of 1Q FY216 Transition to International Financial Reporting Standards () from U.S. GAAP Operating profit increased 6% Y/Y, marking quarterly record high, despite a 3% decline in net sales Y/Y Continued improvement in operating profit ratio of automotive, ti appliance, commercial and industrial i products which are key drivers of the company s business portfolio transformation 4 2

3 Transition to -Based Disclosure Purposes To improve the efficiency of group s business management and financial reporting conforming to the global standards Accounting standards until FY215 Accounting standards from FY216 onward Managerial accounting Operating profit Impact on operating profit U.S. GAAP due to transition to = 5 (Unified group-wide managerial accounting method) 5 -Based Year-on-Year Changes <Net Sales> Q/FY15 <Operating Profit> Exchange rate Small precision motors Automotive, appliance, commercial and industrial products Machinery Electronic and optical components and others Q/FY Q/FY15 Exchange rate Small precision motors Automotive, appliance, commercial and industrial products Machinery Electronic and optical components and others Eliminations/ corporate 1Q/FY16 6 3

4 -Based Quarter-on-Quarter Changes <Net Sales> Q/FY15 <Operating Profit> Exchange rate Small precision motors Automotive, appliance, commercial and industrial products Machinery Electronic and optical components and others -.6 1Q/FY Q/FY15 Exchange rate One-time gain Small precision motors Automotive, appliance, commercial and industrial products Machinery Electronic Eliminations/ and optical corporate components and others 1Q/FY16 7 FY216 Forecast (-Based) Millions of Yen, except for EPS, dividends and FX rate 1H/FY216 2H/FY216 Full-Year Net sales 6, 65, 1,25, Operating profit 63,5 66,5 13, Operating profit ratio 1.6% 1.2% 1.4% Profit before income taxes 63,5 66,5 13, Profit attributable to owners of the parent 48, 5, 98, EPS (Yen) Dividends (Yen) FX rate (Yen/US$) FX rate (Yen/Euro) (Assumed for 2Q onward) (Assumed for 2Q onward) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 8 4

5 Consolidated Quarterly Sales and Operating Profit (Sales in Billions of Yen) 35 Sales (LHS) 3 Operating Profit (RHS) (Operating Profit in Billions of Yen) 35 Record-high quarterly operating profit Lehman Crisis Japan Earthquake Thai Floods Structural Reform Record-high operating profit despite drastic yen s appreciation 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 -5 FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY U.S. GAAP 9 HDD Market Short-Term Trend 95 Previous FY216 Forecast (April 26, 216) HDD Shipments (Millions of Units) Nidec Motor Shipments Revised FY216 Forecast (July 22, 216) Q/FY16 results barely exceeded initial forecast. Annual forecast remains unchanged HDD shipment: 4 mil. units/year Nidec motor shipment: 34 mil. units/year FY16/1Q 2Q 3Q 4Q FY16/1Q 2Q 3Q 4Q (Forecast) (Forecast) (Forecast) (Forecast) (Forecast) (Forecast) (Forecast) (Nidec estimates based on various sources) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 1 5

6 HDD Market Mid-term Trend Shipping volume (Millions of Units) PC External Consumer Electronics Near Line Drive Enterprise HDD shipment (LHS) HDD capacity (RHS) Capacity (Exabyte: 1 18 Byte) '13 '14 '15 '16 '17 '18 '19 '2 (CY) Industry sales HDD unit price (Billions of US dollars) HDD unit price (RHS) (USD) Sales of HDD industry (LHS) Continuous increase in HDD capacity Shipments on downward trend '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 HDD unit price (in USD terms) on uptrend HDD industry sales remaining flat Quarterly Results of Automotive, Appliance, Commercial and Industrial Products Key Growth Areas Appliance, Commercial and Industrial Products Automotive Sales 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY12 FY13 FY14 FY15 FY16 Key Growth Areas U.S. GAAP Appliance, Commercial, Industrial Products Automotive Operating Profit 1Q Sales: billion yen Key Growth Areas on a stable growth trajectory 1Q operating profit: 13.8 billion yen (operating profit ratio: 1%) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q -15 FY12 FY13 FY14 FY15 FY16 U.S. GAAP 12 6

7 EPS* Motor Global Market Share Growth Eyeing steady market expansion and significant share growth EPS* motor <Expected growth of EPS motor market and Nidec s share> Global market share: 23% Global market share: over 5% mil. units Global market share: 19% Competitor A Other competitors Other competitors mil. units Competitor B Competitors 22 7 mil. units (Estimate) Competitor C Competitor B *EPS: Electric Power Steering Competitor C Competitor A (Nidec estimates based on various sources) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 13 Powertrain Electrification DCT* motor market expected to enter expansion phase in FY217 (Thousands of units) 8, 3.5 times 6, 4, 2, Dual clutch transmission motor Nidec s advanced technologies for downsizing and higher power output attracting a broad range of customers. FY15 FY16 FY17 FY18 FY19 FY2 (Forecast) *DCT: Dual Clutch Transmission (Nidec estimates based on various sources) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 14 7

8 White Goods Delivering New Levels of Energy Efficiency Brushless DC motor for belt drive mechanism Brushless DC motors penetrating European and North American wet appliance markets Brushless DC motor for direct drive mechanism Fan for drying <Unit shipment of motors for wet appliances> (For major appliance manufacturers in N.A. and Europe) DC AC Approx. 17 million Over 3 million 5% 5% Drying machine Washing machine (top-loading) Washing machine (front-loading) Dish washer This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. FY13 FY15 FY17 (Nidec estimates based on various sources) FY2 15 Industrial Robot New Market Exploration Nidec Shimpo s rapid flow of new products opening up new market opportunities <Sales forecast for four robotics product series> 1) 2) 3) 4) Traction Over 1 billion yen Traction New product: Flat reducer New product: High-precision AC servo actuator Space conscious applications: Power assist suit Electric wheel chair Main applications: Home telepresence Robot cleaner Small robot A few hundreds of million yen FY215 FY216 FY217 (Forecast) This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 16 8

9 Completion of Two M&As Company name Headquarters Foundation 1974 Principal businesses E.C.E. S.r.l. (Italy) E.C.E. S.r.l. Mezzani, Parma (Italy) Designing, manufacturing and sales of hoists for building constructions Company name Headquarters Foundation 1967 Principal businesses ANA IMEP S.A. (Romania) Nidec Motor Corporation Romania Pitesti (Romania) Developing, manufacturing and sales of motors for washing and drying machines Sales 5.1 million (Year ended Dec. 31, 215) Sales 14.8 million (Year ended Dec. 31, 215) *Full ownership acquired on May 2, 216 *94.8% ownership acquired on May 31, 216 ANA IMEP to serve as Nidec s largest low-cost production base 17 Nidec IR Contacts Japan Tel: ir@nidec.com U.K. Tel: iwai.yuji@nidec.com U.S. Tel: nagase.kiyoshi@nidec.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. 18 9

10 Appendix Performance Trends & Product Group Overview 19 Sales by Product Group (Apr-Jun FY216) (-based) Electronic & Optical Components Camera shutters, switches, trimmer potentiometers, processing, precision ii plastic mold products Machinery Others 9.8% (9.5%) 5.5% (5.6%).3% (.3%) Parenthetic percentages represent FY215 mix Services, music box products HDD Motors 15.5% (17.5%) Small Precision Motors 34.3% (36.5%) Industrial robots, circuit board testers, high-speed pressing machines, chip mounters, measuring equipment, power transmission equipment, factory automation system, card readers Automotive, Appliance, Commercial and Industrial Products 5.1% (48.2%) Appliance Commercial Industrial 26.9% (25.%) B Auto 23.2% (23.2%) 18.8% (19.%) Other Small Motors Optical disk drive motors, OA equipment motors, polygon scanners motors, MPU cooling fans, game machine fans, PC/communications equipment fans, home appliance fans, automobile fans, vibration motors, brushed motors, stepping motors, actuator units 2 1

11 Financial Highlights* <Consolidated Sales & Operating Profit> Sales Operating Profit Operating Profit Ratio (%) <Consolidated Profit Before Tax & Profit> Profit Before Tax Profit attributable to owners of the parent % % % % % Q/FY15 2Q 3Q 4Q 1Q/FY16 <Dividends and EPS> (Yen/share) Year-end Interim Consolidated EPS (Full-year) Q/FY15 2Q 3Q 4Q 1Q/FY16 <Consolidated Cash Flow> Operating Activities Investment Activities Free Cash Flow FY15 FY16 1Q/FY15 1Q/FY16 *All figures are prepared under. This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 21 Product Group Overview* <Small Precision Motors> Sales Operating Profit <Automotive, Appliance, Commercial & Industrial products> Sales Operating Profit Q/FY15 2Q 3Q 4Q 1Q/FY16 Sales <Machinery > Operating Profit 1Q/FY15 2Q 3Q 4Q 1Q/FY16 <Electronic and Optical Components> Sales Operating Profit Q/FY15 2Q 3Q 4Q 1Q/FY16 1Q/FY15 2Q 3Q 4Q 1Q/FY16 *All figures are prepared under

12 Appendix Mid-Term Strategic Goal Vision22 This section includes forward-looking statements. See disclaimer on page 2 of this presentation. 23 Vision22: Mid-Term Strategic Goal* Continuous pursuit of profit & strong growth 1. Target for consolidated net sales: 2 trillion yen (including sales attributable to new M&A of approx. 5 billion yen) 2. Sales target for automotive: 7 billion to 1 trillion yen 3. Target for consolidated operating profit ratio: 15% 4. Target for ROE: 18% (Assuming shareholders equity ratio of 6%) 5. Five regional HQ management *All figures are prepared under. This slide includes forward-looking statements. See disclaimer on page 2 of this presentation

13 Vision 22: Targets for Net Sales and Operating Profit Ratio Aiming for both sales growth (organic + M&A) and profitability enhancement (Net Sales in Trillions of Yen) % 13.7% 1.7% 9.7% 1.8% Net Sales Net Sales 1.3T 79.3B Net Sales Net Sales 875.1B Net Sales 676.B NtSl Net Sales 682.3B 571.6B 1.% Net Sales 1.18T 1.4% Net Sales 1.25T 15% Net Sales 2T 1 5 (Operating Profit Ratio, %) New M&A approx.5 B 2.5% FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY2 (Forecast) U.S. GAAP This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 25 Vision 22: Pursuing Both Strong Growth with Profit and Financial Soundness Targeting operating profit ratio of 15% and ROE of 18% while sustaining and improving financial soundness Shareholders Equity (LHS) ROE (RHS) (%) Shareholders Equity Ratio (RHS) Operating Profit Ratio (RHS) 1,5 65% 6% 55.4% 6% 54.9% 1,2 55% 49.1% 47.5% 46.2% 5% 44.4% 42.3% % 45% Shareholders Equity Ratio The three elements for ROE improvement Net profit on sales Total asset turnover Financial leverage 6 ROE 3 Operating Profit Ratio 18% 16.3% 2% 15.% % % 1% 12.% 11.9% 9.2% 13.9% 13.7% 15% % 1.8% 2.5% 9.7% 8.9% 1.% % FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY2 15% 1% 5% % U.S. GAAP This slide includes forward-looking statements. See disclaimer on page 2 of this presentation

14 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. Appliance, commercial and to Small precision motors Automotive Other product groups industrial products 1T New M&A to to Key Growth Areas Key Growth Areas Key Growth Areas 2. to 3. U.S. GAAP This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 27 Organic Growth Outlook of Automotive, Appliance, Commercial and Industrial Products (Sales in Billions of Yen) (Operating Profit Ratio, %) 1, Appliance, Commercial and Industrial Products (LHS) 16% Automotive (LHS) Operating Profit Ratio (RHS) 5 8% One trillion Yen sales expected from organic growth alone in Key Growth Areas FY14 FY15 FY16 FY17 FY18 FY19 FY2 (Forecast) U.S. GAAP % This slide includes forward-looking statements. See disclaimer on page 2 of this presentation

15 Organic Growth Outlook of Automotive (Operating Profit in (Sales in Billions of Yen) Billions of Yen) 1, New M&A (LHS) Operating Profit (RHS) 12 Other automotive components (LHS) ECU & Sensor (LHS) Motor (LHS) Organic sales of over 5 billion yen 5 for FY2 6 in sight Automotive business expanding at a faster pace than originally expected FY14 FY15 FY16 FY17 FY18 FY19 FY2 (Forecast) U.S. GAAP This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 29 Organic Growth Outlook of Appliance, Commercial and Industrial (Sales in Billions (Operating Profit in Appliance (LHS) Commercial (LHS) of Yen) Billions of Yen) 6 Industrial (LHS) Operating Profit (RHS) Organic sales of over 4 billion yen for FY2 in sight 8 4 ACI* growing steadily in line with original expectations *ACI: Appliance, commercial and industrial FY14 FY15 FY16 FY17 FY18 FY19 FY2 (Forecast) U.S. GAAP This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 3 15