Nidec Corporation. Fiscal First-Half 2018 Financial Results

Transcription

1 Nidec Corporation Fiscal First-Half 218 Financial Results Six Months Ended September 3, 218 <IFRS> TSE: 6594 OTC US: NJDCY October 24, 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 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 first slide features a right-angle precision gearbox manufactured by MS Graessner GmbH & Co. KG. For details, please see Page 23. 2

2 Consolidated Profit/Loss Millions of Yen, except for EPS, dividends and FX rates 1H/FY217 1H/FY218 Change FY218 Forecast Net sales 715,89 777, % 1,6, Operating profit 81,765 98, % 195, Operating profit ratio 11.4% 12.6% % Profit before income taxes 75,783 98, % 187,5 Profit attributable to owners of the parent 59,421 78, % 147, EPS (Yen) % Dividends (Yen) FX rate (Yen/US$) Average: Term end: % +.7% 1. (Assumed for 3Q onward) Note: Based on the current forecast of sales volume, every one appreciation or depreciation against the U.S. dollar and the euro for FY218 is estimated to have an annualized impact of 9. billion and 1.7 billion on net sales, respectively, and 1.1 billion and.4 billion on operating profit, respectively. This slide includes forward-looking statements. See Disclaimer on Page 2. 3 Summary of 1H/FY218 Record-high first-half net sales, operating profit, profit before income taxes and profit attributable to owners of the parent Record-high quarterly net sales, operating profit, profit before income taxes and profit attributable to owners of the parent Year-end dividend projection raised 4

3 Year-on-Year Changes (Six Months Ended September 3, 218) <Net Sales> H/FY17 <Operating Profit> Exchange Rate Small Precision Motors Automotive +9.3 Appliance, Commercial and Industrial +3.6 Machinery -1.4 Electronic and Optical Components and Others +.1 1H/FY18 (*) H/FY17 Exchange Rate Small Precision Motors Automotive Appliance, Commercial and Industrial Machinery Electronic and Optical Components and Others Eliminations/ Corporate 1H/FY18 *Please refer to Notes on Page Quarter-on-Quarter Changes (Three Months Ended September 3, 218) <Net Sales> Q1/FY18 <Operating Profit> Exchange rate +1.1 Small Precision Motors Automotive -.2 Appliance, Commercial and Industrial -.5 Machinery +.2 Electronic and Optical Components and Others +. Q2/FY18 (*) Q1/FY18 Exchange rate Small Precision Motors Automotive Appliance, Commercial and Industrial Machinery Electronic and Optical Components and Others Eliminations/ Corporate Q2/FY18 *Please refer to Notes on Page 26. 6

4 Consolidated Quarterly Net Sales and Operating Profit Highest-ever three-month net sales and operating profit (Net Sales in Billions of Yen) 6 Net Sales (LHS) Operating Profit (RHS) (Operating Profit in Billions of Yen) 6 Q2 Operating profit: 51.6 billion All time quarterly high Q2 Net sales: billion All time quarterly high Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY213 FY214 FY215 FY216 FY217 FY218 7 Cash Flow 2 Operating CF Investment CF Free CF Ceaseless CCC* improvement creating strong cash flow that underpins the mid-term growth strategy H/216 2H/216 1H/217 2H/217 1H/218 *CCC: Cash Conversion Cycle 8

5 CAPEX, Depreciation, R&D 2 CAPEX Depreciation R&D (Full-Year Forecast) 57.2 (1H Actual) (Full-Year Forecast) 33.9 (1H Actual) (Full-Year Forecast) 28.9 (1H Actual) Continuing aggressive investments that support mid-term growth 17 FY17 年度 18 FY18 年度 17 FY17 年度 2 18 FY18 年度 2 17 FY17 年度 3 18 FY18 年度 3 This slide includes forward-looking statements. See Disclaimer on Page 2. *Please refer to Notes on Page Mid-Term Strategic Goal Vision22 This section includes forward-looking statements. See Disclaimer on Page 2. 1

6 Vision22: Mid-Term Strategic Goal Continuous pursuit of profit & strong growth 1. Target for consolidated net sales: 2 trillion (including sales attributable to new M&A of approx. 5 billion ) 2. Sales target for automotive: 7 billion to 1 trillion 3. Target for consolidated operating profit ratio: 15% 4. Target for ROE: 18% (Assuming shareholders equity ratio of 6%) 5. Five regional HQ management units This slide includes forward-looking statements. See Disclaimer on Page Small Precision Motors: HDD Market Mid-Term Trend (Millions of Units) PC External Consumer Electronics Data Center Enterprise (Nearline Drive) '13 '14 '15 '16 '17 '18 '19 '2 Nidec s estimates based on various sources. (CY) Server Application Revised from previous estimate (Millions of Units) <Previous> <Revised> (April 25, 218) CY CY CY This slide includes forward-looking statements. See Disclaimer on Page 2. 12

7 HDD Market Short-Term Trend HDD Shipments Nidec Motor Shipments Previous FY218 Forecast (July 25, 218) (Millions of Units) Revised FY218 Forecast (October 24, 218) HDD shipment forecast revised downward slightly (Millions of Units) FY218 Annual forecast Previous forecast Revised forecast HDD shipments Nidec motor shipments Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (Actual) (Forecast) (Forecast) (Forecast) (Actual) (Actual) (Forecast) (Forecast) Nidec s estimates based on various sources. This slide includes forward-looking statements. See Disclaimer on Page Small Precision Motors: Growth in Nearline Drive Demand Significant growth in the nearline drive market accompanied by steady increase in Nidec s market share and its ASP* (Millions of Units) 2 <Growth in nearline drive market and increase in Nidec s motor shipments and ASP*> (US$) Growth in nearline drive market driven by high demand from newly emerging cloud service providers Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1. FY15 FY16 FY17 FY18 Nearline drive market (LHS) Nidec's nearline motors (LHS) ASP* of Nidec's nearline motors (RHS) *ASP: Average Selling Price 14

8 Small Precision Motors: Other Small Motors The steady progress of the IoT and ICT trends driving further development of big data and increasing cooling fan demands <Shipment volume of fan motors> (Millions of Units) (Nidec parent alone) 5 45 Significantly increasing trend <Market needs> IoT & ICT (5G) Higher demand for cooling fans 4 35 Large data capacity (Big Data) 3 25 Intelligence (CPU installed) 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 15 TOB: Commencement of Tender Offer for Shares of CCI, Taiwan <Outline of the Tender Offer> Tender offeror Nidec Corporation Target company Chaun-Choung Technology Corp. ( CCI ) Tender offer period October 3, 218 through November 21, 218 Class of shares for tender offer Tender offer price Tender offer funds Providing modules for customers requiring thermal management in addition to cooling fans Common stock TWD 18 per share Approximately TWD 4,476 million (The amount required to make payment related to the purchase of 48.% of CCI s outstanding shares) <Summary of CCI> Company name Headquarters Name and title of representative Description of business Chaun-Choung Technology Corp. 12F, No.123-1, Xingde Road, Sanchung, New Taipei City 241, Taiwan, (R.O.C.) Chairman, Wu Shih Ling Capital TWD 863,433,96 Development, manufacturing, and sales of thermal module products Minimum number of shares to be purchased Maximum number of shares to be purchased Terms of tender offer If 28,838,695 shares of CCI (which are equivalent to 33.4% of the shares outstanding) are to be sold, the Company will execute the tender offer. 41,444,831 shares (48.% of the shares outstanding) The tender offer closing will condition on fulfilling 28,838,695 shares (which are equivalent to 33.4% of the shares outstanding) subscription, obtaining clearance and will be carried out on the premise that the tender offer meets various conditions normally required for similar transactions. Date of establishment December 14, 1973 Number of employees 2,265 (As of March 1, 218) <Main > Others Nidec reached an agreement with 37 shareholders of CCI that all of them subscribe the tender offer. The number of shares to be subscribed will be 28,838,695 shares (which are equivalent to 33.4% of the shares outstanding). If this agreement is executed, it will be possible to acquire shares meeting the floor of 28,838,695 shares of the tender offer, and condition of the tender offer is fulfilled. Heat sink Thermal module products 16

9 Consolidated Quarterly Net Sales and Operating Profit (Automotive and Appliance, Commercial and Industrial ) Record-high quarterly operating profit for both Automotive and Appliance, Commercial and Industrial (Net Sales in Billions of Yen) Automotive 8 6 Net Sales (LHS) Operating Profit (RHS) 14 Q2 Operating profit: 12. billion (Operating profit ratio: 16.%) All time quarterly high 1 (Operating Profit in Billions of Yen) (Net Sales in Billions of Yen) Appliance, Commercial and Industrial 4 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY216 FY217 FY Net Sales (LHS) Operating Profit (RHS) Q2 Operating profit: 14.2 billion 5 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY216 FY217 FY (Operating profit ratio: 1.6%) All time quarterly high 1 (Operating Profit in Billions of Yen) 17 Automotive, Appliance, Commercial and Industrial: Capturing Business Opportunities Under Trade Tensions Expanding and accelerating productions in Mexico to win a stronger supplier position to major OEMs in the US Automotive Expanding production for Tier1s in the US and Mexico (Doubling output of EPS* motors from June 218) Nidec Automotive Motor Mexcicana S de RL de C.V. Appliance, Commercial and Industrial Expanding production for major air conditioner OEMs in the US (Some competitors are having difficulties due to tariff issues) Nidec Motor Corporation (Mexico) *EPS: Electric Power Steering 18

10 Automotive: Diversifying Product Line-Ups <Sales outlook for Automotive > The ratio of powertrain systems including EV/PHEV traction motors expected to increase steadily going forward 6. billion (Target) Seat cooling fan Sunroof motor Seat adjustment motor Engine cooling fan motor Head-up display mechanism Plastic parts 47% billion Oil pump Water pump 42% E-Axle Traction motor Control valve Electric oil pump Transmission actuator EPS ECU Brake motor FY17 FY2 Chassis Powertrain Body Others This slide includes forward-looking statements. See Disclaimer on Page 2. Electric power steering motor ADAS Sensing camera Millimeter wave radar 19 Automotive: Sales Growth of Traction Motors Surging inquiries for both E-Axles and traction motors from players in emerging countries, Europe and Japan 5, 5 <Sales target of traction motors> (As of October 25, 217) 5 Sales target <Sales target of traction motors> (As of October 24, 218) 4, 4 4 Simple aggregate amount of inquiries 3, 3 2, 2 1, billion (Target) 2. billion (Target) FY17 FY18 FY19 FY2 FY21 FY22 FY23 FY24 FY25 FY19 FY2 FY21 FY22 FY23 FY24 FY25 (These sales targets do not include those of Nidec PSA emotors, the joint venture with Groupe PSA.) This slide includes forward-looking statements. See Disclaimer on Page 2. 2

11 Appliance, Commercial and Industrial: Plan for Increasing Production of Air-Conditioner Brushless DC Motors Expanding capacity in Hanoi from March 219 to prepare for additional demands from emerging markets Nidec Techno Motor (Phase 1) Nidec Hoa Lac Hi-tech Park (conceptual drawing), total area: 5 ha Nidec Techno Motor (Phase 1) under construction at a fast pace October November December January February March Nidec Techno Motor Process for Hanoi factory launch Construction Communication with customers Tooling up Production preparation Completion of construction of the phase 1 building Production and submission of samples Launch of test production line Approvals from customers and factory audit Equipment installation for mass production and production launch Employment of operators March 219 Mass production launch (tentative) 21 Appliance, Commercial and Industrial: Global Market Size of Main Home Appliances Evolving from motor-alone into module-based businesses using M&A M&A in home appliance market 1998 Nidec Techno Motor (Expected) Nidec Sole Motor Corporation S.R.L. Nidec Motor Corporation Nidec Motor Corporation Romania Nidec Global Appliance Compressors GmbH (Secop) Embraco (compressor business of Whirlpool Corporation) Motor-alone market: 5 billion Module market: 4 trillion Final product market: 35 trillion Target markets Fan motor Compressor motor Drive motor 24 billion 1 billion 16 billion Fan blade, compressor, fan motor, control, heat exchanger, etc. Compressor, compressor motor, control Gear unit, drive motor, control 2 trillion 1.5 trillion.5 trillion Air conditioner Freezer refrigerator Washer Unit: 13 million globally Fan DC ratio : 25% Inverter ratio: 45% Unit: 17 million globally Inverter ratio: 15% Unit: 11 million globally Motor DC ratio: 15% 14 trillion 13 trillion 8 trillion 22

12 M&A: MS-Graessner GmbH & Co. KG Full-scale entry into European market and enhancing product line-ups <Outline of Graessner> <Main > Company name MS-Graessner GmbH & Co. KG and its group companies Headquarters Dettenhausen, Baden-Württemberg Germany Foundation 1955 Directors Michael Stadler: CEO, Managing Director Thomas Merk: COO, Commercial Director Principal places of Business Germany, Austria Principal business Manufacture and sale of gearboxes Employees Approximately 166 (as of January 31, 218) Financials Revenue: 21.8 million Operating profit: 2.1 million Net assets: 15.1 million Total assets: 26.2 million (fiscal year ended December 31, 217) PowerGear Series Right-angle bevel gearbox High torque and small sized gearbox For applications of high input speed DynaGear Series High reduction gear ratio and high precision (low backlash) achieved by using hypoid gear For applications of high input speed DesignGear Customized gearbox which meets customer s requirement Serve customers who desire to achieve higher efficiency and smaller size 23 CSR Vision 22 E (Environment) Women s leadership: first manufacturer in Kyoto receiving highest level Eruboshi certifications Priority issues Target KPI Environmental load reduction Environmental contribution through products Environmental conservation Consistent reduction in energy consumptions and environmental emissions attributable to operations Quantitative assessment of productspecific environmental performance Active participation in local environmental conservation efforts 5% reduction (intensity) from FY215 benchmark Overall framework in place for measuring total CO 2 emissions reduced per year Specific action program in place at each business unit S (Society) G (Governance) Diversity Globally competent talents Corporate ethics Internal control Risk management A diverse workforce and leadership Training programs in place on a groupwide basis Code of Conduct aligned with internationally accepted standards Consistent management soundness and transparency Highly viable risk management procedures implemented on a global basis Specific action program in place at each business unit (Percentages of women in managerial positions: 8% for Nidec Corporation in Japan) Number of program participants or workshops held EICC*-based CSR management system covering 8% of operations worldwide Strict compliance with internationally accepted corporate governance guidelines Global risk management system adopted by all operations <Highest-level Eruboshi certification> Eruboshi certification is granted by the Minister of Health, Labour and Welfare based on the following five criteria: 1) Employment 2) Employment continuity 3) Workstyle including worktime 4) Percentage of women s management positions 5) Diverse career paths *EICC: Electronics Industry Code of Conduct 24

13 Strengthening News Distribution Remarkable increase in the number of shareholders in recent years. Strengthening news distribution eyeing 1, shareholders. <Number of shareholders> 62,187 shareholders as of September 3, 218 <My News Desk> 46,369 5,897 55,28 59,568 62,947 27,912 39,87 34,744 48,124 22,776 (Shareholder numbers at the end of each financial year) FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY Nidec IR Contacts Japan Tel: U.K. Tel: U.S. Tel: *Note: NIDEC adopts the provisions of IFRS 3 Business Combinations. During the three months ended June 3, 218, Nidec Corporation completed its valuation of the assets acquired and the liabilities assumed upon the acquisition of the following companies in the previous fiscal year; Secop Holding GmbH (currently Nidec Global Appliance Compressors GmbH), Secop s.r.o. (currently Nidec Global Appliance Slovakia s.r.o.), Secop Compressors (Tianjin) Co., Ltd. (currently Nidec Compressors (Tianjin) Co., Ltd.), Secop Inc. (currently Nidec Global Appliance USA Inc.) and LGB Elettropompe S.r.l. In addition, during the three months ended September 3, 218, Nidec Corporation completed its valuation of the assets acquired and the liabilities assumed upon acquisition of SV Probe Pte. Ltd. in the previous fiscal year. As a result, Nidec Corporation s consolidated financial statements for the year ended March 31, 218 reflects the revision of the initially allocated amounts of acquisition price. Of the assets acquired and the liabilities assumed upon the acquisitions of companies in the year ended March 31, 218 and in the six months ended September 3, 218, the assets and liabilities which are currently under evaluation have been recorded on Nidec Corporation s consolidated statement of financial position based on provisional management estimation as of September 3, 218. 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. 26

14 Appendix Performance Trends & Product Group Overview 27 Three 6 Billion Yen Businesses Are Key to Achieving 2 Trillion Yen Net Sales FY21 Net sales: 676 billion FY217 Net sales: trillion FY22 Net sales: 2 trillion (target) (Sales: Billions of Yen) Small Precision Motors Automotive Appliance, Commercial and Industrial Other Product Groups 1 T New M&A <Organic growth> (Target) 6. <Organic growth> (Target) 6. <Organic growth> (Target) Key Growth Areas Key Growth Areas Key Growth Areas 2. <Organic growth> (Target) This slide includes forward-looking statements. See Disclaimer on Page 2. 28

15 Sales by Product Group (Apr-Sep FY218) Services, music box products.3% (.3%) Others Parenthetic percentages represent FY217 mix Electronic & Optical Components Camera shutters, switches, trimmer potentiometers, processing, precision plastic mold products Machinery Industrial robots, circuit board testers, high-speed pressing machines, chip mounters, measuring equipment, power transmission equipment, factory automation system, card readers Appliance, Commercial and Industrial 11.% (9.5%) 35.% (34.9%) 4.8% (4.9%) 777.6B HDD Motors 12.9% (13.1%) 16.6% (17.7%) 19.5% (19.6%) Small Precision Motors 29.4% (3.8%) 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 Automotive 29 Financial Highlights *Please refer to Notes on Page 26. <Consolidated Net Sales and Operating Profit> Net sales Operating profit Operating profit ratio (%) % 11.5% 11.4% % 12.1% % <Profit Before Income Taxes and Profit Attributable to Owners of the Parent> Profit before income taxes Profit attributable to owners of the parent Q1/FY17 Q2 Q3 Q4 Q1/FY18 Q2 <Dividends and EPS> (Yen/share) Year-end Interim Consolidated EPS 499 (Forecast) (Forecast) 45. Q1/FY17 Q2 Q3 Q4 Q1/FY18 Q2 <Consolidated Cash Flow> Operating activities Investment activities Free cash flow FY16 FY17 FY18 Q1/FY18 Q2/FY18 3

16 Product Group Overview *Please refer to Notes on Page 26. <Small Precision Motors> Sales Operating profit <Automotive > Sales Operating profit Q1/FY17 Q2 Q3 Q4 Q1/FY18 Q2 < Appliance, Commercial and Industrial > Sales Operating profit Q1/FY17 Q2 Q3 Q4 Q1/FY18 Q2 <Machinery> Sales 6.9 Operating profit Q1/FY17 Q2 Q3 Q4 Q1/FY18 Q2 Q1/FY17 Q2 Q3 Q4 Q1/FY18 Q2 31 Vision22: 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 1,5 1,2 9 Shareholders equity ratio 42.3% Shareholders equity (LHS) Shareholders equity ratio (RHS) ROE (RHS) Operating profit ratio (RHS) 49.1% 47.5% 46.2% 41.3% 44.4% 54.9% 55.4% % % % 1,2. (%) 65% 6% 55% 5% 45% The three elements for ROE improvement Net profit on sales Total asset turnover Financial leverage 6 3 Operating profit ratio ROE 9.2% 8.9% This slide includes forward-looking statements. See Disclaimer on Page % 16.3% % % 12.1% 12.% 11.9% 13.8% 14.7% 13.9% 13.7% 15.% % 2.5% 9.7% 1.8% 1.% 11.6% 11.2% % FY8 FY9 FY1 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY2 (Target) US GAAP IFRS 2% 15% 1% 5% % *Please refer to Notes on Page