[Translation] Quarterly Report. (The Second Quarter of 44th Business Term) From July 1, 2016 to September 30, 2016 NIDEC CORPORATION

Transcription

1 [Translation] Quarterly Report (The Second Quarter of 44th Business Term) From July 1, 2016 to September 30, 2016 NIDEC CORPORATION

2 CONTENTS Cover... 1 Part I Information on the Company... 2 I. Overview of the Company Key Financial Data Description of Business... 3 II. Business Overview Risk Factors Material Agreements, etc Analysis of Consolidated Financial Position, Operating Results and Cash Flows... 4 III. Information on the Company Information on the Company s Stock, etc (1) Total number of shares, etc (2) Information on the stock acquisition rights, etc (3) Information on moving strike convertible bonds, etc (4) Information on shareholder right plans... 8 (5) Changes in the total number of issued shares and the amount of common stock and other... 8 (6) Major shareholders... 9 (7) Information on voting rights Changes in Directors and Senior Management IV. Financial Information Condensed Quarterly Consolidated Financial Statements Other Part II Information on Guarantors, etc. for the Company [Condensed Quarterly Consolidated Financial Statements]... F1

3 [Cover] [Document Filed] Quarterly Report ( Shihanki Hokokusho ) [Applicable Law] Article , Paragraph 1 of the Financial Instruments and Exchange Act of Japan [Filed with] Director, Kanto Local Finance Bureau [Filing Date] November 11, 2016 [Fiscal Year] The Second Quarter of 44th Business Term (from July 1, 2016 to September 30, 2016) [Company Name] Nihon Densan Kabushiki Kaisha [Company Name in English] NIDEC CORPORATION [Title and Name of Representative] Shigenobu Nagamori, Chairman of the Board, President, Chief Executive Officer and Representative Director [Address of Head Office] 338 Kuzetonoshiro-cho, Minami-ku, Kyoto [Phone No.] [Contact Person] Tomohiko Hatori, General Manager, Accounting Department [Contact Address] 338 Kuzetonoshiro-cho, Minami-ku, Kyoto [Phone No.] [Contact Person] Tomohiko Hatori, General Manager, Accounting Department [Place Where Available for Public Tokyo Stock Exchange, Inc. Inspection] (2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo) This is an English translation of the Quarterly Report filed with the Director of the Kanto Local Finance Bureau via Electronic Disclosure for Investors NETwork ( EDINET ) pursuant to the Financial Instruments and Exchange Act of Japan. Unless the context indicates otherwise, the term Company refers to Nidec Corporation and the term NIDEC refers to the Company and its consolidated subsidiaries. References in this document to the Financial Instruments and Exchange Act are to the Financial Instruments and Exchange Act of Japan and other laws and regulations amending and/or supplementing the Financial Instruments and Exchange Act of Japan. 1

4 Part I Information on the Company I. Overview of the Company 1. Key Financial Data Consolidated financial data, etc. (Yen in millions, unless otherwise stated) Six months ended September 30, 2015 Six months ended September 30, 2016 Year ended March 31, 2016 Net Sales 587, ,030 1,178,290 [302,311] [287,824] Profit before income taxes 62,147 66, ,164 Profit attributable to owners of the parent Comprehensive income attributable to owners of the parent Total equity attributable to owners of the parent 46,857 50,110 89,945 [23,606] [28,069] 30,000 (25,711) 30, , , ,023 Total assets 1,414,171 1,326,859 1,376,636 Earnings per share attributable to owners of the parent- Basic (yen) [79.38] [94.64] Earnings per share attributable to owners of the parent-diluted (yen) Ratio of total equity attributable to owners of the parent to total assets (%) Net cash provided by operating activities 69,639 96, ,659 Net cash used in investing activities (59,269) (34,760) (95,377) Net cash provided by (used in) financing activities 13,474 (34,942) 7,775 Cash and cash equivalents at end of period 286, , ,942 (Notes) 1. The financial data above are based on the condensed quarterly consolidated financial statements and consolidated financial statements prepared in accordance with International Financial Reporting Standards ( IFRS ). 2. As the Company prepares its condensed quarterly consolidated financial statements, its non-consolidated financial data are not presented. 3. Figures shown in yen in millions are rounded to the nearest million. 4. Sales do not include consumption taxes. 5. During the three months ended September 30, 2016, NIDEC (Nidec Corporation and its consolidated subsidiaries) finalized the provisional accounting treatment for business combinations. As a result, figures as of six months ended September 30, 2015 and year ended March 31,

5 reflect the revision of the initially allocated amounts of acquisition price. Details are stated in 6.Business combinations of Notes to Condensed Quarterly Consolidated Financial Statements incorporated in this Quarterly Report. 6. The figures of Net sales, Profit attributable to owners of the parent and Earnings per share attributable to owners of the parent- Basic in square bracket are those for the three months ended September 30, 2015 and 2016, respectively. 2. Description of Business There were no significant changes in NIDEC s businesses during the six months ended September 30, Moreover, there were no changes in significant subsidiaries and associates. II. Business Overview 1. Risk Factors There were no new risk factors recognized during the six months ended September 30, There were no material changes in the risk factors stated in the Annual Securities Report for the 43rd business term pursuant to the Financial Instruments and Exchange Act of Japan. 2. Material Agreements, etc. The material agreement executed during the three months ended September 30, 2016 is as follows: Asset and stock purchase agreement Nidec Corporation agreed to acquire the motors, drives and electric power generation businesses (the Business ) of Emerson Electric Co. ( Emerson ), and entered into an asset and stock purchase agreement on August 2, 2016 (the Agreement ). 1. Purpose of the Agreement The Business develops, manufactures and sells motors, drives and alternators. The Agreement enables NIDEC to further enhance its appliance, commercial, and industrial motor businesses on which NIDEC provides particular focus and significantly grow its presence in the market. The Business has a strong brand and solid business foundation and an excellent customer base, particularly in Europe and North America. With the Agreement executed, NIDEC expects a complementary product fit with its full lineup of industrial products, geographic complementation of business foundation in Europe and North America, and enhancement of proposal to customers by combining the Business s drives with NIDEC s existing products. 2. Considerations for the Agreement Cash 3. Information on Emerson Company Name: Emerson Electric Co. Headquarters: 8000 West Florissant Avenue St. Louis, MO USA Businesses: Providing solutions as well as design, development, manufacturing, sales of a wide range of electrical and electronic machinery and equipment for industrial use and personal use in a variety of fields including network power, process management, industrial automation, climate technologies, appliance, and tools 4. Execution date of the asset and stock purchase agreement August 2, Date of the completion of the Business acquisition The Business acquisition is expected to be completed during the three months ending December 31, 2016; however, this schedule is subject to change based on approvals from antitrust authorities, and the exact timing of the completion of the share acquisition may differ in some regions. 3

6 3. Analysis of Consolidated Financial Position, Operating Results and Cash Flows NIDEC adopts IFRS for its consolidated financial statements from the first quarter of the fiscal year ending March 31, Accordingly, the consolidated financial statements for the six months ended September 30, 2015 and those for the fiscal year ended March 31, 2016 are also presented in accordance with IFRS. (1) Operating Results Despite the US economy s moderate expansion, the global economy remained uncertain during the six months ended September 30, 2016 because of the U.S. presidential election in November 2016 and concerns about a possible rise in the FRB interest rates. In the meantime, financial risks that started in Germany caused concerns in Europe, while China s economic slowdown caused by excessive investment continued while the Japanese domestic economy remained affected by the rapid appreciation of the Japanese yen, resulting in a lack of dynamism in the overall global economy. Under such a business environment, NIDEC continued to pursue our targets for the fiscal year ending March 31, 2021 of consolidated net sales of 2 trillion and an operating profit ratio of 15% based on our mid-term strategic goal, Vision 2020, and achieved the highest first half-year operating profit, profit before income taxes and profit for the period in our history. With regard to the results for the three months ended September 30, 2016, the operating profit ratio of our automotive, appliance, commercial and industrial products, the product category that serves as the driving force behind the transformation of our business portfolio, has been improving, and we achieved the highest quarterly operating profit, profit before income taxes and profit for the period in our history. 2016: The following table sets forth consolidated operating results for the six months ended September 30, Six months ended September 30, 2015 Six months ended September 30, 2016 Increase or decrease Increase or decrease ratio Net sales 587, ,030 (23,322) (4.0)% Operating profit 59,603 69,004 9, % Profit before income taxes 62,147 66,293 4, % Profit attributable to owners of the parent 46,857 50,110 3, % Consolidated net sales decreased 4.0% to 564,030 million for this six-month period compared to the same period of the prior year due to a rapid appreciation of the Japanese yen. On the other hand, operating profit increased 15.8% to 69,004 million for this six-month period compared to the same period of the prior year, achieving the highest first half-year operating profit in our history. Profit before income taxes increased 6.7% to 66,293 million for the six months ended September 30, 2016 compared to the same period of the prior year and profit attributable to owners of the parent increased 6.9% to 50,110 million for the six months ended September 30, 2016 compared to the same period of the prior year, respectively achieving the highest first half-year profit in our history. 4

7 The following table sets forth operating results by segment: For the six months ended September 30 Net sales Operating profit Increase or decrease Increase or decrease Nidec Corporation 104, , ,314 6,853 (461) Nidec Electronics (Thailand) 66,010 60,162 (5,848) 10,114 9,229 (885) Nidec Singapore 36,248 26,198 (10,050) (162) Nidec (H.K.) 47,718 65,018 17, , Nidec Sankyo 65,815 64,217 (1,598) 7,938 9,839 1,901 Nidec Copal 27,871 22,165 (5,706) 1,399 2,433 1,034 Nidec Techno Motor 32,188 32, ,924 4,327 1,403 Nidec Motor 110, ,751 1,094 7,148 10,536 3,388 Nidec Motors & Actuators 134, ,021 (8,830) 11,347 13,134 1,787 All Others 175, ,184 (15,080) 17,469 18, Adjustments (214,083) (209,604) 4,479 (7,036) (7,132) (96) Consolidated total 587, ,030 (23,322) 59,603 69,004 9,401 (Note) Net sales are the total of sales to external customers and sales to other operating segments. Net sales of Nidec Corporation increased 0.7% to 105,575 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to an increase in sales of other small precision motors, despite the negative effect of the appreciation of the Japanese yen against the U.S. dollar and a decrease in demand for hard disk drives spindle motors. However, operating profit of Nidec Corporation decreased 6.3% to 6,853 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to changes in the product mix, despite the increase in sales. Net sales of Nidec Electronics (Thailand) decreased 8.9% to 60,162 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to the negative effects of the appreciation of Japanese yen against the Thai baht and the U.S. dollar, despite an increase in the average selling price resulting from changes in the product mix. Operating profit of Nidec Electronics (Thailand) decreased 8.8% to 9,229 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to the decrease in sales. Net sales of Nidec Singapore decreased 27.7% to 26,198 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to a decrease in demand for hard disk drives spindle motors and the negative effect of the appreciation of the Japanese yen against the U.S. dollar. Operating profit of Nidec Singapore decreased 29.2% to 392 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to the decrease in sales. Net sales of Nidec (H.K.) increased 36.3% to 65,018 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to an increase in sales of other small precision motors, despite the negative effect of the appreciation of the Japanese yen against the Hong Kong dollar. Operating profit of Nidec (H.K.) increased 188.7% to 1,247 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to the increase in sales. Net sales of Nidec Sankyo decreased 2.4% to 64,217 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to the negative effect of the appreciation of the Japanese yen against the U.S. dollar, despite an increase in sales of LCD panel handling robots. However, operating profit of Nidec Sankyo increased 23.9% to 9,839 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to 5

8 changes in the product mix and cost reduction. Net sales of Nidec Copal decreased 20.5% to 22,165 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to a decrease in sales of other small precision motors and the negative effects of the appreciation of the Japanese yen against the Thai baht and other currencies. However, operating profit of Nidec Copal increased 73.9% to 2,433 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to cost reduction and changes in the product mix, despite the decrease in sales. Net sales of Nidec Techno Motor increased 0.5% to 32,343 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to an increase in demand for motors for air conditioning equipment in China, despite the negative effect of the appreciation of the Japanese yen against the Chinese yuan. Operating profit of Nidec Techno Motor increased 48.0% to 4,327 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to cost reduction, in addition to the increase in sales. Net sales of Nidec Motor increased 1.0% to 111,751 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to increases in sales through NIDEC s Three-new Strategy (new products, new markets and new clients), despite the negative effect of the appreciation of the Japanese yen against the U.S. dollar. Operating profit of Nidec Motor increased 47.4% to 10,536 million for six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to the increase in sales and changes in the product mix. Net sales of Nidec Motors & Actuators decreased 6.5% to 126,021 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to the negative effects of the appreciation of the Japanese yen against the U.S. dollar and the Euro, despite an increase in sales for automotive motors such as electric power steering motors and products of control valves at the Nidec Tosok Corporation. However, operating profit of Nidec Motors & Actuators increased 15.7% to 13,134 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase was primarily due to cost reduction and changes in the product mix. With respect to the All Others segment, net sales decreased 8.6% to 160,184 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to the negative effect of the appreciation of the Japanese yen against the U.S. dollar and a decrease in demand for other small precision motors. However, operating profit increased 3.9% to 18,146 million for the six months ended September 30, 2016 compared to the six months ended September 30, This decrease was primarily due to cost reduction. (2) Cash Flows (Cash Flows from Operating Activities) Net cash provided by operating activities increased 26,854 million to 96,493 million for the six months ended September 30, 2016 compared to the six months ended September 30, This increase in net cash provided by operating activities was mainly due to net positive impacts of 22,854 million of a change in accounts payable and 10,034 million of a change in inventories. For the six months ended September 30, 2016, NIDEC had 96,493 million of net cash inflows provided by operating activities primarily due to profit for the period of 50,516 million and an increase in accounts payable of 32,814 million. However, net cash provided by operating activities was negatively impacted by an increase in accounts receivable of 16,408 million. Accounts payable and accounts receivable increased as of September 30, 2016 compared to March 31, 2016 primarily due to an increase in sales except for the effect of exchange rate changes. For the six months ended September 30, 2015, NIDEC had 69,639 million of net cash inflows provided by operating activities primarily due to profit for the period of 47,419 million. However, net cash provided by operating activities was negatively impacted by an increase in accounts receivable of 13,367 million and an increase in inventories of 11,802 million. Accounts receivable and inventories increased as of September 30, 2015 compared to March 31, 2015 primarily due to an increase in sales. 6

9 (Cash Flows from Investing Activities) Net cash used in investing activities decreased 24,509 million to 34,760 million for the six months ended September 30, 2016 compared to the six months ended September 30, The decrease in net cash used in investing activities was mainly due to a decrease in additions to property, plant and equipment of 17,331 million and a decrease in acquisitions of business, net of cash acquired of 7,479 million. For the six months ended September 30, 2016, NIDEC had 34,760 million of net cash outflows in investing activities mainly due to additions to property, plant and equipment of 30,483 million. For the six months ended September 30, 2015, NIDEC had 59,269 million of net cash outflows in investing activities mainly due to additions to property, plant and equipment of 47,814 million. (Cash Flows from Financing Activities) Net cash used in financing activities was 34,942 million for the six months ended September 30, 2016, while net cash provided by financing activities was 13,474 million for the six months ended September 30, For the six months ended September 30, 2016, NIDEC had 34,942 million of net cash outflows from financing activities mainly due to a decrease in short term borrowings of 21,425 million and dividends paid to the owner of the parent of 11,864 million. For the six months ended September 30, 2015, NIDEC had 13,474 million of net cash inflows from financing activities mainly due to an increase in short term borrowings of 38,324 million partially offset by repayments of long term debt of 12,977 million and dividends paid to the owner of the parent of 11,764 million. As a result of the foregoing factors and the effect of exchange rate changes, NIDEC s total outstanding balance of cash and cash equivalents decreased 7,008 million from 305,942 million as of March 31, 2016 to 298,934 million as of September 30, NIDEC holds its cash and cash equivalents primarily in U.S. dollars, Chinese yuan, Thai baht, Japanese yen and Euros. (3) Issues to address on business and finance There were no material changes in the issues for NIDEC to address during the six months ended September 30, (4) Research and Development NIDEC s research and development expenses for the six months ended September 30, 2016 were 25,602 million. There were no significant changes in research and development activities for the period. 7

10 III. Information on the Company 1. Information on the Company s Stock, etc. (1) Total number of shares, etc. 1) Total Number of Shares Class Total number of shares authorized to be issued (shares) Common stock 960,000,000 Total 960,000,000 2) Issued Shares Class Common stock Number of shares issued as of the end of second quarter (shares) (September 30, 2016) Number of shares issued as of the filing date (shares) (November 11, 2016) 298,142, ,142,234 Stock exchange on which the Company is listed Tokyo Stock Exchange, Inc. (the first section) Description Total 298,142, ,142, This is our standard stock. There is no restriction on contents of the right of the stock. The number of shares per one unit of shares is 100 shares. (2) Information on the stock acquisition rights, etc. Not applicable. (3) Information on moving strike convertible bonds, etc. Not applicable. (4) Information on shareholder right plans Not applicable. (5) Changes in the total number of issued shares and the amount of common stock and other Date Change in Balance of Changes Balance of the total the total Changes in Balance of in capital capital number of number of common common reserve reserve issued issued stock (Yen stock (Yen in (Yen in (Yen in shares shares in millions) millions) millions) millions) (shares) (shares) From July 1, 2016 to September 30, ,142,234-87,784-92,005 8

11 (6) Major shareholders (As of September 30, 2016) Name Address Ownership Number of percentage to shares the total owned number of (thousands issued shares of shares) (%) Shigenobu Nagamori Nishikyo-ku, Kyoto 24, Japan Trustee Services Bank, Ltd. (trust account) 8-11, Harumi 1-chome, Chuo-ku, Tokyo 18, The Master Trust Bank of Japan, Ltd. (trust account) The Bank of Kyoto, Ltd. (Standing proxy: Trust & Custody Services Bank, Ltd.) S.N. Kosan, Ltd. JP MORGAN CHASE BANK (Standing proxy: Mizuho Bank, Ltd.) 11-3, Hamamatsucho 2-chome, Minato-ku, Tokyo 700, Yakushimae-cho, Karasuma-dori, Matsubara-Agaru, Shimogyo-ku, Kyoto (Harumi Island Triton Square Office Tower Z, 8-12, Harumi 1-chome, Chuo-ku, Tokyo) 518, Akinono-cho, Karasuma-dori, Nijyo-Sagaru, Nakagyo-ku, Kyoto 270 Park Avenue, New York, NY 10017, USA(Shinagawa Intercity Tower A, 15-1, Konan 2-chome, Minato-ku, Tokyo) 13, , , , The Bank of Tokyo-Mitsubishi UFJ, Ltd. State Street Bank and Trust Company (Standing proxy: The Hongkong and Shanghai Banking Corporation Limited, Tokyo branch) Nippon Life Insurance Company 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo One Lincoln Street, Boston, Massachusetts 02111, U.S.A. (11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo) 6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo 7, , , JPMC OPPENHEIMER JASDEC LENDING ACCOUNT (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.) 6803 S. Tucson Way Centennial, CO 80112,U.S.A. (7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo) 6, Total - 116, (Notes) 1. All shares owned by Japan Trustee Services Bank, Ltd. (trust account) and Master Trust Bank of Japan, Ltd. (trust account) are related to trust services. 2. A copy of an amendment report for a large shareholding report was sent to the Company from Mitsubishi UFJ Financial Group, Inc. dated April 7, However, the above table is based on the shareholders register since the Company does not confirm the actual status of shareholdings as of the end of September 30,

12 A summary of the report as of March 31, 2014 is as follows: Name The Bank of Tokyo-Mitsubishi UFJ, Ltd. Mitsubishi UFJ Trust and Banking Corporation Mitsubishi UFJ Asset Management Co., Ltd. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. Address 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo Number of shares held (shares) Shareholding ratio (%) 7,369, ,318, , , Total - 15,228, A copy of a large shareholding report was sent to the Company from Sumitomo Mitsui Trust Bank, Limited dated May 11, However, the above table is based on the shareholders register since the Company does not confirm the actual status of shareholdings as of the end of September 30, A summary of the report as of April 30, 2015 is as follows: Name Sumitomo Mitsui Trust Bank, Limited Address 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 7-1, Akasaka 9-chome, Number of shares held (shares) Shareholding ratio (%) 13,275, Nikko Asset Management Co., Ltd. Minato-ku, Tokyo 1,496, Sumitomo Mitsui Trust 33-1, Shiba 3-chome, Asset Management Co., Minato-ku, Tokyo 307, Ltd. Total - 15,079, (7) Information on voting rights 1) Issued shares Classification Number of shares (shares) (As of September 30, 2016) Number of voting Description rights Shares without voting right Shares with restricted voting rights (treasury stock, etc.) Shares with restricted voting rights (others) Shares with full voting right (treasury stock, etc.) Shares with full voting right (others) Common stock 1,542, Common stock 296,062,900 2,960,629 - Shares less than one unit Common stock 536, Number of issued shares 298,142, Total number of voting rights - 2,960,629 - (Notes) 1. The Shares with full voting right (others) column includes 35,500 shares registered in the name of Japan Securities Depository Center ( JASDEC ) and 355 voting rights for those shares. The Shares with full voting right (others) column includes 200 shares registered in the name of Nidec-Shimpo Corporation (shares of stocks that were not registered when the shares were exchanged with the Company on October 1, 2003) and two voting rights for those shares. Nidec-Shimpo Corporation does 10

13 not substantially own the 200 shares (two voting rights) registered in its name. 2. Common stock in the Shares less than one unit column includes 54 shares of the Company s treasury stock. 2) Treasury stock, etc. Name of shareholder Nidec Corporation Address 338 Kuzetonoshiro-cho, Minami-ku, Kyoto Number of shares held under own name (shares) (As of September 30, 2016) Number of Ownership shares held percentage Total under the to the total shares held name of number of (shares) others issued (shares) shares (%) 1,542,400-1,542, Total - 1,542,400-1,542, Changes in Directors and Senior Management Changes in the Members of the Board of Directors and the Members of the Audit & Supervisory Board of Nidec Corporation from the filing date of the Annual Securities Report for the 43rd business term pursuant to the Financial Instruments and Exchange Act of Japan to September 30, 2016 are as follows: 11

14 Changes in positions and responsibilities New position New responsibility Former position Former responsibility Name Effective date Executive Vice President Executive Vice President Adviser to President Adviser to President (Small Precision Motor & (Fluid Dynamic Bearing Solutions (SPMS) Motor (FDBM) and Business Unit (BU)); General Application Executive General Motor & Solutions Manager, SPMS Business (GAMS) Business Units); Unit; in charge of Executive General Member of the Board of Directors supervising BU-wide Business Planning; First Senior General Manager, Member of the Board of Directors Manager, GAMS Business Unit; and Member of the Board of Toshihiko Miyabe July 1, 2016 General Application Directors and Chairman, Motor & Solutions Nidec (Zhejiang) Business Group; and Corporation and Nidec Member of the Board of Philippines Corporation Directors and Chairman, Nidec (Zhejiang) Corporation and Nidec Philippines Corporation Vice Chairman Vice Chairman Chief Technology Officer, Chief Technology Officer, Adviser to President (New Adviser to President Business Development (Nidec Research and Unit, Nidec Research and Development Center, Development Center, Japan, Nidec Center for Japan, Nidec Center for Industrial Science, and Industrial Science, and Production Engineering Production Engineering Center); in charge of Center); Executive managing Intellectual General Manager, New Property Department, Business Development New Business Representative Unit; in charge of Representative Administration Director and Member of the Board of managing Intellectual Property Department; Member of the Board of Director and Member of the Board of Department, Strategic Technology and Business Planning Department, and Mikio Katayama July 11, 2016 Directors Directors and Chairman, Directors New Business Nidec India Private Development Department; Limited; and Member of the Board of Representative Director, Directors and Chairman, Member of the Board of Nidec India Private Directors and Chairman, Limited; and Nidec Techno Motor Representative Director, Corporation, Nidec Copal Member of the Board of Corporation, and Nidec Directors and Chairman, Seimitsu Corporation Nidec Techno Motor Corporation, Nidec Copal Corporation, and Nidec Seimitsu Corporation 12

15 IV. Financial Information 1. Condensed Quarterly Consolidated Financial Statements Refer to the condensed quarterly consolidated financial statements incorporated in this Quarterly Report. 2. Other On October 24, 2016, the Company s Board of Directors resolved to pay cash dividends to shareholders as of September 30, 2016 as follows: (1) Total amount of dividends... 11,864 million (2) Amount per share (3) Effective Date of Claim of Payment and Start Date of Payment... December 1, 2016 Part II Information on Guarantors, etc. for the Company Not applicable. 13

16 1. Condensed Quarterly Consolidated Financial Statements (1) Condensed Quarterly Consolidated Statements of Financial Position Assets Current assets Note The date of transition to IFRS (April 1, 2015) March 31, 2016 September 30, 2016 Cash and cash equivalents 269, , ,934 Trade and other receivables 255, , ,808 Other financial assets ,010 2,281 Income tax receivables 1,551 2,063 1,048 Inventories 170, , ,163 Other current assets 20,018 22,892 25,040 Total current assets 718, , ,274 Non-current assets Property, plant, and equipment 342, , ,000 Goodwill 7 162, , ,577 Intangible assets 7 83,931 77,049 67,885 Investments accounted for using the equity method 2,167 1,896 1,752 Other investments 11 21,507 15,998 16,345 Other financial assets 11 2,274 1,804 1,538 Deferred tax assets 10,749 11,545 10,200 Other non-current assets 5,646 4,278 4,288 Total non-current assets 631, , ,585 Total assets 1,349,872 1,376,636 1,326,859 F-1

17 Note The date of transition to IFRS (April 1, 2015) March 31, 2016 September 30, 2016 Liabilities Current liabilities Short term borrowings 11 52,401 81,092 53,614 Long term debt due within one year 11 45,432 82, ,950 Trade and other payables 204, , ,195 Other financial liabilities 11 2,941 3,192 1,877 Income tax payables 5,913 5,831 5,716 Provisions 18,583 18,886 19,276 Other current liabilities 31,151 40,891 39,648 Total current liabilities 360, , ,276 Non-current liabilities Long term debt , ,798 62,510 Other financial liabilities ,029 3,616 Retirement benefit liabilities 19,834 19,488 18,235 Provisions 2,904 3,337 3,209 Deferred tax liabilities 23,467 22,641 23,552 Other non-current liabilities 3,126 2,315 1,926 Total non-current liabilities 234, , ,048 Total liabilities 595, , ,324 Equity Common stock 77,071 87,784 87,784 Additional paid-in capital 107, , ,340 Retained earnings 562, , ,664 Other components of equity (1,072) (56,159) (132,230) Treasury stock (27) (12,111) (12,121) Total equity attributable to owners of the parent 746, , ,437 Non-controlling interests 8,256 8,346 8,098 Total equity 754, , ,535 Total liabilities and equity 1,349,872 1,376,636 1,326,859 F-2

18 (2) Condensed Quarterly Consolidated Statements of Income and Condensed Quarterly Consolidated Statements of Comprehensive Income For the six months ended September 30, 2015 and 2016 Condensed Quarterly Consolidated Statements of Income For the six months ended September 30 Note Net Sales 5 587, ,030 Cost of sales (453,364) (428,547) Gross profit 133, ,483 Selling, general and administrative expenses (48,964) (40,877) Research and development expenses (25,421) (25,602) Operating profit 5 59,603 69,004 Financial income 1,012 1,332 Financial expenses (895) (3,853) Foreign exchange differences 2,422 (173) Equity in net income (loss) of associates 5 (17) Profit before income taxes 62,147 66,293 Income tax expenses (14,728) (15,777) Profit for the period 47,419 50,516 Profit attributable to: Owners of the parent 46,857 50,110 Non-controlling interests Profit for the period 47,419 50,516 Earnings per share attributable to owners of the parent 10 Basic (yen) Diluted (yen) F-3

19 Condensed Quarterly Consolidated Statements of Comprehensive Income For the six months ended September 30 Note Profit for the period 47,419 50,516 Other comprehensive income, net of taxation Items that will not be reclassified to net profit or loss: Remeasurement of defined benefit plans (72) (110) Fair value movements on FVTOCI equity financial assets (1,836) 345 Items that may be reclassified to net profit or loss: Foreign currency translation adjustments (14,785) (76,858) Effective portion of net changes in fair value of cash flow hedges (641) 121 Fair value movements on FVTOCI debt financial assets (12) 1 Other comprehensive income for the period, net of taxation (17,346) (76,501) Comprehensive income for the period 30,073 (25,985) Comprehensive income attributable to: Owners of the parent 30,000 (25,711) Non-controlling interests 73 (274) Comprehensive income for the period 30,073 (25,985) F-4

20 For the three months ended September 30, 2015 and 2016 Condensed Quarterly Consolidated Statements of Income Note For the three months ended September Net Sales 5 302, ,824 Cost of sales (232,392) (216,297) Gross profit 69,919 71,527 Selling, general and administrative expenses (26,408) (21,121) Research and development expenses (13,767) (12,942) Operating profit 5 29,744 37,464 Financial income Financial expenses (505) (904) Foreign exchange differences 865 (21) Equity in net (loss) income of associates (0) 8 Profit before income taxes 30,556 37,190 Income tax expenses (6,788) (8,938) Profit for the period 23,768 28,252 Profit attributable to: Owners of the parent 23,606 28,069 Non-controlling interests Profit for the period 23,768 28,252 Earnings per share attributable to owners of the parent 10 Basic (yen) Diluted (yen) F-5

21 Condensed Quarterly Consolidated Statements of Comprehensive Income For the three months ended September 30 Note Profit for the period 23,768 28,252 Other comprehensive income, net of taxation Items that will not be reclassified to net profit or loss: Remeasurement of defined benefit plans (2) 3 Fair value movements on FVTOCI equity financial assets (1,898) 1,307 Items that may be reclassified to net profit or loss: Foreign currency translation adjustments (26,125) (11,100) Effective portion of net changes in fair value of cash flow hedges (642) (36) Fair value movements on FVTOCI debt financial assets (12) 0 Other comprehensive income for the period, net of taxation (28,679) (9,826) Comprehensive income for the period (4,911) 18,426 Comprehensive income attributable to: Owners of the parent (4,610) 18,205 Non-controlling interests (301) 221 Comprehensive income for the period (4,911) 18,426 F-6

22 (3) Condensed Quarterly Consolidated Statements of Changes in Equity For the six months ended September 30,2015 Total equity attributable to owners of the parent Additional Other Common Retained Treasury Note paid-in components Stock earnings stock capital of equity Total Non- Total controlling interests equity As of April 1, , , ,787 (1,072) (27) 746,491 8, ,747 Comprehensive income Profit for the period 46,857 46, ,419 Other comprehensive income (16,857) (16,857) (489) (17,346) Total comprehensive income 30, ,073 Transactions with owners directly recognized in equity: Purchase of treasury stock (25) (25) - (25) Conversion of convertible bonds 10,713 10, ,356-21,356 Dividends paid to the owners of the parent 9 (11,764) (11,764) - (11,764) Dividends paid to non-controlling interests - (67) (67) Transfer to retained earnings (1,896) 1, Other (86) (44) As of September 30, , , ,984 (16,033) (29) 786,100 8, ,276 F-7

23 For the six months ended September 30,2016 Total equity attributable to owners of the parent Additional Other Common Retained Treasury Note paid-in components Stock earnings stock capital of equity Total Non- Total controlling interests equity As of April 1, , , ,168 (56,159) (12,111) 763,023 8, ,369 Comprehensive income Profit for the period 50,110 50, ,516 Other comprehensive income (75,821) (75,821) (680) (76,501) Total comprehensive income (25,711) (274) (25,985) Transactions with owners directly recognized in equity: Purchase of treasury stock (11) (11) - (11) Dividends paid to the owners of the parent 9 (11,864) (11,864) - (11,864) Dividends paid to non-controlling interests - (18) (18) Transfer to retained earnings 250 (250) Other (1) As of September 30, , , ,664 (132,230) (12,121) 725,437 8, ,535 F-8

24 (4) Condensed Quarterly Consolidated Statements of Cash Flows For the six months ended September 30 Note Cash flows from operating activities: Profit for the period 47,419 50,516 Adjustments to reconcile profit for the period to net cash provided by operating activities Depreciation and amortization 30,491 28,856 Gain from sales, disposal or impairment of property, plant and equipment (227) (1,289) Financial income (32) (149) Equity in net (income) loss of associates (5) 17 Deferred income taxes 2,166 2,605 Current income taxes 12,562 13,172 Foreign currency adjustments (596) 1,106 (Decrease) increase in retirement benefit liability (79) 305 Increase in accounts receivable (13,367) (16,408) Increase in inventories (11,802) (1,768) Increase in accounts payable 9,960 32,814 Other, net 3,832 (933) Interests and dividends received 953 1,207 Interests paid (910) (1,651) Income taxes paid (10,726) (11,907) Net cash provided by operating activities 69,639 96,493 F-9

25 For the six months ended September 30 Note Cash flows from investing activities: Additions to property, plant and equipment (47,814) (30,483) Proceeds from sales of property, plant and equipment Proceeds from sales or redemption of marketable securities 1, Acquisitions of business, net of cash acquired (9,721) (2,242) Other, net (3,815) (2,901) Net cash used in investing activities (59,269) (34,760) Cash flows from financing activities: Increase (decrease) in short term borrowings 38,324 (21,425) Repayments of long term debt (12,977) (1,861) Purchase of treasury stock (25) (11) Dividends paid to the owner of the parent 9 (11,764) (11,864) Other, net (84) 219 Net cash provided by (used in) financing activities 13,474 (34,942) Effect of exchange rate changes on cash and cash equivalents (7,140) (33,799) Net increase (decrease) in cash and cash equivalents 16,704 (7,008) Cash and cash equivalents at beginning of period 269, ,942 Cash and cash equivalents at end of period 286, ,934 F-10

26 Notes to Condensed Quarterly Consolidated Financial Statements 1. Reporting entity Nidec Corporation (the Company) is a corporation located in Japan, whose shares are listed on the Tokyo Stock Exchange. The registered address of headquarters and principal business offices are available on the Company s website ( Condensed Quarterly Consolidated Financial Statements as of September 30, 2016 consist of the Company and its consolidated subsidiaries (NIDEC), and shares of associates of NIDEC. NIDEC mainly designs, develops, produces, and sells products as described below: i. Small precision motors, which include spindle motors for hard disk drives, brushless motors, fan motors, vibration motors, brush motors and motor applications. ii. Automotive, appliance, commercial and industrial products, which includes automotive motors and components, home appliance, commercial and industrial motors and related products. iii. Machinery, which includes industrial robots, card readers, test systems, pressing machines and power transmission drives. iv. Electronic and optical components, which include switches, trimmer potentiometers, lens units and camera shutters. v. Others, which include services. 2. Basis of Preparation (1) Compliance with International Financial Reporting Standards (IFRS) The condensed quarterly consolidated financial statements of NIDEC have been prepared in accordance with IAS 34 Interim Financial Reporting pursuant to the provision of article 93 of Regulations for Quarterly Consolidated Financial Statements, as the Company meets the criteria of a Designated IFRS Specified Company defined under article 1-2 of the regulations. NIDEC adopts IFRS for the first time this financial year (commencing on April 1, 2016 and ending on March 31, 2017), and so the annual consolidated financial statements for the year are the first ones prepared in conformity with IFRS. The date of transition of NIDEC to IFRS is April 1, Explanations of how the first time adoption of, and the transition to, IFRS have affected NIDEC s financial position, business results and cash flows are provided in Note 14. First-Time Adoption of IFRS. (2) Basis of measurement The condensed quarterly consolidated financial statements have been prepared on a historical cost basis, except for some assets and liabilities, including derivative and other financial instruments measured at fair value. (3) Presentation currency and level of rounding The condensed quarterly consolidated financial statements are presented in Japanese Yen, which is also the Company s functional currency, and figures are rounded to the nearest million yen, except as otherwise indicated. (4) Early adoption of new IFRS standards NIDEC has early adopted IFRS 9 Financial instruments (amended in July 2014). 3. Significant accounting policies Significant accounting policies are applied to all periods mentioned in the condensed quarterly consolidated financial statements, including the consolidated statement of financial position on the transition date of IFRS. Significant accounting policies are stated in notes to NIDEC s condensed quarterly consolidated financial statements for the three months ended June 30, F-11

27 4. Significant accounting estimates, judgments and assumptions The preparation of the condensed quarterly consolidated financial statements requires management of NIDEC to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, income, expenses and disclosure of contingent assets and liabilities. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis, and the effects resulting from revisions of accounting estimates are recognized in the period in which the estimates are revised and in future periods affected by the revision. Judgments and estimates accompanying significant risks that may cause material adjustments to the carrying amounts of assets and liabilities in the current and next fiscal years are the same as those for the condensed consolidated financial statements for the first quarter of the current fiscal year, covering the period from April 1, 2016 to June 30, Segment Information (Operating segment information) The operating segments reported below are defined as components of an enterprise for which separate financial information is available and regularly reviewed by management. Companies and company groups which are the current profit management unit are identified as reporting segments. NIDEC s operating segments are as follows; Name Components and basic information 1. Nidec Corporation Nidec Corporation in Japan, which primarily develops and sells hard disk drives spindle motors, other small precision motors and automotive products. 2. Nidec Electronics (Thailand) Nidec Electronics (Thailand) Co., Ltd., a subsidiary in Thailand, and its consolidated subsidiaries, which primarily produce and sell hard disk drives spindle motors. This segment also includes other subsidiaries in Asia which produce components for hard disk drives. 3. Nidec Singapore Nidec Singapore Pte. Ltd., a subsidiary in Singapore, and its consolidated subsidiary, which primarily sell hard disk drives spindle motors and other small precision motors. 4. Nidec (H.K.) Nidec (H.K.) Co., Ltd., a subsidiary in Hong Kong, and its consolidated subsidiaries, which primarily sell hard disk drives spindle motors and other small precision motors. 5. Nidec Sankyo Nidec Sankyo Corporation, a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell machinery, automotive products, electronic parts and other small precision motors. 6. Nidec Copal Nidec Copal Corporation, a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell optical and electronic parts, machinery and other small precision motors. 7. Nidec Techno Motor Nidec Techno Motor Corporation, a subsidiary in Japan, and its consolidated subsidiaries, which primarily produce and sell commercial and industrial products. 8. Nidec Motor Nidec Motor Corporation and other subsidiaries in North America, which are subsidiaries of Nidec Americas Holding Corporation, an intermediate holding company in the United States, as well as other subsidiaries in Latin America, Asia and Europe, which primarily produce and sell home appliance, commercial and industrial products. 9. Nidec Motors & Actuators Nidec Motors & Actuators (Germany) GmbH in Germany and other subsidiaries in Europe, North America, Latin America, Japan and Asia, which primarily produce and sell automotive products. 10. Others Subsidiaries that are operating segments but not designated as reportable segments due to their immateriality. F-12

28 The following tables show net sales to external customers and other financial information by operating segment: Net sales to external customers: Name For the six months ended September Nidec Corporation 15,684 17,038 Nidec Electronics (Thailand) 43,678 40,700 Nidec Singapore 35,776 25,870 Nidec (H.K.) 47,022 61,250 Nidec Sankyo 65,644 64,060 Nidec Copal 22,439 17,385 Nidec Techno Motor 29,904 29,932 Nidec Motor 110, ,644 Nidec Motors & Actuators 123, ,948 Others 93,693 80,203 Consolidated total 587, ,030 Name For the three months ended September Nidec Corporation 8,196 8,963 Nidec Electronics (Thailand) 23,663 21,857 Nidec Singapore 19,780 13,408 Nidec (H.K.) 26,869 37,554 Nidec Sankyo 33,879 31,914 Nidec Copal 11,226 8,640 Nidec Techno Motor 13,339 13,429 Nidec Motor 55,390 53,903 Nidec Motors & Actuators 63,914 56,148 Others 46,055 42,008 Consolidated total 302, ,824 F-13

29 Net sales to other operating segments: Name For the six months ended September Nidec Corporation 89,129 88,537 Nidec Electronics (Thailand) 22,332 19,462 Nidec Singapore Nidec (H.K.) 696 3,768 Nidec Sankyo Nidec Copal 5,432 4,780 Nidec Techno Motor 2,284 2,411 Nidec Motor Nidec Motors & Actuators 11,463 10,073 Others 81,571 79,981 Total 214, ,604 Intersegment elimination (214,083) (209,604) Consolidated total - - Name For the three months ended September Nidec Corporation 51,223 54,164 Nidec Electronics (Thailand) 10,821 10,451 Nidec Singapore Nidec (H.K.) 302 3,506 Nidec Sankyo Nidec Copal 3,720 1,734 Nidec Techno Motor 1,347 1,231 Nidec Motor Nidec Motors & Actuators 5,433 4,965 Others 45,756 49,536 Total 119, ,886 Intersegment elimination (119,159) (125,886) Consolidated total - - F-14