NIDEC CORPORATION TSE: 6594 OTC US: NJDCY
http:// www.nidec.com/en-Global/
Third Quarter Fiscal 2016 ResultsThree and Nine Months Ended December 31, 2016
January 24, 2017
Disclaimer Regarding Forward-looking StatementsThese 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 picture of Nidec Arisa's servo press with pressurizing capacity of 4,500 tons, 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 Automoción, one of the largest manufacturers of metal automotive components.
2
Consolidated Profit/Loss (IFRS-Based)*
Millions of Yen, except for EPS and FX rate
3Q/FY2015
(Apr -Dec)
3Q/FY2016
Change
(Apr-Dec)
FY2016
Forecast
Net sales | 895,353 | 868,228 | -3.0% | 1,200,000 |
Operating profit | 90,286 | 106,197 | +17.6% | 140,000 |
Operating profit ratio Profit before | 10.1% | 12.2% | - | 11.7% |
income taxes 92,467 107,771 +16.6% 140,000
Profit attributable to
owners of the parent EPS (Yen) | 234.19 | 275.25 | +17.5% | 354.01 |
FX rate (Yen/US$) | ||||
Average: | 121.70 | 106.63 | -12.4% | 110.00 |
Term end: | 120.61 | 116.49 | -3.4% | (Assumed for 4Q) |
69,526 81,638 +17.4% 105,000
Note: Based on the current forecast of sales volume, every one yen appreciation or depreciation against the U.S. dollar and the euro for FY2016 is estimated to have an annualized impact of
billion yen and 1.10 billion yen on net sales, respectively, and 1.10 billion yen and 0.30 billion yen on operating profit, respectively.
*From FY2016 onward, our financial statements are prepared under International Financial Reporting Standards (IFRS). This slide includes forward-looking statements. See Disclaimer on Page 2. 3
Summary of 3Q FY2016
Record-high nine months operating profit, profit before income taxes and profit attributable to owners of the parent
Record-high three months profit before income taxes and profit attributable to owners of the parent
Double-digit operating profit ratio maintained for both three and nine month periods (10.5%) in Automotive, Appliance, Commercial and Industrial Products, which are key drivers of the company's business portfolio transformation
Upward revision to FY2016 profit forecasts
4
-0.7
-0.5
-1.7
+0.1
+0.2
-0.1
-3.1
-0.9
+16.7
+3.6
Apr-Dec/FY16
Electronic
and optical components and others
Machinery
Automotive,
appliance, commercial and industrial products
+4.2
(Billions of Yen)
+41.7
+16.7
+3.8
+11.7
IFRS-Based Year-on-Year Changes (Nine Months Ended Dec. 2016)
(Billions of Yen)
-101.0
895.4
868.2
Apr-Dec/FY15
Exchange
rate
Small precision
motors
+8.0
106.2
90.3
-15.7
Apr-Dec/FY15Exchange Small precision
rate motors
Automotive,
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)
(Billions of Yen)
+12.4
+1.9
+5.3
287.8
304.2
Jul-Sep/FY16
(Billions of Yen)
Exchange
rate
+2.4
Small precision
motors
Automotive,
appliance, commercial and industrial products
Machinery
Electronic
and optical components and others
Oct-Dec/FY16
37.5
37.2
Jul-Sep/FY16Exchange Small precision
rate motors
Automotive,
appliance, commercial and industrial products
Machinery
Electronic
and optical components and others
Eliminations/ Oct-Dec/FY16
corporate
6
Upward Revision to FY2016 Profit Forecasts (IFRS-Based)
As of Apr. 25,
Millions of Yen, except for EPS, dividends and
FX rate 2016
As of Oct. 24, 2016
As of Jan. 24, 2017
Net sales | 1,250,000 | 1,200,000 | 1,200,000 |
Operating profit | 130,000 | 135,000 | 140,000 |
Operating profit ratio | 10.4% | 11.3% | 11.7% |
Profit before income taxes | 130,000 | 133,000 | 140,000 |
Profit attributable to
owners of the parent 98,000
EPS (Yen) 330.41
Dividends (Yen) 80.00
100,000
337.15
85.00
105,000
354.01
85.00
FX rate (Yen/US$) FX rate (Yen/€)
110
120
(Assumed)
100
110
(Assumed for 3Q
110
117
(Assumed for 4Q)
This slide includes forward-looking statements. See Disclaimer on Page 2.
onward) 7
Mid-Term Strategic Goal Vision2020This section includes forward-looking statements. See Disclaimer on Page 2.
8
Vision2020: Mid-Term Strategic Goal
Continuous pursuit of profit & strong growth
Target for consolidated net sales: 2 trillion yen (including sales attributable to new M&A
of approx. 500 billion yen)
Sales target for automotive: 700 billion to 1 trillion yen
Target for consolidated operating profit ratio: 15%
Target for ROE: 18%
(assuming shareholders' equity ratio of 60%)
Five regional HQ management units
Small precision motors
Automotive
Appliance, commercial and
industrial products
Other product groups
700.0
to 1 T
448.0
400.0
to 600.0
400.0
to 600.0
348.4
271.3
283.4
Key Growth Areas
69.2
94.2
This slide includes forward-looking statements. See Disclaimer on Page 2. 9
Continuing Growth Strategy with a Focus on Key Growth Areas
FY2010
Net sales: 676 billion yen
(Sales: Billions of Yen)
FY2015
Net sales: 1.178 trillion yen
FY2020
Net sales: 2 trillion yen (target)
New M&A
500
200.0
to 300.0
Key Growth Areas
164.2
Key Growth Areas
175.6
This slide includes forward-looking statements. See Disclaimer on Page 2.
10
Sales expected to expand at
CAGR 6% to FY2020
・HDD motors
►Leveling off
・Other small precision motors
►Double-digit growth driven
by a constant flow of new products
Aiming to exceed 20% operating profit ratio
0%
0
10%
400
15%
20%
HDD motors
Operating profit ratio
600
Vibration motors, tactile devices
Other small precision motors (excl. vibration motors and tactile devices) Target!
600 billion-yen organic sales
growth coming into view for both "Automotive" and "Appliance, Commercial and Industrial Products"
New M&A
500
New M&A
700
to 1 T
700
to 1 T
Key Growth Areas Outpace Initial Projections
FY2020
Net Sales: 2 trillion yen (Target)
Small precision
motors
(Sales: Billions of Yen)
Automotive
Appliance, commercial
and industrial products
Other product groups
600 600
400
to 600
400
to 600
400
to 600
500
200
to 300
400
200
to 300
Solid progress toward achieving
sales target of 2 trillion yen in FY2020
Key Growth Areas
Key Growth Areas
This slide includes forward-looking statements. See Disclaimer on Page 2.
11
Small Precision Motors Growth Outlook
(Sales: Billions of Yen)
(Operating Profit Ratio: %)
200
5%
FY15
FY16
FY17
FY18
FY19
FY20
Nidec estimates based on various sources.
This slide includes forward-looking statements. See Disclaimer on Page 2. 12
HDD Market Mid-Term Trend
Shipping volume | PC | External | Consumer Electronics | Data Center | Enterprise |
(Millions of Units) | (Near Line Drive) |
600 552 564
500
400
469
HDD Shipments (LHS)
424
400
HDD Capacity (RHS)
375 360 341
Capacity (Exabyte: 1018 Byte)
1200
1000
•Continuous
800
increase in HDD
300
200
100
600
400
200
capacity
•Shipments on downward trend
0
Industry sales
0
'13 '14 '15 '16 '17 '18 '19 '20 (CY)
(Billions of US dollars)
HDD unit price
40 HDD unit price (RHS)
30
20
Sales of HDD industry (LHS)
10
0
80 (USD) •HDD unit price (in
60 USD terms) on
40 uptrend
20 •HDD industry sales
0 remaining flat
13
'13 '14 '15 '16 '17 '18 '19 '20 (CY)
102
97
112
114
99
106
112
93
99
100
•3Q/FY16 results
surpassed initial forecast
•Annual forecast
revised upward
83
97
92
81
83
86
HDD shipments: 410 mil. units/year Nidec motor shipments: 353 mil. units/year
FY16/1Q 2Q 3Q 4Q
(Actual) (Actual) (Forecast) (Forecast)
FY16/1Q
(Actual)
2Q
(Actual)
3Q
4Q
HDD shipments: 425 mil. units/year Nidec motor shipments: 368 mil. units/year
(Actual) (Forecast)
Nidec estimates based on various sources. This slide includes forward-looking statements. See disclaimer on page 2 of this presentation.
HDD Market Short-Term Trend
HDD Shipments
Nidec Motor Shipments
(Millions of Units)
Previous FY2016 Forecast
(October 25, 2016)
Revised FY2016 Forecast
(January 24, 2017)
Nidec estimates based on various sources.
This slide includes forward-looking statements. See Disclaimer on Page 2.
14
Vision2020 : Targeting Operating Profit of 300 Billion Yen
Three key hands-on management approaches toward achieving higher profitability
Well-digging management
A well of limitless ideas needs constant digging to
keep flowing
Household accounts management
Live within your means.
Accelerate growth on absolute profit amounts
Household
Well-digging accounts
1000 cuts management
A "big issue" is not that big once it is cut into smaller
pieces.
1000 cuts
15
Improvement in Profitability of Automotive (Example: Subsidiary A)
Tackle with underlining issues per cost category through "well-digging" and "1000 cuts" approaches within PDCA cycle
20%
(Operating profit ratio)
Target!
Plan and implement on a weekly basis (executive officer)
P
15%
10%
Procurement cost
Labor cost
Direct expenses
SGA
A
Execute improvement measures and compile feedback
Follow up the daily progress (CFO project team)
D
5% C
0%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY15 FY16
Establish improvement measures (CEO and officers )
This slide includes forward-looking statements. See Disclaimer on Page 2. 16
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 "1000 cuts" approach
Operating
profit ratio Procurement cost ratio
Direct labor cost ratio
Indirect labo 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
0%
1H
FY15
2H
1H
FY16
2H (Forecast)
This slide includes forward-looking statements. See Disclaimer on Page 2. 17
(Cost-profit ratio )
Target!
100%
Less than 10%
Less than 15% Over 15%
75%
Less than 60%
Mid-50%
50%
Start with focusing on
procurement cost reduction
25%
*VE: Value Engineering ** VA: Value Analysis
Acquisition of U.S.-Based Canton Elevator, Inc.
Accelerate elevator package business in North American market
Strong presence WeakpresenceCanton |
Package |
Cabinet |
Control |
Motor |
After acquisition |
Company name Canton Elevator, Inc. Headquarters North Canton, Ohio, U.S. Foundation 1946
Subsidiary Canton Architectural Products, Inc.
Director and Chairman: Pradeep Sood (Business Platform Leader of the Elevator & Drive Systems business of Nidec Appliance, Commercial & Industrial
Directors
Principal business
Motor Business Unit)
Director and President: Bryan Haught, former Sales Vice President of Canton
Other two directors
Design, manufacture and sales of commercial, residential, and freight elevator systems and components
Hydraulic jack
Hydraulic power unit
Employees 98
Sales US$33.7 million
(fiscal year ended December 31, 2015)
18
Vision2030: Stepping Stones toward Becoming 10-Trillion Yen Company (1)
1. Fifty-fifty sales contribution from M&A
and organic expansion re-boosting growth
2.
Nidec Corporation Head Office ANNEX Global Learning Center
(completion scheduled for spring 2017)
New incubator for globally competent
employees slated for completion this spring
►Global Learning Center
3. Expansion of Nidec Center for Industrial
Science
►New level of craftsmanship based on
modern manufacturing science
Nidec Center for Industrial Science
First-phase construction (left): completion scheduled for January 2018 Second-phase construction (right): completion scheduled for 2020-2025
19
Vision2030: Stepping Stones toward Becoming 10-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
3.
"Work Style Reform" motivational poster
Closing gender gaps in leadership
positions (particularly in Japan)
►Supportive work place environment
20
Vision2030: Stepping Stones toward Becoming 10-Trillion Yen Company (3)
Brand promotion scheme featuring a popular Kyoto native actor
Kuranosuke Sasaki
Raising brand recognition
►TV commercials, corporate
website, etc.
Enhancing corporate identity
►Brand unification
Integrating all group companies
►unified wage and performance
appraisal system
►personnel exchange
Professional baseball sponsorship (Tokyo Yomiuri Giants)
21
Nidec IR Contacts
Japan Tel: +81-75-935-6140 E-mail: ir@nidec.com
U.K. Tel: +44-870-351-7388 E-mail: iwai.yuji@nidec.com
U.S. Tel: +1-212-703-7988 E-mail: 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.
22
Appendix
Performance Trends & Product Group Overview23
Sales by Product Group (Apr-Dec FY2016)
(IFRS-Based)
0.3%
Parenthetic percentages represent FY2015 mix
Electronic & Optical
Components
Camera shutters, switches,
trimmer potentiometers, processing, precision plastic mold products
Machinery
Industrial robots, circuit board testers,
Others
10.0%
(9.0%)
(0.3%) Services, music boxproducts
5.5%
(5.5%)
HDD Motors
16.6%
(18.1%)
Small Precision Motors
38.1%
(39.3%)
high-speed pressing machines, chip
Appliance
21.5% Other Small Motors
mounters, measuring equipment, power transmission equipment, factory automation system, card readers
Commercial Industrial
24.2%
(23.2%)
B
Auto
(21.2%)
Optical disk drive motors, OA equipment motors,
polygon scanners motors, MPU cooling fans, game machine fans,
PC/communications equipment
Automotive,
Appliance, Commercial and Industrial Products
46.2%
(45.9%)
22.0%
(22.7%)
fans, home appliance fans, automobile fans, vibration motors, brushed motors, stepping motors, actuator units
24
Financial Highlights (IFRS-Based)
(Billions of Yen)
Net sales Operating profit Operating profit ratio (%)
(Billions of Yen)
Profit before income taxes
Profit attributable to owners of the parent
41.5
302.3308.0
304.2
285.0 282.9
276.2
31.5
287.8
37.5
37.2
31.6 30.6
30.3
29.1
37.2
31.5
29.9
10.5%
29.7
9.8%
30.7
10.0%
27.4
9.7%
11.4%
13.0%
12.2%
23.3
23.6
22.7
24.7
20.4
22.0
28.1
1Q/FY15
2Q
3Q 4Q 1Q/FY16
2Q
3Q
1Q/FY15
2Q
3Q 4Q 1Q/FY16
2Q
3Q
Year-end Interim Consolidated EPS
303 354 (Forecas
40.0
45.0 (Fore
cast)
40.0
40.0
(Yen/share)
t)
(Billions of Yen)
Operating activities Investment activities Free cash flow
113.5
103.0
34.146.1
-79.3
-56.9
FY15 FY16
25
Apr-Dec/FY15 Apr-Dec/FY16
This slide includes forward-looking statements. See Disclaimer on Page 2.
Product Group Overview (IFRS-Based)
(Billions of Yen)
Sales Operating profit
(Billions of Yen)
Sales Operating profit
17.3 17.3
18.6
19.2
137.3
138.9
134.8
143.7
138.3
127.4
135.1
14.2
13.8
14.2
14.2
10.5
10.4
10.8
19.2
13.7
11.6
104.1118.5
129.6
95.9
94.8
116.9
119.2
1Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q
(Billions of Yen)
Sales Operating profit
1Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q
(Billions of Yen)
Sales Operating profit
5.3
27.0 27.4 25.9 27.6 27.1 26.7
4.9
4.1 4.1
32.7
5.6
15.8
16.7
16.7
14.8
15.2
2.1
15.9
2.8
16.3
2.9
3.6 3.2
1.4
1.6
1.5
0.9
1Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q
1Q/FY15 2Q 3Q 4Q 1Q/FY16 2Q 3Q
26
Consolidated Quarterly Sales and Operating Profit
(Net Sales in Billions of Yen)
400
Sales (LHS) Operating profit (RHS)
40
350
35
300
30
250
25
200
20
150
Japan earthquake
15
100
Thai
Lehman crisis floods
10
(Operating Profit in Billions of Yen)
50 Structural reform 5
0 0
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
-50
FY08 FY09 FY10 FY11 FY12 FY13 FY14FY15
U.S. GAAP IFRS
FY16
-5
-25.4
2.5
(Operating Profit
15 Ratio, %)
10.8%
10.7%
11.7%
New M&A
10
1.5
9.7%10.0%
Net sales Netsales
Net sales
Net sales 1.18T1.20T
Net sales
Net sales 571.6B
709.3B Net sales
875.1B
676.0B
Net sales
682.3B
5
27
Vision 2020: 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)
15%
13.7%
13.9%
2
Net sales
2T
1.03T
1
0.5
2.5%
0 0
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY20
(Forecast) (Target)
U.S. GAAP IFRS
This slide includes forward-looking statements. See Disclaimer on Page 2.
28
Vision 2020: 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
(Billions of Yen)
Shareholders' equity (LHS) Shareholders' equity ratio (RHS)
ROE (RHS)
Operating profit ratio (RHS)
(%)
1,500 65%
60%
54.9%
55.4%
60% The three elements for
ROE improvement
49.1%
1,200 55%
46.2%
47.5%
Net profit on sales
Total asset turnover
44.4%
50% ・ Financial leverage
42.3%
41.3%
900 45%
Shareholders' equity ratio
745.0
763.0
600
ROE
300
9.2%
16.3%
15.0%
13.9% 13.7%
11.2%
415.7
518.0
12.1% 12.0%
11.9%
18%
15%
20%
15%
10%
Operating profit ratio
0
8.9%
297.1
340.3
355.3
10.7%
370.2
2.5%
2.0%
9.7% 10.8%10.0%
5%
0%
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY20
(Target)
U.S. GAAP IFRS
This slide includes forward-looking statements. See Disclaimer on Page 2. 29
Nidec Corporation published this content on 24 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 January 2017 08:10:06 UTC.
Original documenthttp://www.nidec.com/en-Global/corporate/news/2017/news0124-01/
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