News - 26 July 2021 05:11

Nidec announced its first-quarter financial results and the mid-term strategic goal Vision2025

Nidec Corporation ― the world's No.1 comprehensive motor manufacturer ― announced its first-quarter financial results and the mid-term strategic goal Vision2025.

Download the full presentation

Summary of Q1 FY2021

Net sales stood at a record high of ¥447.5 billion, 32.8% higher Y/Y. Operating profit significantly increased 60.3% Y/Y to ¥44.6 billion.
Q1 quarterly operating profit ratio was 10.0% due to enhanced profitability through WPR4 program implemented since FY20, and sales recovery. Double-digit operating profit ratio was successfully maintained for four consecutive quarters.
Profit attributable to owners of the parent increased 66.8% Y/Y to ¥33.5 billion.

Full copy of Nidec’s financial statements for the three-month period ended June 30, 2021:
https://www.nidec.com/en/ir/news/2021/news0721-02/

Highlights by business

Small Precision motor (Slide 7):
In response to the structural change in the HDD market, our small precision motor division is implementing business portfolio transformation as we explained before. The quarterly sales of other small motors in green color has increased quarter-on-quarter and we are starting to focus on the launch of mass production in new business areas such as mobility, including mini EV, electric motorcycle, electric scooters, electric-assisted bicycle, etcetera, for our mid-term growth.

Automotive (Slide 8 and 9):
The automotive existing business, which means automotive business, excluding impact of traction motors related business and Nidec Mobility business is keeping double-digit operating profit ratio for four consecutive quarters after bottoming out in the first quarter of FY ‘20.

The cumulative number of EVs using our E-Axle has reached 161,000 units. In both May and June, the monthly sales volume has exceeded the past peak in December 2019, boosted by recently launched models such as Aion Y by GAC and Geometry A by Geely.

Appliance, Commercial & Industrial (Slide 10):
The operating profit ratio of ACI is steadily improving after bottoming out in the fourth quarter of FY ‘19 and reached 10.5%.

Other Product Groups (Slide 11):
The operating profit ratio of other product groups, which consist of machinery, electric and optical components and others keeps achieving around 15% level after bottoming out in the fourth quarter of FY ‘19.

Mid-Term Strategic Goal Vision2025

Based on the solid foundation period led by the founder Shigenobu Nagamori, Nidec is going to enter new era with a new management structure driven by the new CEO, Jun Seki. We are aiming for ¥2 trillion in net sales in FY ‘22, which was originally the target for FY ‘20 celebrating our 50th anniversary in FY ‘23, aiming for ¥4 trillion in net sales in FY ‘25, which is the final year of Vision 2025 and eventually ¥10 trillion in sales in FY ‘30. We keep changing and growing sustainably for 100 years and beyond to be truly a global company.

In fiscal year ‘22, we are also aiming to increase the sales and profit per employee by 30% by improving the productivity and achieve over 10% return on invested capital, or ROIC. For FY ‘25, ¥4 trillion in net sales, doubles the sales and profit per employee and to become a top rated ESG company.

Framework for the New Mid-Term Strategic Goals

1. Commitment to Profitable Growth (Slide 15)

In Vision 2025, we are going to tackle both growth strategy, including organic plus M&A and efficiency improvement in capital investment. In fiscal year ‘25, we are aiming to achieve ¥3 trillion in organic sales and ¥1 trillion through M&A and for the ¥3 trillion organic sales, we are aiming for 15% operating profit ratio and 15% ROIC for the total company.

2. Business Portfolio Management (Slide 16)

In Vision 2025, we are aiming to achieve high growth with aggressive investment in the key growth area. As you see the graph on the right, small precision motors organic growth target is set at ¥600 billion, while sales from new M&A are expected to be ¥200 billion. Likewise, automotive and ACI organic sales are ¥1 trillion, new M&A of ¥300 billion respectively and other product group organic sales of ¥400 billion plus new M&A of ¥200 billion.

3. Measures for Boosting Top-Line Growth (Slide 17)

In Vision 2025, we will evolve our business model and business areas to accomplish ¥10 trillion sales. This slide is illustrating the example of EVs and robotics, where as the horizontal line showing business areas goes from device alone, module, system to solution. The vertical line showing expected market size expands accordingly. From left bottom to right top, we designed the business expansion with seamless integration.

4. Basic Policy for EV Traction Motors (Slide 18)

Nidec is leading the EV era as a company who triggers the creative disruption and goes beyond the industry tradition. As you see the graph on the right, all new vehicles sold in China will be eco-friendly in 2035 and the European Union has proposed effective ban for new ICE vehicles such as gasoline vehicles, including hybrid ones from 2035. Based on these strong tailwinds in our favor in the EV market, we have revised our sales target volume for our E-Axle in FY ‘25 from the previously announced 2.5 million to 2.8 million units.

Pathways to Carbon Neutrality (2040)

This is one of the important initiatives for Vision 2025. We are going to declare carbon neutrality in Scope 1 and Scope 2 by FY ‘40 and layout Scope 3 supply chain action plan by FY ‘25. We will reduce our CO2 emissions through extensive introduction of renewable electricity, efficiency boost, shift to low carbon fuels and funding third-party projects to offset unavoidable emissions.