NIDEC : Third Quarter Fiscal 2015 Results

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Third Quarter Fiscal 2015 Results

Three and Nine Months Ended December 31, 2015

January 21, 2016

Note Regarding Forward-looking Statements

These presentation materials and the related discussions contain forward-looking statements including expectations, estimates, projections, plans and strategies. Such forward-looking statements are based on management's targets, assumptions and beliefs in light of the information currently available. Certain risks, uncertainties and other factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, changes in customer circumstances and demand, exchange rate fluctuations, and the Nidec Group's ability to design, develop, mass produce and win acceptance of its products and to acquire and successfully integrate companies with complementary technologies and product lines. Please see other disclosure documents filed or published by the Nidec Group companies, including the latest Form 20-F and Japanese securities report, for additional information regarding such risks and uncertainties. Nidec undertakes no obligation to update the forward-looking statements unless required by law.

The photograph on the first slide features wearable cameras equipped with Nidec Sankyo's newly developed image stabilization system. Nidec Sankyo's new image stabilizer effectively suppresses blurring associated with motion and/or shaking caused by the wearer's body movements, or high-frequency vibrations generated by robots and drones, capturing clearer and sharper images.

2

Consolidated Profit/Loss

3Q FY2014 (Apr-Dec)	3Q FY2015 (Apr-Dec)	Change (%)	FY2015 Forecast
Net Sales	753,766	895,353	+18.8%	1,150,000
Operating Income	80,727	93,990	+16.4%	130,000
Operating Income Ratio	10.7%	10.5%	-	11.3%
Income Before Tax	81,309	94,357	+16.0%	126,000
Net Income	58,031	70,928	+22.2%	90,000
EPS (Yen)	209.27	238.91	+14.2%	302.84
FXRate Average: (Yen/US$) Term end:	106.87 120.55	121.70 120.61	+13.9% +0.0%	115.00 (Assumed)

Millions of Yen, except for percentages, EPS and FX Rates

Note: Based on the current forecast of sales volume, every one yen appreciation or depreciation against the U.S. dollar and the euro for FY2015 is estimated to have an annualized impact of 6.80 billion yen and 1.00 billion yen on sales, respectively, and

0.90 billion yen and 0.25 billion yen on operating income, respectively.

3

Summary of 3Q FY2015

• Record-high nine months nets sales, operating

  income,

  income before taxes and net income

  
  

• Net sales and operating income increased for eight and eleven consecutive quarters, respectively, marking the highest-ever levels.

  
  

• Cash and cash equivalents exceeded interest-bearing debt for the first time in 23 quarters, which was

  achieved three months ahead of plan.

  Financial base

  and financial discipline were strengthened eyeing

  Vision 2020.

  
  

  4

  Consolidated Quarterly Net Sales and Operating Income

  
  

  Eight consecutive quarters of net sales increase

  and eleven consecutive quarters of operating income increase

  350 Net Sales (LHS) Operating Income (RHS) 35

  (All figures in Billions of Yen)

  300 30

  250 25

  Operating Income

  Net Sales

  200 20

  150 Japan 15

  Earthquake

  
  

  Thai

  100 Floods 10

  50 5

  Lehman Crisis Structural Reform

  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

  -50

  FY2008

  FY2009

  -5

  FY2010 FY2011 FY2012 FY2013 FY2014 -25.4

  5

  
  

  HDD Market Trend

  
  

  Nidec's market position edged up while total HDD demand remained weak

  
  

  
  

  Previous FY2015 Forecast (Oct. 22, 2015)

  HDD Shipments

  Nidec Motor Shipments

  
  

  Revised FY2015 Forecast (Jan. 21, 2016)

  
  

  (Millions of Units)

  160

  (Millions of Units)

  160

  
  

  120 110 116 117113

  
  

  120

  119

  110113

  
  

  100

  
  

  80 80

  
  

  40 87 99 95 94

  40 87 99 9683

  
  

  0	FY15/1Q	2Q	3Q	4Q	0	FY15/1Q	2Q	3Q	4Q
  (Actual)	(Actual)	(Forecast)	(Forecast)	(Actual)	(Actual)	(Actual)	(Forecast)

  This slide includes forward-looking statements. See disclaimer on page 2 of this presentation.

  (Nidec estimates based on various sources) 6

  Groundbreaking Technologies Reshaping Social Landscape

  
  

  New business opportunities surging toward 2020 and beyond

  
  

  
  

  HMI

  Stricter power efficiency

  driving

  EV/PHEV

  requirements Autonomous

  (Human Machine

  Interface)

  Falling birthrate and aging society in developed countries

  
  

  Electronic control of road transport

  Resource saving, recycling,

  
  

  IoT AI* Smartfactory

  eco-conscious design/production

  (Ecology)

  
  

  Sophistication of communications infrastructure

  Robotics

  Drone

  Power assist suit

  Wearable VR Renewable

  Data analysis and processing (AI*) device

  
  

  *AI: Artificial Intelligence

  (Virtual reality)

  energy

  
  

  7

  
  

  Human-Machine Interface (HMI)

  
  

  Nidec's technologies contribute to connecting humans and machines

  
  

  pportiI>

  
  

  ee interlocked technologies su

  
  

  
  

  Sensors	Software	Motors
  (Input)	(AI and CPU)	(Output)

  
  

  ADAS (Advanced Driver Assistance Systems ) Display Display

  Example (2)

  IT

  Lane keep

  Millimeter

  Camera

  Surround view Rearview Occupant

  Head-up display (HUD) motor

  assist system wave radar module for camera lens

  camera

  detection

  Tactile device

  Tactile device

  (LKAS) unit unit

  sensing

  camera

  unit

  module system

  (ODS) unit

  
  

  Seat tactile motor

  Switch

  
  

  Example (1) Automotive

  8

  Robotics Products

  
  

  Penetrating applied fields with Nidec's core driving technology

  
  

  AC servo motor

  Brushed DC motor

  Camera and Sensor

  
  

  Communication robot

  
  

  Wide-angle image stabilizing system (TiltAC)

  
  

  Wide angle camera module

  
  

  Brushless DC motor

  Drone

  
  

  Wheel-in motor

  Interface Capability

  KINETEK Robot

  cleaner

  
  

  Stepping motor

  
  

  KINETEK

  
  

  
  

  Customized keypad and HMI assembly

  Custom-engineered touchscreen and front panel integration

  
  

  Smart AGV

  
  

  Reducer

  Tactile device

  Seimitsu Battery charger

  
  

  KINETEK Speed reducer (ABLE) Ultra-small/flatreducer

  for robots

  Motor contained actuator 9

  
  

  Examples of Subsidiaries Back on Growth Platform

  
  

  Fresh flow of new products refreshing business portfolio

  
  

  (Sales in Billions of Yen) (Sales in Billions of Yen)

  
  

  100% ownership

  100% ownership

  200 acquisition

  (Oct. 2012)

  100

  acquisition (Oct. 2013)

  
  

  100 50

  
  

  
  

  0

  FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY20

  
  

  0

  FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY20

  (Forecast) (Target) (Target) (Target) (Forecast) (Target) (Target) (Target)

  
  

  Automotive

  Energy conservation

  Labor saving

  Automotive lenses/cockpit

  Pump related products/housing and automation

  
  

  Automation of back-end process of LCD panels/

  semiconductor EFEM* robots

  Mobile Automotive

  Industrial, medical,

  nursing care and services

  Image stabilization, auto- focus/tactile devices

  
  

  View cameras, sensor cameras/tactile devices

  
  

  Laser marker/

  ultra-small geared motors

  *EFEM: Equipment Front End Module 10

  Nidec Center for Industrial Science

  Aiming to Be a Representative Manufacturer of 21st Century

  Manufacturing capability is the key to achieve 10 trillion yen sales in FY2030

  
  

  Conceptual drawing: Nidec Center for Industrial Science

  
  

  (Scheduled construction period: October 2016 to December 2017)

  
  

• Addresses technological challenges in product creation reflecting future needs

  
  

• Plays a pivotal role in optimizing production technology on a group-wide basis

  
  

• Fosters a world-class manufacturing engineering talent pool

  11

  
  

  Nidec Brands Debut at CES*

  
  

  Many business opportunities obtained through first participation in CES

• Robotics

  Intelligent drive motors (motor control technology), camera modules

• Tactile devices

  Tactile modules, oscillatory actuators, virtual reality system components, interface products (human-machine interface)

• Commercial robotics

Smart automatic guided vehicles, commercial drones, vertical six-axis robots

*CES (Consumer Electronics Show): The world's largest appliance trade show held in Las Vegas, Nevada, U.S.A. CES 2016 was held from Jan. 6 to 9, 2016. 12

Nidec IR Contacts

Japan	Tel: [phone]	E-mail: [e-mail]
U.K.	Tel: [phone]	E-mail: [e-mail]
U.S.	Tel: [phone]	E-mail: [e-mail]

*Notes:

Pursuant to FASB Accounting Standards Codification (ASC) 805 "Business Combinations," Nidec is currently evaluating the assets and liabilities acquired in the fiscal year ending March 31, 2016. These assets and liabilities have been recorded on its consolidated balance sheet based on preliminary management estimation as of December 31, 2015. Consolidated financial statements for the six months ended September 30, 2015 have been retrospectively adjusted to reflect the assets and liabilities of which fair value evaluation is completed.

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.

13

Appendix

Performance Trends & Product Group Overview

14

Sales by Product Group (Apr-Dec FY2015)

Electronic & Optical Components

Camera shutters, switches, trimmer potentiometers, processing, precision plastic mold products

Machinery

Industrial robots, circuit board testers, high-speed

Others

0.4%

(0.7%)

5.5%

(6.5%)

8.8%

(9.4%)

Parenthetic percentages represent FY2014 mix

Services,

musical products

Small Precision Motors

39.3%

(39.1%)

HDD Motors

18.1%

pressing machines, chip mounters, measuring equipment,

power transmission equipment, factory automation system, card readers

Automotive, Appliance, Commercial and Industrial

45.9%

Appliance Commercial Industrial

23.2%

(25.4%)

895.4B

Auto 22.7%

(18.8%)

(19.7%)

21.2%

(19.4%)

Other Small Motors

Optical disk drive motors, OA equipment motors, polygon scanner motors, MPU cooling fans,

game machine fans, PC/communications equipment fans, home appliance fans, automobile fans, vibration motors, brushed motors,

Products

(44.2%) stepping motors,

actuator units

15

Financial Highlights

(Billions of Yen) (Billions of Yen)

Sales Operating Income Operating Income Ratio (%)

240.2249.3

264.3

274.6

285.0

302.3308.0

Consolidated Income Before Tax Consolidated Net Income

26.9

25.0

28.8

30.2

30.7

31.1

32.2

24.5

32.3

29.8

27.1 25.8

23.8

31.0 31.0

23.8 23.3

10.4%

10.8% 10.9% 11.0%

10.8%

10.3%

10.4%

17.6

19.1

21.3

18.0

1Q/FY14 2Q 3Q 4Q 1Q/FY15 2Q 3Q

1Q/FY14 2Q 3Q 4Q 1Q/FY15 2Q 3Q

(Yen/share) (Billions of Yen)

Operating Activities Investment Activities Free Cash Flow

Year-end Interim Consolidated EPS (Full-year)

303 (Target)

113.4

272

207

40.0

40.0 (Target)

56.1

15.7

34.1

27.5

22.530.0

40.0

-40.3

-79.3

FY13 FY14 FY15

3Q/FY14 (Apr-Dec) 3Q/FY15 (Apr-Dec)

*Please refer to Notes on page 13. 16

Product Group Overview

(Billions of Yen) (Billions of Yen)

Sales Operating Income

*Please refer to Notes on page 13.

Sales Operating Income

15.6

15.1

16.7

15.7

17.7

18.1

19.1

110.2

108.1

114.9

126.7

137.3

138.9

134.8

89.9100.4

104.8

102.9

104.1

118.5

129.6

8.6

8.6

9.3

10.0

10.8 ＊ 10.6 ＊

11.3

FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q

FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q

(Billions of Yen) (Billions of Yen)

Sales Operating Income

Sales Operating Income

22.322.7

26.1

27.7

4.7

26.7

26.9

25.6

16.2

16.3

16.7

15.8

15.8

16.7

16.7

3.8

2.8

4.9

4.1 4.1

3.8

1.1

1.3

1.3

1.4

1.6

2.0

1.8

FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q

FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q 17

Mid-Term Strategic Goal Vision 2020

This section includes forward-looking statements. See disclaimer on page 2 of this presentation.

18

FY2020 New Mid-Term Strategic Target

Continuous pursuit of profit & strong growth

1. Target for consolidated net sales: 2 trillion yen (including new M&A of approx. 500 billion yen)

2. Sales target for automotive: 700 billion to 1 trillion yen

3. Target for consolidated operating income ratio: 15%

4. Target for ROE: 18%

   (Assuming shareholders' equity ratio of 60%)

5. Five regional HQ management

This slide includes forward-looking statements. See disclaimer on page 2 of this presentation.

19

Targets for Net Sales and Operating Income Ratio

Aiming for both sales growth (organic + M&A) and profitability enhancement

(Net Sales in Trillions of Yen) (Operating Income Ratio,%)

2.5 15% 15

2

1.5

13.9%

13.7%

10.7% 10.8%

9.7%

11.3%

Organic Growth + M&A (CAGR approx. 12%)

Net Sales

2T

New M&A Approx.500B

10

Net Sales

Net Sales

1.15T

Organic growth

1

0.5

Net Sales

571.6B

Net Sales

676.0B Net Sales

682.3B

Net Sales

709.3B

Net Sales

875.1B

1. T (CAGR approx. 7%)

   
   

   5

   
   

   2.5%

   
   

   0 0

   FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY20

   Structural

   (Forecast)

   (Target)

   Reform This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 20

   Pursuing Both Strong Growth with Profit and Financial Soundness

   Targeting operating income ratio of 15% and ROE of 18% while sustaining and improving financial soundness

   (The average ROE during the ten years through FY2014 was 12.2%)

   (Billions of Yen)

   1,500

   Shareholders' Equity (LHS)

   ROE (RHS)

   Positive net cash by March 2016 in sight

   60.0%

   (%)

   65%

   Shareholders' Equity Ratio (RHS)

   Operating Income Ratio (RHS)

   60%

   1,200

   49.1%

   47.5%

   Shareholders' equity ratio

   surpassed 50% one year ahead of plan

   54.9%

   Equity Ratio

   55%

   900 42.3%

   46.2%

   41.3%

   44.4%

   745.0

   The three elements for ROE improvement

   • Net profit on sales

   • Total asset turnover

   • Financial leverage

50%

45%

600

300

9.2%

16.3%

15.0%

13.9% 13.7%

11.2%

415.7

518.0

12.1%

12.0%

ROE

Operating Income Ratio

18%

15%

20%

15%

10%

8.9%

297.1

0

340.3

355.3

10.7%

370.2

2.5%

2.0%

10.8%

9.7%

5%

0%

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY20

Lehman Crisis

This slide includes forward-looking statements. See disclaimer on page 2 of this presentation.

Structural Reform

(Target)

21

Japan Credit Rating Agency, Ltd. (JCR) upgraded our long-term issuer rating by one notch from A+ to AA- as of Oct. 1, 2014.

Business Structure to Support Profitable Global Growth

Matrix management structure with five regional HQ

Strengthening bases for growth strategy

• Global organic growth

• Accelerating post merger integration of

Small

Management function by business

Appliance,

Other

Precision Auto-

Commercial

Product

overseas acquisitions

Motors motive & Industrial Groups

1. China

   Regional HQ began operating in Jan 2012

2. Asia

   From individual management by country to regional integration

3. Americas

   Regional HQ began operating in Oct 2014

4. EMEA*

   Reorganization registration filed in Mar 2015

   Regional corporate function by region and function

5. Japan

   
   

6. China

   
   

7. Asia

   (TBD)

   
   

8. Americas

   
   

9. EMEA




Roles of regional Headquarters

1. Improve management quality

   (Governance, Compliance, Internal Control)

2. Improve management efficiency

   (High quality & cost effective shared services)

3. Proactive PMI support for acquired companies




* EMEA: Europe, the Middle East and Africa

22

Targets for Net Sales in FY2020 by Category




Accelerate topline growth with focused allocation of management resources

in fast growing areas driven by technological innovations




(Sales: Billions of Yen)




FY2020

Net Sales: 2 Trillion Yen (Target)




700B

to 1 T







FY2010

Net Sales: 676.0 Billion Yen




(Sales: Billions of Yen)




FY2015

Net Sales: 1.15 Trillion Yen (Forecast)




(Sales: Billions of Yen)




400

to 600

New M&A 500




400

to 600

400 Key Growth Areas




348.4




Small Precision




94.2




164.2




Small Precision




300 280




170




Small Precision




Automotive




200

to 300

MotorsAppliance,

Commercial

& Industrial Other

Motors AutomotiveAppliance,

Commercial

Motors

Appliance, Commercial

69.2




Automotive

Product

Groups

& Industrial Other

Product Groups

& Industrial

Other

Product Groups




This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 23




FY2015 Sales and Profitability Targets by Product Category




Small Precision Motors Automotive




(Sales in Billions of Yen)

(Operating Income in Billions of Yen)




(Sales in Billions of Yen) (Operating Income in Billions of Yen)

600 120

400

1.0T

Yen




300.0

120




331.4

319.7

300




54.2




362.5




56.7

398.0




63.1

400.0




400

to 60

600

200

0

84.3 86.7

3.3

119.2

6.7

197.0

16.4




700 60

to

1 T




0

FY11 FY12 FY13 FY14 FY15 FY20

0 22.6 0

FY11 FY12 FY13 FY14 FY15 FY20

(Forecast) (Target)

-200

-2.0

(Forecast) (Target)




-60

Other

P

r

oduct

G

r

oups

Appliance, Commercial & Industrial Other ProductGroups

(Operating Income in (Operating Income in

(Sales in Billions of Yen) Billions of Yen) (Sales in Billions of Yen) Billions ofYen)

600 60

300 40







300




124.2




161.8




4.6




15.5




20.1




263.0280.0




400 30

to

600




150




0




142.4




14.9




141.1

167.4170.4




21.9

13.9

170.0




200

to 20

300

0

6.1

0

226.1

FY11 FY12 FY13 FY14 FY15 FY20

-20

-150

0 -0.6 (Forecast) (Target)

FY11	FY12	FY13	FY14	FY15	FY20
(Forecast)	(Target)

This slide includes forward-looking statements. See disclaimer on page 2 of this presentation. 24