Nidec : ESG Small Meeting Presentation Material

NIDEC CORPORATION
ESG Small Meeting
Presentation Material
EMEA Tel: [phone]	E-mail: [e-mail]
U.S.	Tel: [phone]	E-mail: [e-mail]
Japan	Tel: [phone]	E-mail: [e-mail]

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.

1/16

Sales by Product Group (FY2019)

Services, music box products	0.3%
(0.3%)

Others

Parenthetic percentages represent FY2018 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 Products

9.8%

(11.1%)

36.7%

(33.6%)

3.9%

(4.9%)

HDD Motors

10.2%

(12.1%)

17.4%

(17.8%)

1.5348T

21.7%

(20.2%)

Small Precision Motors

27.6%

(29.9%)

Other Small MotorsOptical 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

Products

2/16

Consolidated Quarterly Net Sales and Operating Profit

Continuing WPR4 cost restructuring and preparing for demand recovery

(Net Sales in

(Operating Profit in

Billions of Yen)

Billions of Yen)

600

60

Net Sales (LHS)

Operating Profit (RHS)

500

WPR3

50

WPR4

400

40

300

30

WPR1

WPR2

200

20

Earthquake

100

Disaster

10

Thai

Lehman Crisis

Floods

0

0

Q1Q2Q3Q4Q1 Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 Q3Q4Q1Q2Q3Q4Q1 Q2Q3Q4 Q1Q2Q3Q4 Q1Q2Q3 Q4Q1Q2Q3Q4Q1

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19 FY20

-25.4

Structural Reform

3/16

New 5 Big Waves in a Post-Pandemic World

Nidec's business solutions that solve the common problems of humankind

Vapor chamber Heat pipe

	Traction motor Traction motor system
	ADAS related product	（E-Axle）
Fan5G & Thermal solutions
Decarbonization
（Keywords: Tactile sense, image stabilization and heat ventilation module)
(Keywords: Drive/Turn/Brake, safety/comfort and thermal management）

Reducer Motor for drones

Automated guided vehicle

Manpower saving

(Keywords: Industrial robots, servicing robots and logistics)

Nearline HDD motor

Digital data explosion

Power saving

Home appliance motor

(Keywords: High speed / large data, GAFA* and "Stay Home")	(Keywords: Sterilization, hygiene and "Stay Home")
Refrigerator compressor	4/16
* GAFA: Google, Apple, Facebook and Amazon

Demand for Teleworking

Ultra thin/ultra small fan motor "UltraFlo FDB (UFF)" supports the solid demand for teleworking

(Million units)

6

Record high

5

4

3

2

1

0

Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1
		FY18			FY19			FY20

5/16

• Small Precision Motors: Other COVID-19-related New Businesses

	Hygiene
Mask fan	Medical respirator
	Image of a medical circulator
		Product
		overview

	A thin, low-vibration UFF		Applied use of an
	used to assist a mask wearer
		automotive seat fan
	to breathe

Teleworking

Increasing demand for laptop PCs

The pace of PC

replacement demand accelerating due to a growing number of people teleworking

Increasing use of web-conferencing and

video-viewing systems

Web-conferencingVideo-viewing	Cloud service operators
services	services

Increase in

demand

for servers

6/16

Automotive: Sales of Vehicles with Nidec's E-Axle

The total number of vehicles using our E-Axle (traction motor system) exceeds 58K units.

E-Axle>

(Source: MarkLines)

(Units)

Numbers are in

gradual recovery trend

from March after

bottoming in February

Orders for Nidec's E-Axle :

As of Q4/FY2019 account closing:		As of Q1/FY2020 account closing:
7 customers			15 customers
China:	Europe:	Americas:		China:	Europe:	Americas:	Japan:
5	1	1		12	1	1	1
E-Axle as of July 1st, 2020>
		(In order of launch date)
		OEM				Model
GAC New Energy Automobile				Aion S
GAC Toyota Motor				iA5
GAC New Energy Automobile				Aion LX
GAC NIO New Energy Automobile		HYCAN 007
Technology
Geely Automobile			Geometry C
GAC New Energy Automobile				Aion V
				7/16

Automotive: Launch of a New EV Model with Nidec's E-Axle (1)

Geely Automobile's Geometry C adopts Nidec's E-Axle

Geely Automobile's Geometry C

(Reference) https://www.nidec.com/en/product/news/2020/news0527-01/

 Geely Automobile is actively promoting EVs and setting up a joint venture for developing Smart EV in 2020 with Daimler group.

 New model EV, Geometry C, is the second model to be added to the high-end EV lineup by Geely Automobile, capable of achieving a cruising range of more than 500 km, and great competitiveness is expected as an automatic parking system and the latest intelligent network technology compatible with 5G are installed.

 Nidec's "E-Axle Ni150Ex" installed in Geometry C is a model that has evolved from the E-Axle that started mass production in April 2019. It contributes greatly to improving the power performance, electricity cost performance, sound and vibration performance and reducing vehicle weight of Geometry C by applying Nidec's unique technologies. (eg; circuit designs, the light, thin, short and small motor structure utilizing the permanent magnet and unique motor oil cooling structure, and the adoption of the second generation inverter.)

8/16

Automotive: Launch of a New EV Model with Nidec's E-Axle (2)

Nidec's E-Axle Drives GAC New Energy Automobile's New EV "Aion V"

 GAC New Energy Automobile Co., Ltd. (GAC NE) is a brand

	established in 2017 that manufactures electric vehicles under the
	umbrella of China's GAC Group. GAC NE has grown rapidly
	and secured a prominent position in the market as the first car in
	the Aion series-AionS-has constantly ranked among the
	best-selling electric vehicles in China since its launch in May
	2019.
	 The newly launched Aion V-the third model in the Aion
	series-is based on GAC NE's aluminum EV platform GEP2.0.
	The car incorporates a number of new technologies such as 5G
	connectivity, automatic parking and level 3 autonomous driving
	based on high-accuracy maps.
GAC New Energy Automobile's Aion V	 Nidec's Ni150Ex E-Axle that powers the Aion V has been
adopted by 6 different electric vehicle models so far.
(Reference) https://www.nidec.com/en/product/news/2020/news0709-01/
9/16

Traction Motor : Setting Up 10 Million Unit Capacity for FY2030

Preparing for a 10 million unit production in FY2030 by solidifying production and development

to capture the rapid increase of demands

(Million units)
10		[0→0.1]	[0.1→1]	[1→10+]
	Focusing on productization
	Global No.1 share	Establishing 10M capacity
8	and product launch

*Aggregates of E-Axle and HEV motors

<An enlarged view of the left graph from FY18 to FY23>

6	(Million units)

4

Rapid expansion

2.5

2

2

1.5

0

1

0.5

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

FY29

FY30

0

Project management with 10 million unit production in FY2030 in sight

Developing next

Allocation of capacity

Quality and cost

Capacity

generation E-Axle

Choosing the optimum

control

Reducing equipment costs

Accelerating modularization

production locations by

Proactively promoting in-

by collaborating within the

and

achieving low cost,

looking three to five years

house production to control

group and developing local

high efficiency, and further

ahead

quality and reducing BOM

suppliers

10/16

miniaturization

cost

Battery Energy Storage Systems that Support the Use of Renewable Energies

BESS (Battery Energy Storage System)	Micro-grid system in Chile
system in Germany

Power conversion system essential for BESS

Photovoltaic power generation plant in a suburb of Ciminna, Sicily, Italy

11/16

Nidec's Product Line-ups Expanding into Robotics

Service/Communication robots	Commercial/Industrial robots	Logistics/Agricultural fields
Wide angle optical	Tactile device			Drone motor	Automated guided vehicle
image stabilizer camera		Wafer/ LCD transfer robot
module (TiltAC)		Reducer series		S-CART
Wide angle camera module					Aperture unit for drone	Motor for pallet truck
			LCD panel
		Coreless motor	handling robot
				Encoder
TiltAC Module
			Universal AC/
			servo drive	Pressure sensor
		Stepping motor			Motor for	Motor for electric
Ultra-flat geared actuator					warehouse conveyor	counter-balance forklift
			Robot controller	Robot module	Motor for electric scissor lift
		Brush motor
						Motor for construction/
Motor for wheel drive	Reducer	DC servo module	AC servo motor	Frameless motor	Geared servo motor	mining/ agriculture

12/16

CSR Vision 2020

13/16

• ESG Initiatives

Environment Climate change initiative SMART2030 taking hold

SMART2030 （Sustainable Manufacturing And Resilient Tomorrow）

A 30% cut in

operational GHGs* * Key

• More energy-efficient operations

( LED lighting for new facilities, energy-saving air conditioning, AI-backed manufacturing processes)

by FY2030

Steps

 Using renewable sources of energy

(from FY2017 levels)

*GHG: Greenhouse Gas

- Draw renewable electricity directly from power suppliers

- Purchase certified renewable electricity using a Green Power Certification System

- Generate renewable electricity using solar panels, etc.

Society D&I** Promotion Office launched（April 2020）

**D&I: Diversity & Inclusion

Building strength by	Key
leveraging the power	Roles
of multiple points of
view

• Attain productive development based on gender equality and work-life balance by:
• • helping employees enhance work efficiency, improve time management skills, and boost health
  • creating and maintaining career development framework
  • staying committed to the predetermined gender diversity target of women holding at least 8% of managerial positions

Corporate Governance Transition to a company with audit and supervisory committee
		5 out of 9 Board seats to be held by external members (including 2 women) upon shareholder approval.
	Key		- Board members		- Board members not serving on Audit and
Reinforcing the Board's	Changes			Supervisory Committee
oversight capability		From	(Internal: 6, External: 2)	To	(Internal: 2. External: 2)
	- Audit & Supervisory Board members
				- Board members serving on Audit and
			(Internal: 2, External: 3)
				Supervisory Committee
				14/16
					(Internal: 2, External: 3)

Nidec's Focus on Employee Health

Aiming to enhance corporate value further through productivity reform by enhancing employees' health, motivating and encouraging employees

Nidec's declaration of health-oriented management

Nidec Group considers its employees' health and satisfaction as its important source of management, and promotes measures to realize "health-oriented management".

Our employees' health is invaluable to themselves and their families. We also consider that our employees challenging proactively and continuing to play an active part will lead to materializing "a company that will last more than 100 years". We declare to establish "health-oriented management" as the foundations to support the next generation society together with our employees and their families, and aim to become a company where each member continues to give their best performance with passion and enthusiasm.

Founder, Chairman and CEO Shigenobu Nagamori

• Health Promotion Committee has been established to facilitate liaising with the management, the corporate health insurance association, industrial doctors and employees.
• In light of reducing the risk of COVID-19 infection, phased reduction of smoking hours is under way and total smoking ban on Nidec's premises is expected by the end of FY2021.
• Further improvements and measures for health promotion will be implemented through analyses of our employees' health conditions and issues.

15/16

Evaluation by Society

*Eruboshi certification: A certification by Japan's Ministry of Health, Labour and Welfare for companies with an excellent track record of activities and status to promote the empowering of women.

*Nadeshiko brand: A brand given by Japan's Ministry of
Economy, Trade and Industry and Tokyo Stock Exchange to	16/16
companies with an excellent track record of empowering women.