Nidec: Fiscal 3Q12 Financial Results

(in ¥ billions)	3Q11	3Q12	9 mo. 11	9 mo. 12
Revenues	178.7	158.0	515.0	519.7
*Growth*		-12%		1%
Net income (loss)	13.5	9.1	40.4	31.7

Nidec Corporation
was severely affected by the flooding in Thailand as it caused our
manufacturing facilities in Thailand, which represent more than 60% of
our production capacity with respect to small precision motors for HDDs,
our core product line, to temporarily suspend operations.

Recovery From Thai Floods

nidec_recovery_from_thai_floods_540

We promptly launched our recovery efforts in Thailand while augmenting
the production capacity of, and transferring a portion of the
manufacturing operations in Thailand to our manufacturing facilities in
the Philippines and China based on a new risk diversification policy. As
a result, the total number of units of small precision motors for HDDs
manufactured in the three months ended December 31, 2011 was
approximately 70% of that in the three months ended September 30, 2011,
and the total number of units of such motors sold in the three months
ended December 31, 2011 was approximately 80% of that in the three
months ended September 30, 2011. (The total number of units of small
precision motors for HDDs manufactured in the month of December 2011 was
approximately 90% of our record high for the month of December.)

HDD Motors
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HDD Demand Expected to Rebound in FY2012
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In this difficult business environment, our operating income and net
income attributable to Nidec decreased approximately 35% and 12%
respectively for the three months ended December 31, 2011 compared to
the three months ended September 30, 2011, and our diluted earning per
share decreased approximately 11% to ¥62.30 between the same periods.
Our operating income and net income attributable to Nidec decreased
approximately 28% and 22% respectively for the nine months ended
December 31, 2011 compared to the nine months ended September 2010, and
our diluted earning per share decreased approximately 24% to ¥214.87
between the same periods.

Consolidated Operating Results
for Nine Months Ended December 31, 2011
Consolidated net sales increased ¥4,706 million, or 0.9%, to ¥519,680
million for this nine-month period compared to the previous nine-month
period. Operating income decreased ¥20,875 million, or 28.4%, to ¥52,691
million for this nine-month period compared to the previous nine-month
period. Our operating income ratio for this nine-month period exceeded
10% at 10.1%. The average exchange rate between the U.S. dollar and the
Japanese yen for this nine-month period was ¥79.01 to the dollar, which
reflects the appreciation of the Japanese yen against the U.S. dollar of
approximately ¥7.84, or 9%, compared to the previous nine-month period.
The appreciation of the Japanese yen and other Asian currencies against
the U.S. dollar had a negative effect on our net sales and operating
income of approximately ¥28,500 million and ¥6,800 million respectively
for this nine-month period compared to the previous nine-month period.

Income from continuing operations before income taxes decreased ¥14,266
million, or 23.3%, to ¥47,054 million for this nine-month period
compared to the previous nine-month period. An approximately ¥7,200
million decrease in foreign exchange loss (mainly relating to
translation of foreign currency-denominated assets) to approximately
¥4,200 million for this nine-month period from approximately ¥11,500
million for the previous nine-month period had a positive effect on our
income from continuing operations before income taxes for this
nine-month period.

Net income attributable to Nidec decreased ¥8,819 million, or 21.8%, to
¥31,654 million for this nine-month period compared to the previous
nine-month period.

Operating Results for Small Precision Motors
for Nine-Month Period
Net sales of small precision motors decreased approximately ¥18,100 million, or 7%,
to ¥231,523 million for this nine-month period compared to the previous
nine-month period. This was mainly due to the appreciation of the
Japanese yen and other Asian currencies against the U.S. dollar and the
negative impact of the flooding in Thailand, more than offsetting the
positive effect of the sales of approximately ¥8,600 million at Nidec
Seimitsu Corporation, which was newly consolidated on July 1, 2011.

The appreciation of the Japanese yen and other Asian currencies against
the U.S. dollar had a negative effect on our sales of small precision
motors of approximately ¥20,700 million for this nine-month period
compared to the previous nine-month period.

The number of units sold and sales of small precision motors for HDDs
decreased approximately 5% and 14% for this nine-month period compared
to the previous nine-month period respectively. This decrease was
mainly due to the negative impact of the flooding in Thailand on our
manufacturing facilities and supply chains for small precision motors
for HDDs.

Average unit prices of spindle motors decreased approximately 1%
on a U.S. dollar basis and 10% on a Japanese yen basis for this
nine-month period compared to the previous nine-month period, reflecting
the 9% appreciation of the Japanese yen against the U.S. dollar. The
number of units sold of spindle motors for 2.5-inch HDDs increased
approximately 1% for this nine-month period compared to the previous
nine-month period, although the number of units sold of spindle motors
for 3.5-inch HDDs decreased approximately 11% for this nine-month period
compared to the previous nine-month period. Sales of spindle motors for
2.5-inch and 3.5-inch HDDs decreased approximately 11% and 17%,
respectively, for this nine-month period compared to the previous
nine-month period, reflecting the negative impact of the appreciation of
the Japanese yen against the U.S. dollar.

Operating income of small precision motors decreased approximately
¥12,100 million, or 25%, to ¥36,344 million for this nine-month period
compared to the previous nine-month period. This was mainly due to the
appreciation of the Japanese yen against the U.S. dollar and the adverse
effects of the flooding in Thailand. The appreciation of the Japanese
yen against the U.S. dollar had a negative impact on operating income of
small precision motors of approximately ¥6,500 million for this
nine-month period.

Consolidated Operating Results
for the Three Months Ended December 31, 2011
Consolidated net sales decreased ¥24,643 million, or 13.5%, to ¥157,982
million for this 3Q compared to this 2Q. Our operating income decreased
¥7,175 million, or 35.3%, to ¥13,147 million for this 3Q compared to
this 2Q Operating income ratio was 8.3% for this 3Q. This decrease was
mainly due to the negative effects of the flooding in Thailand on our
small precision motors, general motors and electronic and optical
components product categories. However, we estimated as of December 31,
2011, that insurance payments to be received under the property damage
insurance policies we hold would exceed the loss relating to the fixed
assets and inventories, and the amount of the insurance payments
estimated as of December 31, 2011, exceeding the loss was recorded as
part of operating income presented in our consolidated income statements
for the three months ended December 31, 2011.

The average exchange rate between the Japanese yen and the U.S. dollar
for this 3Q was ¥77.41 to the dollar, an appreciation of the Japanese
yen against the U.S. dollar of approximately ¥0.48 compared to this 2Q.
The average exchange rate between the Japanese yen and the Euro for this
3Q was ¥104.33 to the Euro, an appreciation of the Japanese yen against
the Euro of approximately ¥5.86, or 5%, compared to this 2Q. The
appreciation of the Japanese yen against the U.S. dollars and Euro had a
negative impact on our net sales and operating income of approximately
¥1,600 million and ¥400 million, respectively, for this 3Q compared to
this 2Q.

Income from continuing operations before income taxes decreased ¥1,821
million, or 11.6%, to ¥13,831 million for this 3Q compared to this 2Q.
We recorded foreign exchange gains of approximately ¥900 million for
this 3Q, compared to a foreign exchange loss of approximately ¥4,000
million for this 2Q. Net income attributable to Nidec also decreased
¥1,194 million, or 11.6%, to ¥9,125 million for this 3Q compared to this
2Q.

Operating Results for Small Precision Motors for this 3Q
Net sales of small precision motors decreased approximately ¥11,000
million, or 13%, to ¥72,276 million for this 3Q compared to this 2Q. The
number of units sold and sales of spindle motors for HDDs decreased
approximately 20% and 18% respectively, for this 3Q compared to this 2Q.
This decrease was mainly due to the disruptions to our manufacturing
facilities and supply chains caused by the flooding in Thailand. Average unit prices of spindle motors increased approximately 2% on a Japanese yen basis and 3% on a U.S. dollar basis respectively for this 3Q compared to this 2Q, reflecting the appreciation of the Japanese yen against the U.S. dollar. The
number of units sold of spindle motors for 2.5-inch HDDs and 3.5-inch
HDDs decreased approximately 24% and 15% respectively for this 3Q
compared to this 2Q.

Net sales of other small precision brushless DC motors decreased
approximately 10% for this 3Q compared to this 2Q, primarily due to the
supply chain disruptions caused by the flooding in Thailand on sales of
other small precision brushless DC motors for optical drives at Nidec
and its direct-line subsidiaries and sales of stepping motors at Nidec
Sankyo. With regard to Nidec and its direct-line subsidiaries, the
number of units sold and sales of other small precision brushless DC
motors decreased approximately 20% and 12% for this 3Q compared to this
2Q, respectively. Average unit prices increased approximately 11% on a
U.S. dollar basis for this 3Q compared to this 2Q.

Forecasts of Consolidated Results
for Fiscal Year Ending March 31, 2012

Net sales ¥700,000 million (up 1.7% from the previous fiscal year)
Operating income ¥70,000 million (down 22.7% from the previous fiscal year)
Income from continuing operations before income taxes ¥62,000 million (down 22.0% from the previous fiscal year)
Net income attributable to Nidec ¥40,000 million (down 23.6% from the previous fiscal year)