Nidec: Fiscal 2FQ24 Financial Results

Nidec Corp. announced its financial results for the 6 months ended September 30, 2024.

Overview of Operating Results for the 6 Months Ended September 30, 2024
On April 1, 2024, Mitsuya Kishida assumed the position of president, marking the start of a new management system.

Under the slogan of “One Nidec,” the company is strongly promoting various measures, including the integration of technologies and human resources on a global basis, with the aim of realizing group-wide integrated management, that is, group-wide optimal management that achieves growth while generating synergies among group companies.

About product group, in the small precision motors, demand for HDD motors has recovered mainly for near-line applications.

In the area of water-cooling systems for AI servers which are expanding rapidly, the firm prepares a supply system for strategic products related to high-value-added water cooling modules including those for the next-gen GPU servers toward the latter half of FY24. It accelerates the shift to a highly profitable business portfolio.

In the automotive products, it swiftly shifted its strategy to put first priority on its profitability in FY23 to respond to the slowdown of the battery EV market expansion and fierce price competition, and the battery EV related business turned profitable in the Chinese market in 2FQ24. It is continuously further strengthening cooperation with the joint venture partner, and also focusing on component supply with its technical capabilities and cost competitiveness which were cultivated in the fierce market.

It is also focusing on product development in anticipation of global trend toward advanced safety equipment and advanced electrification for autonomous driving, and rising demand for HEVs.

For the appliance, commercial and industrial products, demand for power generators, which are essential to data centers, is also growing rapidly. The company is working to expand production capacity to meet this demand. It also expects significant growth in battery energy storage systems (BESS) as demand related to green innovation expands. For the machinery, business is in the final stage of a downturn in the business cycle. The firm is working to strengthen our business promotion system by integrating and unifying the management and production systems of each group company so that we can respond quickly to the timing of a shift to a recovery phase.

As a result of the group’s concerted efforts to strengthen three news activity (exploring new markets, developing new products, and acquiring new customers) under the new management system, the vendor is renewed the highest record in net sales and operating profit in the interim consolidated accounting period.

Under these circumstances, by clarifying its “medium- to long-term direction,” it aims to become a global “first-class company” that will continue to grow for more than 100 years. As a “Second Foundation,” it will enhance its corporate value through growth accompanied by “quality,” while inheriting our unique strengths.

2. Consolidated Operating Results
Consolidated net sales from continuing operations increased 11.8% to ¥1,293,811 million for this 6-month period compared to the same period of the previous year, and we renewed the highest record of the interim consolidated accounting periods.

Each business area and market progresses steadily. Sales of spindle motors for HDDs in the small precision motors has recovered, mainly for near-line applications, and net sales increased in new fields such as water-cooling modules for rapidly growing AI data centers. In addition, net sales expanded due to the consolidation of firm’s PSA emotors, the joint venture between Nidec and Stellantis, in automotive products.

Operating profit increased 4.9% to ¥121,000 million for this 6-month period compared to the same period of the previous year, and the firm renewed the highest record of the interim consolidated accounting periods due to the shift to a highly profitable business portfolio in the small precision motors by introducing high-value-added water-cooling modules and the gain on step acquisition regarding the consolidation of Nidec PSA emotors, despite the influence of cost burden as a result of rationalization of dispersed production bases and integrated production systems in the appliance, commercial and industrial products and the machinery to improve profitability after the latter half of FY24.

Profit before income taxes decreased 30.9% to ¥100,174 million, including a negative effect of the fluctuations of the foreign currency exchange rates by approximately ¥27,300 million resulting from rapidly appreciation of yen in 2FQ24, profit for the period from continuing operations decreased 30.9% to ¥73,628 million, and profit attributable to owners of the parent decreased 28.5% to ¥75,572 million compared to 2FQ23.

The average exchange rate between the Japanese yen and the US $ for this 6-month period was ¥152.63 to the US $, which reflected an approximately 8% depreciation of the Japanese yen vs. the US $, compared to 2FH23. The average exchange rate between the Japanese yen and the Euro for 2FH24 was ¥165.95 to the Euro, which reflected an approximately 8% depreciation of the Japanese yen vs. the Euro, compared to the same period of the previous year.

Effect of the fluctuations of the foreign currency exchange rates to net sales and operating profit for this six-month period is as follows.

• Net sales: Positive effect by approximately ¥76,900 million compared to the same period of the previous year.
• Operating profit: Positive effect by approximately ¥7,900 million compared to the same period of the previous year.