Nidec : Presentation materials

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Nidec Corporation

Third Quarter Fiscal 2022 Results

Three and Nine Months Ended December 31, 2022

January 24, 2023

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.

The first slide features NATS-1000 launched by Nidec-Read.NATS-1000 is a fully automatic inline semiconductor inspection equipment to test the functions of automotive IGBT (insulated gate bipolar transistor) /SiC (silicon carbide) modules. Nidec uses NATS-1000 to inspect semiconductors supplied to Nidec Group, including those for its traction motor system E-Axle.

Please refer to Nidec's website for more information. https://www.nidec.com/en/product/news/2022/news1223-01/

2

Consolidated Profit/Loss	This slide includes forward-looking statements. See Disclaimer on Page 2.
	Millions of Yen, except	Q3/FY2021	Q3/FY2022		FY2022
	for percentages, EPS,	Change
	(Apr-Dec)	(Apr-Dec)	Forecast
	and FX rates
	Net sales	1,407,210	1,699,747	+20.8%	2,200,000
	Operating profit	133,487	124,404	-6.8%	110,000
	Operating profit ratio	9.5%	7.3%	-	5.0%
	Profit before	129,410	141,944	+9.7%	120,000
	income taxes
	Profit attributable to	99,312	104,077	+4.8%	60,000
	owners of the parent
	EPS (Yen)	169.73	180.72	+6.5%	104.24
	FX rate (Yen/US$)				Assumed for Q4:
	Average:	111.10	136.51	+22.9%	Yen/US$: 110
	Term end:	115.02	132.70	+15.4%	Yen/Euro: 125

Note: Based on the current forecast of sales volume, every one yen appreciation or depreciation against the U.S. dollar and the euro for FY2022 is estimated to have
an annualized impact of 10.0 billion yen and 1.9 billion yen on net sales, respectively, and 1.1 billion yen and 0.4 billion yen on operating profit, respectively.	3

Summary of Q3/FY2022

• Nine months net sales stood at record high of ¥1,699.7 billion, 20.8% higher Y/Y.
• Nine months operating profit decreased 6.8% Y/Y to ¥124.4 billion.
• Nine months profit before income taxes and profit attributable to owners of the parent increased 9.7% Y/Y to ¥141.9 billion, 4.8% Y/Y to ¥104.1 billion, respectively. Both stood at record high.
• Implementing WPR-X, the drastic reform on profitability, to tackle recent deteriorations of market environments with aims to reduce the fixed cost significantly and to make a V-shapedrecovery in FY2023.

4

Revision to FY2022 Annual Forecasts

This slide includes forward-looking statements. See Disclaimer on Page 2.

Revision to FY2022 annual forecasts based on Q3 results and Q4 demand outlook

Millions of Yen,	FY22 Forecasts
except for
（As of Apr. 21,
percentages, EPS and
2022)
FX rates
Net sales	2,100,000
Operating profit	210,000
Operating profit ratio	10.0%
Profit before	206,000
income taxes
Profit attributable to	165,000
owners of the parent
EPS (Yen)	286.65
FX rate (Yen/US$)	110.00
(Assumed for full-year)

FY22 Forecasts

（As of Jan. 24,

2023)

2,200,000

110,000

5.0%

120,000

60,000

104.24

110.00

(Assumed for Q4)

1H/FY22

1,130,767

96,368

8.5%

118,375

86,649

150.31

133.97

(Average rate)

Q3/FY22

(Oct.-Dec. 2022)

568,980

28,036

4.9%

23,569

17,428

30.32

141.59

(Average rate)

Q4/FY22

(Jan.-Mar. 2023)

(Forecast)

500,253

-14,404

-2.9%

-21,944

-44,077

-76.39

110.00

(Assumed for Q4)

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Year-on-Year Changes (Nine Months Ended Dec. 2022)

(Billions of Yen)

				+221.3		+56.7		+56.1	+8.5
				-41.3	-8.8
		1,407.2							1,699.7
		Apr-Dec/FY21	Exchange	Small Precision	Automotive	Appliance,	Machinery	Electronic	Apr-Dec/FY22
				Rate	Motors	Products	Commercial		and Optical
							and Industrial		Components
				Products		and Others

(Billions of Yen)

+20.7

-14.5	+7.5	+4.9

-11.2	-3.1	-1.9
		-11.6

133.5

124.4

Apr-Dec/FY21 Exchange	Structural	Small Precision	Automotive	Appliance,	Machinery	Electronic	Eliminations/	Apr-Dec/FY22
Commercial	and Optical
Rate	Reform	Motors	Products		Corporate
and Industrial		Components	6
	Expenses
			Products		and Others

Quarter-on-Quarter Changes (Three Months Ended Dec. 2022)
(Billions of Yen)	+16.2
							+0.2
			-9.2		-9.8	-7.7	-11.2
590.4											569.0
Jul-Sep/FY22	Exchange	Small Precision	Automotive	Appliance,	Machinery	Electronic	Oct-Dec/FY22
	Rate		Motors		Products	Commercial		and Optical
						and Industrial		Components
					Products		and Others
(Billions of Yen)	+0.9
		-11.0				+0.3		+0.2
51.7			-5.6
			-3.8		-4.1
	Q2 Q3				-0.5
											28.0
Jul-Sep/FY22	Exchange	Structural	Small Precision	Automotive	Appliance,	Machinery	Electronic	Eliminations/	Oct-Dec/FY22
Commercial	and Optical
	Rate	Reform	Motors		Products		Corporate
		and Industrial		Components	7
		Expenses
					Products		and Others

Starting WPR-X	This slide includes forward-looking statements. See Disclaimer on Page 2.

Started WPR-X, the drastic reform on profitability amid adverse market conditions in the second half of FY2022

	Current market situation
	 HDD Motors:
	(1) HDD market (TAM*) is shrinking rapidly.
	CY21:259M units→CY22:172M units
Small	(decrease by 34% Y/Y)
(2) Rapid inventory adjustment, especially
Precision
for nearline HDD in Q3, pressurized
Motors
profitability in the short term
	 Other Small Precision Motors:
	Rapid inventory adjustment in IT area,
	especially data center related.
	 Impact of customers' factories shutdown due
	to China's zero-corona policy.
Automotive	 Due to spread of infections caused by
	relaxation of the policy, the utilization rate of
	our factories have also decreased.
Appliance,	 Loss of COVID-19 special demand mainly in
the appliance area throughout the world.
Commercial
 The European market is affected by the
&
impact of prolonged Russian invasion of
Industrial
Ukraine.

(Sales: Billions of Yen)	(Operating profit ratio: %)
800	20%

Net sales (LHS)

		Operating profit (RHS)
600							590.4	569.0			15%
					540.4
					511.0
				496.5				500.3
			463.2
433.2	433.1	447.5
400									WPR-X	10%
10.7%	10.3%	10.0%
	9.6%
			8.9%					7.2%
					8.3%	8.8%
							(Full potential)
					7.2%
200										5%
								4.9%
0											0%
Q3/FY20	Q4	Q1/FY21	Q2	Q3	Q4	Q1/FY22	Q2	Q3	Q4	Q1/FY23
									(Forecast)

*TAM: Total Addressable Market	8

Machines

(AI and robots replace human labor)

What is WPR-X?	This slide includes forward-looking statements. See Disclaimer on Page 2.

Tackling the polarization caused by technological innovations in addition to recent tough market conditions

WPR-X :

Negative consequences on various workplaces coming from the development of AI*

The drastic reform on profitability

• Economic downturn caused by re-expansion of COVID-19 in China and economic shrink in Europe through prolonged Russian invasion of Ukraine
• Polarization caused by technological innovation exists at the bottom

(Labor)

	Human labor
1800	Present
(Industrial	・Future jobs that will remain or disappear
Revolution)	・Future markets that will remain or disappear

(Timeline)

2045

(Singularity**)

Turning point when AI overcomes human levels of intelligence

Technological strength = Cost competitiveness (Technology creates cost competitiveness)

• Expedite development of products that can overwhelm competitors with our technology
• Implement structural reform to reduce fixed costs through automation with our technologies and streamlining operations

Development of Nidec's 2nd generation E-Axle

Collaboration between 3 bases

	Modern	Technology	Skills
	science
Highly competitive	(Product	(Manufacturing
(Product research)	Development)	research)
with 20% reduced
weight compared
with 1st generation

	Nidec Research And Development	Nidec Shiga	Nidec Center for Industrial
*AI : Artificial Intelligence	Center (Shin-Kawasaki)	Technical Center (Shiga)	Science (Keihanna) 9
**Singularity : Technological singularity. Future point when technological evolution breaks conventional social rules.

Mid-Term Strategic Goal

Vision2025

10