Nidec Corporation

Reported Q1 FY2025 preliminary figures were net sales of JPY637.9 billion, down 1.6% year over year, operating profit of JPY61.5 billion, up 2.3%, profit before income tax of JPY59 billion, down 24.5%, and profit attributable to owners of the parent of JPY45.5 billion, down 18.5%. Free cash flow was plus JPY9.8 billion. Management said the full-year forecast remains unchanged. They also quantified the currency impact as JPY35.8 billion on sales and JPY2.6 billion on operating profit, plus JPY2 billion of structural reform impact and JPY1 billion in appliance/commercial/industrial restructuring cost.

CEO Mitsuya Kishida framed the quarter as a period of immediate issue-solving and foundation-building. He repeatedly stressed that Nidec must become a “bigger and a better global company,” with a more global management system, clearer operating discipline, and a simplified structure across five business pillars. He was upbeat on data-center-related businesses, air-conditioning compressors, emergency power generators, and the long-term potential of the portfolio, but he also said the company must confront underperforming businesses and not make exceptions in restructuring.

CFO Akinobu Samura said Q1 performance was affected by a stronger yen and by temporary items, but underlying product-group profitability improved absent those one-offs. He highlighted better profit in small precision motors on HDD motors and water-cooling modules, better profit in automotive thanks to China traction motor business, and a weaker appliance/commercial/industrial result due to seasonality, currency exposure, and JPY1 billion of structural reform cost. He also said free cash flow was low at plus JPY9.8 billion because working capital reduction did not progress as planned, especially in MOEN energy-related inventory and machine tools where sales are running above order book.

Analysts focused on the IRC country-of-origin/tariff investigation, asking what the issue was, how broad the probe is, and whether the September deadline can be met. Kishida said the problem began with an inaccurate country-of-origin expression for FIR, that FIR’s investigation is complete, and that the scope has widened to ASIM and other potential issues; he said the company is working daily toward completing the review by the extended deadline. Questions also pressed on the path to higher second-half profit, with management saying underperforming businesses will be shrunk or exited while higher-margin areas like small precision motors, alternator power generators, and mine-related business should drive a significant Q3/Q4 conversion. On tariffs, management said the direct impact is limited and estimated at JPY5 billion to JPY6 billion, and that local production/local sales should soften indirect effects.