Nidec (6594) Investor update summary

Quality issues and investigation

• Over 1,000 quality-related misconduct cases were identified, mainly unauthorized changes to materials, processes, or designs without customer approval, with 96.7% of cases in this category.

• Most issues were found in the appliance business, with some in automotive and IT, but none have impacted product safety or function so far; corrective actions will be taken as needed.

• An independent investigation committee of external legal experts was established to determine root causes, recommend recurrence prevention, and ensure objectivity, with results expected by August 2026.

• Communication with customers has been prioritized, and a new Improvement Promotion Office was created to lead reforms and enhance transparency.

• The investigation covers FY2020–FY2025, with ongoing efforts to collect employee input and address whistleblowing.

Governance and board reforms

• A new Board of Directors system is being implemented, emphasizing diversity, expertise in accounting, governance, and independence, with an independent outside director as chair.

• The nomination process was revised for transparency and objectivity, with only external directors involved in candidate selection and a new nomination committee composition.

• Twelve new board candidates were chosen for skills in compliance, finance, management, market knowledge, and corporate turnaround, aiming to strengthen oversight and corporate value.

• The board reshuffle is part of broader governance reform to regain stakeholder trust and address past shortcomings in risk information sharing.

Business strategy and transformation

• A five-year business transformation plan (FY2026–2030) was announced, focusing on portfolio review, group reorganization, IT infrastructure reform, and maximizing ROIC.

• Business bases will be categorized for restructuring, optimization, growth, or new investment, with a focus on high-potential areas like energy storage and semiconductors.

• Major IT infrastructure reform with ¥100 billion investment and ¥30 billion in manufacturing enhancements over five years to support governance and efficiency.

• Reorganization around five business pillars, consolidation of sites and legal entities, and a shift to consolidated business management.

• The company aims to resume dividend payments after restating prior years' accounts and will finalize its midterm business plan by autumn.