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 are concentrated in the appliance business, with some in automotive and IT, but none have impacted product safety or function so far.

• A group-wide quality inspection was launched in January 2026, and the investigation covers cases from FY2020 to FY2025.

• An external Investigation Committee of independent legal experts was established to determine root causes and recommend preventive measures, aiming to complete its work by August 2026.

• An Improvement Promotion Office was set up to enhance whistleblowing systems, customer communication, and cross-functional problem-solving.

Governance and board reforms

• The board nomination process was overhauled to ensure transparency, diversity, and expertise in accounting, governance, and risk management.

• Twelve new and reappointed board members were selected based on a revised skill matrix emphasizing compliance, finance, management, and capital market knowledge.

• The board now includes independent outside members with backgrounds in governance, finance, and global business, strengthening oversight and risk management.

• The board aims to restore trust and enhance corporate value through improved oversight and governance.

• Succession planning and leadership development are prioritized to foster a new generation of global leaders.

Business strategy and transformation

• A five-year business transformation plan (FY2026–2030) focuses on governance, internal controls, business portfolio review, group reorganization, and IT infrastructure reform.

• Businesses were reorganized into five pillars, shifting to consolidated management and clarifying accountability.

• The company will invest ¥100 billion in IT and ¥30 billion in manufacturing infrastructure over five years, supporting operational efficiency and governance.

• Active investments are being made in AI datacenters, energy storage, and semiconductors, while optimizing production sites and reducing legal entities.

• Dividend payments are planned to resume after restating prior years' accounts, maintaining financial soundness and strategic investments.