Nidec (6594) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2024 rose 14.8% year-over-year to JPY 648.2 billion, marking a record high under new management.

• Operating profit increased slightly by 0.1% to JPY 60.3 billion, also a record high, benefiting from a more profitable business mix and gains from the consolidation of Nidec PSA eMotors SAS.

• Consolidation of Nidec PSA eMotors (NPE) contributed a JPY 10.1 billion gain from a step acquisition.

• Upward revisions were made to full-year and first-half FY2024 forecasts for net sales and operating profit.

• Free cash flow figures diverged: one report notes a record JPY 167.2 billion, while another cites negative JPY 21.5 billion for Q1 FY2024.

Financial highlights

• Q1 FY2024 net sales rose 14.8% year-over-year to JPY 648.2 billion; operating profit was JPY 60.3 billion, up 0.1%.

• Operating profit margin declined to 9.3% from 10.7% year-over-year.

• Profit before income taxes and profit attributable to owners declined due to currency exchange effects; profit before income taxes fell 8.7% to JPY 78.6 billion, net profit attributable to owners dropped 12.5% to JPY 56.0 billion.

• EPS decreased 12.5% year-over-year to JPY 97.5.

• Q1 operating profit exceeded the original target of JPY 45 billion, reaching JPY 60 billion, with JPY 10 billion from accounting gains.

Outlook and guidance

• Full-year FY2024 net sales forecast raised to JPY 2,500 billion (+JPY 100 billion); operating profit forecast increased to JPY 240 billion (+JPY 10 billion).

• EPS forecast for FY2024 after stock split is JPY 160.98.

• Dividend payout ratio target remains at 30%; stock split (2-for-1) effective October 1, 2024.

• Conservative outlook maintained for water cooling business due to ongoing development.

• Targeting at least a 15% operating profit ratio across all business areas by 2030, with a mid- to long-term sales target of JPY 10 trillion by 2030 (JPY 7 trillion organic, JPY 3 trillion from M&A).