Nidec (6594) Status update summary

Management Changes and Leadership Transition

• Michio Kaida was appointed President and CEO, and Masayuki Minai as Representative Director, following the resignation of Mitsuya Kishida due to inappropriate accounting practices and significant impairment losses.

• The board and nomination committee, with third-party input, selected new leadership to restore trust and drive reform.

• Leadership profiles emphasize experience in technology, compliance, and human resources.

• The leadership transition was prompted by ethical concerns and the need for urgent structural reform.

Financial Performance, Restatements, and Impairment Losses

• A consolidated impairment loss of 632.1 billion yen was recognized, mainly from home appliance and automotive businesses.

• Net assets decreased by 476.9 billion yen, with 208 billion yen attributed to inappropriate accounting practices.

• Cumulative restatement of operating profit from FY2020–FY2024 totaled -382.6 billion yen.

• FY2025 net sales reached 2,708.7 billion yen (+3.9% YoY), with an operating loss of 519.0 billion yen.

• Free cash flow remained positive at 98.0 billion yen.

Audit Opinion and Internal Controls

• PwC Japan issued a disclaimer of opinion for FY2026, citing insufficient audit evidence due to ongoing governance and accounting issues.

• Internal control over financial reporting was deemed ineffective, with material weaknesses in oversight, risk reporting, and audit functions.

• Inappropriate accounting practices, misleading information, and incomplete HR actions were identified as key audit concerns.

• Preventive measures are being implemented, including the removal of individuals involved in improper practices.

• Internal control improvements and confirmation reports are scheduled for submission by October 28.