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 falling into 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; corrective actions will be taken as needed.

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

• The investigation covers cases from FY2020 to FY2025, with ongoing efforts to clarify the scope and impact.

• The company is enhancing whistleblowing systems and communication with customers, and has launched an Improvement Promotion Office to drive reforms.

Governance and board reforms

• A new Board of Directors system is being implemented, emphasizing diversity, expertise in accounting, governance, and independence, with outside members selected for legal, compliance, finance, and turnaround experience.

• The nomination process was revised for transparency and objectivity, with only independent directors involved in candidate selection and an independent outside director chairing the board.

• Twelve new board candidates were chosen for their skills in compliance, finance, business management, and market knowledge.

• 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 portfolio review, group reorganization, and IT infrastructure reform, aiming to build a highly profitable, global company.

• The company will invest ¥100 billion in IT and ¥30 billion in manufacturing infrastructure over five years.

• Business bases will be categorized for restructuring, optimization, growth, or new investment, with a target to consolidate business sites by 2030.

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

• Dividend payments are planned to resume after restating prior years' accounts, with strategic capital allocation for growth and new business areas.