Nidec (6594) Q1 2026 earnings summary

Executive summary

• Preliminary Q1 FY2025 results were disclosed ahead of full reporting due to ongoing investigations into country-of-origin labeling and trade/tariff issues at subsidiaries, with a three-month extension for official financial reporting.

• Net sales declined 1.6% year-over-year to JPY 637.9 billion, with operating profit margin at 9.6%.

• Operating profit rose 2.3% year-over-year to JPY 66.15 billion, but profit before tax fell 24.5% and net profit dropped 18.5%.

• The company is executing a mid-term plan focused on structural reform, cost reduction, and business portfolio optimization.

• New product launches and acquisitions, such as Xecom, are expanding presence in air conditioning, heat pump, and AI/data center markets.

Financial highlights

• Net sales: JPY 637.9 billion, down 1.6% year-over-year.

• Operating profit: JPY 66.15 billion, up 2.3% year-over-year.

• Profit before tax: JPY 59 billion, down 24.5% year-over-year.

• Net profit attributable to owners: JPY 45.5 billion, down 18.5% year-over-year.

• Free cash flow remained low at JPY 9.8 billion for Q1.

Outlook and guidance

• Full-year financial forecast remains unchanged despite Q1 declines, with FY2025 net sales forecast at JPY 2,600 billion and operating profit at JPY 260 billion, targeting a 10% operating margin.

• Mid-term plan aims for JPY 2,900 billion sales and 12% operating margin by FY2027, with ROIC improvement to 12%.

• Significant business conversion and profit improvement expected in Q3 and Q4, driven by high demand in alternator power generators and structural reforms.

• Ongoing focus on cost reduction: JPY 100 billion variable and JPY 50 billion fixed cost cuts targeted by 2027.