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Nidec upholds shareholder-oriented management and pursue high growth, high profitability and high share value to build long-term, sustainable growth in shareholder value. Placing importance on regular dividend payments, we seek to increase our dividend payout to around 30% of our consolidated net income. In alignment with this policy, we have decided to increase the interim dividend by 5 yen to 45 yen per share for the six months ended September 30, 2011, which translates into a payout ratio of 28%.
In the meantime, in October 2011, we announced an increase of the repurchase quota under our one-year-long share repurchase plan initially approved on February 5, 2011. The amended share repurchase plan authorizes the company to repurchase up to 6 million shares of, or 47 billion yen worth of, its outstanding common stock, with the repurchase period remaining unchanged. This compares with the previous repurchase limit of 3 million shares of, or 25 billion yen worth of, its outstanding common stock under the original repurchase plan.We will stay focused on our shareholder-value enhancement initiatives in ways that effectively reflect your expectations.
Overview of the Six Months Ended September 30, 2011
1H/FY2011 Sales Up 8% Y/Y. Operating Income from the "General Motors" Operations Surpassed Its Full-Year Fiscal 2010 Level.
First Half FY2011 Financial Results
* Prior-period figures have been retrospectively adjusted to reflect the discontinuation of the specialty lens units operations in March 2011.
The first-half period of FY2011 displayed mixed trends for our business environment. On one hand, the earthquake-induced supply chain disruptions recovered at a faster pace than previously expected, notably easing concerns over far-reaching negative consequences. On the other hand, a strong downtrend took hold across developed economies to the extent of casting a chill over emerging markets in the second quarter period.
Under these circumstances, the Nidec Group has set forth the following priority goals for the fiscal year ending March 31, 2012 as we aspire to work "boldly and straightforwardly towards growth":
- addressing the challenges of achieving higher sales and profits,
- building up a strong international business framework, and
- expanding into new growth markets.
As a result of these efforts, our consolidated net sales for the six months ended September 30, 2011 increased by 25,400 million yen, or approximately 8%, to 361,700 million yen, compared to the same period of the prior year. Much of the credit belongs to higher sales of motors in the "General Motors" product category (consisting of household, industrial and automotive motors), which more than offset the decline in sales of certain other products left unshipped due to the earthquake-induced disruptions to the customers' supply chains.
As part of our core initiatives toward attaining the mid-term goals of "Vision 2015," Nidec's product portfolio is going through the phase of rapid transformation and expansion. The six month sales from the "General Motors" product category doubled year on year, reflecting the increased revenue contribution from Nidec Motor Corporation, formerly the U.S. Emerson's motors and controls business consolidated into Nidec in September 2010. The six month operating income from the "General Motors" product category quadrupled year on year, even surpassing its full-year fiscal 2010 level. As a result, the "General Motors" product category accounted for 26% of our total consolidated sales in the six months ended September 30, 2011, compared to 14% in the same period of the previous year.
In addition, we completed the acquisition of Sanyo Seimitsu Co., Ltd. on July 1, 2011 and made it our consolidated subsidiary as Nidec Seimitsu Corporation.
Business Forecasts for the Fiscal Year ending March 31, 2012
For the six months ended September 30, 2011, our consolidated net sales and profits exceeded our most recent forecasts released on July 22, 2011. However, the business environment in which we operate remains uncertain. The global economy continues to be affected by struggling efforts to seek solutions to the financial crisis in Europe, whose chilling effects on economic activities have begun to spread from developed countries to emerging markets. Also contributing to the uncertainty are the strong Japanese yen and rising raw material and labor costs.
Aside from macroeconomic factors, we have recently experienced serious effects of a natural hazard on our manufacturing operations. A massive flooding that hit Thailand in October inundated the country's major industrial areas, causing serious disruptions in a range of product supply chains. Many of our manufacturing factories located in the flooded areas were also exposed to inundation and forced to halt operations.
We are currently making our best efforts to measure the possible impact of the Thai flooding on our consolidated business performance for the year ending March 31, 2012. However, the situation as it now stands is extremely fluid and the outcome will depend largely on the pace of our on-site recovery efforts and emergency measures to secure necessary production capacity. For the moment, we leave our earnings guidance published on July 22, 2011 unchanged.
FY2011 Financial Forecasts
- Net sales: 760,000 million yen (Up 10.4% Y/Y)
- Operating income: 90,000 million yen (Down 0.6% Y/Y)
December 2011
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Chairman of the Board, President & Chief Executive Officer
Shigenobu Nagamori |
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Revised FY2011 Financial Forecasts
- Net sales: 700,000 million yen (Up 1.7% Y/Y)
- Operating income: 70,000 million yen (Down 22.7% Y/Y) |
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