Special Feature 2021 - Integrated Report 2021
Message from the Chairman
Aiming to become a global company that
continues to grow for the next 100 years and beyond
Nidec will celebrate its 50th anniversary in 2023. Nidec, which I established with my three colleagues in 1973, has grown to a company that achieved consolidated net sales of 1,618.1 billion yen and an operating profit of 160.0 billion yen in FY2020. We will never remain satisfied with our growth to date, and will continue to accelerate our further growth, aiming to become a company with consolidated net sales of 10 trillion yen by FY2030.
We aim to become a global company that contin-ues to grow for the next 100 years and beyond.
I believe that recognizing Nidec’s mission and the significance of its existence will be important for our further growth. Keeping in mind again its mission, which is to contribute to the Earth by producing the highest quality motors in the world, and the signifi-cance of its existence, which is to provide products and solutions required by society, we will work together as a group toward our growth.
In the first half of FY2021, the business environ-ment surrounding our company was not smooth, mainly due to a drastic decrease in the operation rate of our production site in Vietnam, which was caused by the spread of the COVID-19 pandemic. It is quite possible that we will face such adversity again. I recognize that it is extremely important for us to return to the starting point of Nidec and continue to take on challenges, while always thinking about “How we can do it” and “How we tackle challenges and go through what others think they cannot do” without using adversity as an excuse, so that we can continue to fulfill Nidec’s mission.
Change in the Business Management System
In June 2021, I handed over my position as CEO (Chief Executive Officer) to President Seki. His man-agement style is very similar to mine, and I believe he is the right person to be the CEO in terms of quick decision making, leadership and humanity. From now on, President Seki will assume responsibility for the business performance of the Group as CEO. As Representative Director and Chairman, I will continue to participate in the important management decision-making process of the Nidec Group, supporting President and CEO Seki. I will also put even more effort into the work that I am supposed to as the founder. I will work on my duties with more passion than ever before, including ensuring that our mission statement is well understood by the management teams and employees, examining new M&A deals, improving management after M&A, and dealing with long-term business management issues.
A change in the business management system does not produce results overnight. It takes time to learn the management philosophy of Nidec, which has continued to grow for 48 years since its foun-dation. As an assistant to the CEO, I will do my utmost to support President Seki until he learns Nidec’s management style and takes control of business management.
I expect that he will grow further as the leader of Nidec by learning by himself that there is a good chance for Nidec to grow in tough times when we face adversity in our business, and that difficult circumstances will sustain our growth.
Implementation of Necessary Reforms
It can be said that we are currently facing the great-est opportunities since our founding. First of all, our EV traction motor system E-Axle has contributed to the trend of automotive electrification, which is said to occur once every 100 years. Moreover, we see a dramatic expansion of the fields where our motor technology can provide solutions to global issues, represented by the Five Big Waves.* In addition to seizing such opportunities, we will not hesitate to make the necessary reforms to make Nidec a global company that continues to grow for the next 100 years and beyond. We have already implemented the necessary reforms for the sustainable growth of the company, including the declaration of achievement of carbon neutrality, personnel system reforms (change in the appraisal system to improve productivity, transition to a job-based personnel system, etc.), and the enhancement of the governance system (transition to a company with an Audit and Supervisory Committee and the establishment of the Remuneration Committee). Our business environment is changing day by day. Under these circumstances, we will continue to steadily implement the necessary reforms, keeping in mind the spirit that a company that does not change will decline, as conveyed by the quotation: “A snake that doesn’t shed its skin will die.”
* Please refer to pages 19 to 20 of "Integrated Report 2021".
Founder, Representative Director and Chairman
Message from the CEO
Striving to achieve consolidated net sales of 10 trillion yen
On the Inauguration of CEO
At the general meeting of shareholders in June 2021, I was appointed as CEO in place of the founder and Chairman Nagamori. Although I have become CEO, I will never stop aiming for lofty goals for growth, which Chairman Nagamori has continued to pursue since the company was founded.
To achieve the new medium-term strategic goal Vision 2025, which is an intermediate goal toward achieving consolidated net sales of 10 trillion yen by FY2030, I will strive in my daily work while making the most of my experience and remaining humble to learn.
Business Environment in FY2021
At the same time as the announcement of the financial results for the 2nd Quarter of FY2021, we revised our business forecasts upward for this fiscal year. The new business forecasts are 1,800 billion yen for consolidated net sales and 190 billion yen for operating profit. In the first half of this fiscal year, the business environment was severe for us due to a drastic decrease in the operation rate of our production site in Vietnam, which was caused by the spread of the COVID-19 pandemic, production adjustment by customers, and the rising prices of raw materials. I recognize that our business envi-ronment will be still challenging in the second half of this fiscal year. Without using adversity in our business environment as an excuse, we will return to the basic spirit of Nidec, “Do it now; do it without hesitation; do it until completed,” and make every effort to achieve our goals.
New Medium-Term Strategic Goal Vision 2025
In July 2021, we announced the new medium-term strategic goal Vision 2025, in which we plan to achieve consolidated net sales of two trillion yen, which was the target value in the former medium-term strategic goal “Vision 2020,” by FY2022, and consolidated net sales of four trillion yen by FY2025 (one trillion yen is expected to be gained through new M&A deals). By shifting our business portfolio to high-growth fields, represented by the EV trac-tion motor system E-Axle in the automotive busi-ness, we will achieve our goals of consolidated net sales of 10 trillion yen by FY2030. In Vision 2025, we have set not only numerical targets but also ESG targets, including declaring the achievement of carbon neutrality by FY2040. Recognizing that ESG management is the core element that determines Nidec’s sustainability and growth potential, we will steadily advance reforms.
To achieve the new medium-term strategic goal Vision 2025, high growth in the automotive business will be essential. We have already received orders for 3.5 million units of E-Axle, an EV traction motor system, for FY2025, and we expect that orders will continue to increase in the future. With the tightening of environmental regulations around the world, the EV market is expected to expand to a market of tens of millions of vehicles annually in the 2030s. Consequently, major structural changes are occurring, including the rise of emerging EV manu-facturers, entry into the EV market from different industries, and the acceleration of fabless manufac-turing. We have begun to consider collaboration with the Hon Hai Group in Taiwan, which is the world’s largest electronics manufacturing service (EMS) company. We will accurately grasp the big waves of change in the automotive industry and further accelerate the growth of our business.
We recognize that ESG management is an important element for the sustainable growth of Nidec, and we have decided to incorporate it into the goals of Vision 2025. As actions to address climate change, which is one of the most important ESG issues, we have set two goals: (1) achieving carbon neutrality for business activities (Scope 1 and 2) by FY2040, and (2) laying out a plan to reduce CO2 emissions in the supply chain (Scope 3) by FY2025. Regarding the personnel system, we changed the appraisal system in FY2020. For the governance system, we shifted to a company with an Audit and Supervisory Committee in June 2020 and established the Remu-neration Committee in February 2021. Thus, we will steadily improve the ESG management system.
Representative Director and President
(Chief Executive Officer)