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  "documentTitle": "Nidec Corp. (6594 JP)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "presentationDate": "2016-12-13 00:00:00",
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  "notes": "The slide uses a table to calculate organic growth and lists quotes from management and sell-side analysts to demonstrate the discrepancy.",
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      "text": "We calculated the organic growth CAGR from FY 2011 through FY 2015 as 0.05% - essentially zero.",
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      "text": "Management quotes regarding organic growth from Q2 2016, FY 2015, Q1 2014, and Q1 2013 calls.",
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      "text": "Sell-side analyst quotes from October 2016, July 23, 2016, and July 22, 2016.",
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      "text": "organic growth: 0.05%",
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      "text": "In a manner that seems completely divorced from reality, management routinely speak on results calls as though Nidec has been generating strong organic growth. Examples include:",
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      "text": "We calculated Nidec’s organic growth rates by subtracting currency effects and acquisitions. We calculate the organic growth CAGR from FY 2011 through FY 2015 as 0.05% - essentially zero. Our calculations are below:",
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      "text": "It seems the sell-side does not understand the lack of organic growth. We would normally assume sell-side analysts have done similar calculations to estimate organic growth. However, sell-side report statements such as the following challenge that notion, and support our view that analysts are unquestioning in their acceptance of statements from Nidec management:",
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      "text": "“Please turn to Slide 11. We are continuing aggressive investments that support organic growth, which could be JPY 110 billion in fiscal year 2016.” — Q2 2016 call; “Touching on the organic growth outlook of automotive on Slide 22, the business is expanding at a faster pace than originally expected.” — FY 2015 call; “M&A is a very critical for us to grow. So organic growth and M&A to drive us of our high-growth.” — Q1 2014 call; “There are no acquisitions taken into consideration at all. This is completely due to organic growth.” — Q1 2013; “Looking toward FY 3/21 Nidec expressed confidence that it can increase automotive sales to JPY 600 billion solely through organic growth.” — October 25, 2016; “Q1 in line; rising organic growth prospects.” — July 23, 2016; “We do not think the medium and long-term growth in automotive household, commercial and industrial product is priced in.” — July 22, 2016",
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      "text": "These numbers are taken from the 20-F sections comparing the current fiscal year to the prior one (approximately p. 50-55).",
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      "text": "Table showing Reported Revenue, M&A Gain, FX Gain, Organic Revenue, Prior Year Base, and Est. Organic Growth for FY 2012-2015.",
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      "kind": "title",
      "text": "Nidec’s Organic Growth Barely Exists",
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