Nissan: Remarks on FY2015 first-half financial formula from Chief Competitive Officer Hiroto Saikawa

Posted on 02. Nov, 2015 by in Nissan Canada

Nissan Results Show Sharp Rise in Operating Profit

Hiroto Saikawa
Chief Competitive Officer, Nissan Motor Co., Ltd.

Overall, Nissan delivered plain business formula for a period. This reflected a clever opening in North America and Western Europe; increasing section sales in China; and a advantages of a continued cost fortify and a auspicious impact in year-over-year changes to a yen-dollar sell rate. These trends helped equivalent disappearing marketplace conditions in Japan and several rising markets.

Today’s reported gain are plain and uncover a company’s altogether opening continues to improve.

For a initial half of mercantile year 2015, Nissan is stating sum net revenues of 5.93 trillion yen. This represents an boost of 15.3% over a same duration in 2014. Operating distinction totaled 395.0 billion yen, that equates to an handling domain of 6.7%. Net income increasing to 325.6 billion yen, that represents a 5.5% net margin. Free money upsurge for a automotive business was 213.0 billion yen for a initial half, and we finished a duration with an automotive net money position of 1.5 trillion yen.

Before going by a financial formula in some-more detail, we will initial quickly outline some of a business highlights as good as a sales opening for a period.

 

FY15 FIRST-HALF BUSINESS UPDATE

As partial of a Power 88 mid-term plan, Nissan has confirmed a product descent around a world.

In a pivotal Chinese market, we launched 3 new models; a Murano in August, and a Qashqai and Lannia in October. These launches follow a healthy transformation in Chinese newcomer automobile sales of 9.5%. Underlining a significance of this marketplace for Nissan, we have also finished China a initial launch nation for a hybrid chronicle of Murano.

In North America, another pivotal market, we denounced a new 2016 Nissan Altima sedan with revised styling, extended opening and best-in-class customary highway fuel economy. Altima sales have grown some-more than 60% in a US over a past 5 years, and we pattern serve sales expansion with a latest model, complementing a success of a SUV operation led by a Rogue.

Meanwhile, in Europe, Nissan underlined a ambitions for a Infiniti reward code during a new Frankfurt automobile uncover by phenomenon a Q30 active compact. This is Infiniti’s initial tellurian entrance in a compress segment, that we pattern to attract a new era of reward buyers.

Our code interest is flourishing globally. Interbrand has again named Nissan as one of a world’s many essential brands for 2015. Nissan ranked 49, adult from 56 in 2014 and is a fastest-rising automotive code in this year’s study. Our code interest continues to be extended by links with high-profile sports events including a UEFA Champions League in Soccer, a Rio Summer Olympics in 2016 and a International Cricket Council, that was announced final month.

Nissan serve stretched a tellurian sports offered footprint as a Chinese corner venture, Dong Feng Nissan Passenger Vehicle Company, announced a multi-year offered partnership with National Basketball Association China. A poignant series of basketball fans are a immature era famous as “Post-80s” and “Post-90s”. They are elaborating to turn a many absolute consumer shred in a Chinese automotive marketplace and they are a concentration of a “Young Nissan” strategy. The partnership with NBA China is approaching to heighten a communication with these immature consumers, building a form around new product launches.

In Japan, Nissan instituted a new branding devise focused on a thesis of “Challenge.” This builds on a continued graduation of Nissan as a code mixing modernized automotive technology, quite by foundation and automobile comprehension to cut emissions and raise safety. The code interest of these final dual themes are represented by dual “zeroes”: “zero emission” and “zero fatality.”

We sojourn committed to a zero-emissions strategy. Recently, we introduced a 2016 all-electric LEAF, that facilities a new battery delivering some-more than a 20% alleviation in extended operation between charges. Nissan stays a world-leader in 0 emissions with accumulative sales for a whole EV choice now leading 200,000 units.

Reflecting a joining to zero-emissions, a Renault-Nissan Alliance recently announced that we will yield 200 pristine electric vehicles, a world’s largest electric-vehicle fleet, to a United Nation’s COP21 meridian discussion in Paris.

And during a Tokyo Motor Show, Nissan final week suggested a IDS Concept, that embodies a prophesy of a destiny of unconstrained pushing and 0 glimmer electric vehicles. This judgment combines long-range battery record with synthetic intelligence, unconstrained systems, cutting-edge pattern and modernized materials in a automobile that enhances a driver-experience, produces no emissions, reduces a risk of accidents and improves newcomer comfort. It is a pointer of things to come.

During a mercantile initial half, we saw continued advantages from a Alliance strategy, led by a long-standing partnership with Renault. In July, a Renault-Nissan Alliance announced record synergies of 3.8 billion Euros, reflecting a advantages of increasing joining in pivotal areas such as purchasing and corner indication development.

Our Common Module Family symbolizes this synergy potential. At a Frankfurt Motor Show in September, Renault denounced a all-new Megane, that is a sixth indication for a Alliance formed on a CMF-C/D architecture. Earlier this year, Renault denounced a initial tiny automobile on a Alliance’s CMF-A architecture, that is a Kwid indication designed for a Indian market. Nissan Motor is also building a new Datsun indication regulating this design that will be introduced during a commencement of 2016.

At Frankfurt, we also explained a latest co-operation between Renault-Nissan and Daimler. Since a launch of a partnership in 2010, a sum devise portfolio common between Renault-Nissan and Daimler has some-more than quadrupled to 13 projects in Europe, Asia and North America.

In September, we pennyless belligerent for a joint-venture prolongation formidable COMPAS, in Aguascalientes, executive Mexico, to build next-generation reward compress vehicles for a Mercedes-Benz and Infiniti brands. The plant is approaching to have an annual prolongation ability of some-more than 230,000 vehicles by 2020.

We also continue to get Alliance advantages from a partnership with Dong Feng in China and a AvtoVAZ business in Russia.

In a serve instance of a Alliance strategy, Nissan, Mitsubishi Motors Corporation and a corner try NMKV have concluded to extend a corner devise on building a subsequent era of minicar models. NMKV will continue to be obliged for formulation and development. But Nissan will be some-more deeply concerned in expansion operations. Alongside Mitsubishi’s imagination in minicars, we will be means to use Renault-Nissan record and resources to rise some-more rival and appealing minicars to consumers. EV minicar will also be grown by a team-work with Mitsubishi.

FY15 FIRST-HALF SALES PERFORMANCE

While altogether tellurian attention volumes increasing 1.2% to 43.2 million units, Nissan’s sum sell volume was adult 1.3% during 2.62 million units in a initial half with softened sales in North America, Europe and China, offsetting weaker performances in Japan and rising markets.

Looking opposite a regions…

In Japan, a altogether marketplace is experiencing a decrease with sum attention volumes down 5.8%. Our sell section volume in a initial half of mercantile 2015 was 265,000 units, down 9.0% contra a same duration of a before mercantile year. Our marketplace share was down 0.4 commission points to 11.4%.

Despite a decrease in a Japanese marketplace as a whole, we were speedy by direct for a X-Trail, particularly for a hybrid version, that we sole some-more than 29,000 units in a initial half. The DAYZ and DAYZ ROOX remained a top volume model, offered some-more than 62,000 units in a period.

In China, Nissan’s sales of 588,000 units increasing by 5.7% in a initial 6 months of a calendar year, out-performing a trend for a altogether industry. Encouraging sales of a X-Trail and Sylphy helped lift Nissan’s marketplace share in China by 0.2 points to 5.2% in a initial half. Looking during a nine-month duration to a finish of September, Nissan’s section sales increasing by 1.8% to 859,000 units and marketplace share remained fast during 5.2%.

Looking deeper during a 9-month sales opening in China, we see that a formula reflects healthy expansion in newcomer vehicles, where Nissan section sales rose by 9.5% to 722,000. This was partially equivalent by continued debility in Chinese direct for light blurb vehicles where a sales fell by 25.7% to 137,000 units.

Our plain expansion transformation continues in Oct with Dong Feng Nissan newcomer automobile sales approaching to boost some-more than 19%. Including LCV and Infiniti, sum China sales in Oct is approaching to boost some-more than 16%.

Turning to North America: in a US, a sales grew 6.6% to 755,000 units, display that Nissan outperformed a altogether marketplace with a US marketplace share rising to 8.3%. This opening enclosed clever direct for a Rogue and a Altima. In Canada, sales increasing 11.7% to 73,000 units and a share increasing 0.5 points to 6.7%. Sales also increasing in Mexico to 166,000 units, where Nissan has continued to be a marketplace personality with a marketplace share of 26.0%, adult 0.4 points contra a before year period.

In Europe, Nissan saw sales boost by roughly 10% to 367,000 units in a initial half of a mercantile year and a marketplace share increasing to 4.1%. Sales in Europe incompatible Russia increasing 17.1% to 306,000 units, amid clever direct for a Qashqai and Pulsar. This helped lift a marketplace share to 3.8%.

In Russia, a sales fell 15.9% to 61,000 units, that was approximately half of a rate of a 31.5% decrease for a attention overall. Despite continued mercantile sensitivity in Russia, a marketplace share rose by 1.4 points to 7.6%.

In other markets, sales volume was down 5.2% to 401,000 units, that reflected a mercantile downturn in a rising markets. In Asia and Oceania, sales declined 6.4% to 168,000 units, by 2.5% in Latin America to 86,000 units and by 12.0% in a Middle East to 97,000d units. This was equivalent partially by a 10.7% boost in Africa, where we sole 50,000 units.

FY15 FIRST-HALF FINANCIAL PERFORMANCE

Under a equity accounting process for a corner try in China, sum net revenues increasing 788.7 billion yen or 15.3% to 5.93 trillion yen, essentially driven by a boost in North American and European volumes and auspicious banking translation. Operating distinction increasing 133.1 billion yen or 50.8% to 395.0 billion yen. Net income was 325.6 billion yen, an boost of 88.6 billion yen or 37.4% contra a before year period.

Looking during Operating Profit transformation in detail:

  • The 46.6 billion yen auspicious impact from unfamiliar sell came especially from a alleviation of a yen opposite a U.S. dollar.
  • Cost equipment including purchasing cost rebate efforts, reduce tender element costs and product alleviation resulted in net assets of 88.6 billion yen.
  • Volume and brew constructed a certain impact of 125.2 billion yen.
  • The boost in offered and offered losses resulted in a 75.0 billion yen disastrous movement.
  • RD costs increasing by 10.8 billion yen.
  • Manufacturing losses increasing by 6.7 billion yen.
  • And other equipment had a disastrous impact of 34.8 billion yen.

At a finish of a period, Nissan continued to suffer a plain automotive net money position of 1.47 trillion yen.

As we have finished in before buliding we are also presenting a financial opening on a government pro forma basis, that includes a proportional converging of a Chinese corner try that is a basement on that a Power 88 targets were established. On this basis, as shown here, for a half, net revenues were 6.45 trillion yen, handling distinction increasing by 38.8% to 461.6 billion yen that reflects a 7.2% OP domain and net income was adult 37.4% during 325.6 billion yen.

FY15 FULL YEAR OUTLOOK

In annoy of this volume revision, formed on a clever sales in North America and Western Europe, ongoing cost fortify and a assumptions on sell rate movements, we are reworking upwards a opinion on financial opening for a residue of a mercantile year.

Nissan has filed a following full-year foresee with a Tokyo Stock Exchange, regulating a unfamiliar sell rate arrogance of 117 yen to a dollar and 130 yen to a euro for a second half. It is formed on a equity accounting process for a Chinese corner venture.

  • Net income is approaching to be 12.25 trillion yen – a 1.2% alleviation opposite a prior outlook;
  • Operating distinction is foresee to be 8.1% aloft during 730 billion yen;
  • Net income is approaching to strech 535 billion yen;
  • Capital output is approaching to sojourn during 550 billion yen;
  • And RD losses will sojourn during 530 billion yen.
  • Looking during a change in handling distinction from a prior outlook, we anticipate:
  • A certain unfamiliar sell transformation of 45 billion yen;
  • A 5 billion yen certain impact from offered and sales due to nation brew improvements
  • And a 5 billion yen alleviation in monozukuri and others

CONCLUSION

In summary, a initial half mercantile formula were healthy, reflecting a stability advantages of a ongoing product descent and effective cost discipline, sum with a advantages of auspicious sell rate movements and good giveaway money upsurge generation.

Based on a revised Full Year outlook, we continue to pattern to beget plain full year automotive giveaway money upsurge and broach appealing earnings to shareholders. Nissan stays committed to progressing a smallest 30% payout ratio to net income during a residue of a mid-term devise period, and we foresee a division remuneration of 42 yen per share for this mercantile year. Earlier today, a Board authorized remuneration of an halt division of 21 yen per share to be finished on Nov 26, 2015.

In conclusion, we would like to reaffirm that Nissan stays committed to improving a business opening and we are on lane to grasp another year of solid, essential growth.

 

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