February 10, 2016

Fiscal Year 2015 Third-quarter Financial Results
Media Conference
February 10, 2016
Joji Tagawa, Corporate Vice President, Nissan Motor Co., Ltd.

Nissan delivered solid financial and operational results for the nine month period. Our results reflected strong performance in North America and Western Europe, which offset volatility in foreign exchange rates, including the lessening of the yen/US dollar tailwind, and declining market conditions in several emerging markets.
For the nine month period ending December 31st of 2015, Nissan is reporting consolidated net revenues of 8.94 trillion yen and operating profit of 587.5 billion yen. This equates to an operating margin of 6.6%. Net income rose to 452.8 billion yen, which represents a 5.1% net margin. Unit sales, revenues and net income all reached record highs for the nine month period. Nissan ended the period with an Automotive net cash position of 1.4 trillion yen, a rise of more than 222 billion  yen compared to the level at the same point in fiscal year 2014.

Nissan maintained its US product offensive by launching the all-new Titan XD pick-up truck, which was named “Best Pickup Truck of 2016” by Cars.com and PickupTrucks.com. The appeal of the Titan was reinforced at the recent North American International Auto Show in Detroit, where we unveiled the Warrior concept, a modified super-sized vision of how Nissan could redefine the full size pickup segment. Further variations of Titan’s production model will be introduced throughout of this year.
The Titan builds on our strong model range in the US, where the 2016 Rogue was named ‘Family Car of the Year’ by Cars.com.
Our premium brand Infiniti had a record-breaking year in calendar 2015 with global sales of 215,250 vehicles, up 16% from the previous year. The US continues to be the largest market for Infiniti with unit sales increasing by 14% to 133,500 units for the 2015 calendar year.
The Infiniti line-up now has been expanded with the start of sales of the new Q30 active compact in Europe, which is the brand’s first vehicle manufactured in Europe at our Sunderland plant in Britain.
The Infiniti range will be further enhanced in 2016 with the launch of the QX30 premium active crossover.  While sales of these new vehicles will begin in Europe, they will also be exported to other markets including the US and China in 2016.
Last month at the Detroit show, we unveiled the new Q60 sports coupe, which reflects the brand’s combination of performance, elegance and driver-focused design.
Our product offensive also continues with Datsun. This year, a new model utilizing the A-segment architecture from the Renault-Nissan Alliance Common Module Family, will be introduced under the Datsun lineup in India.
As previously announced, Interbrand again named Nissan as one of the world’s most valuable brands for 2015. Nissan ranked 49, up from 56 in 2014 and is the fastest-rising automotive brand in the study. Around the world, we have combined our product offensive with ambitious marketing and sports partnerships, including Nissan Brazil’s partnership with the Rio 2016 Olympic and Paralympics Games, the UEFA Champions League and the International Cricket Council. Last November, we enhanced our sports-marketing efforts with a historic deal to become the Official Sponsor of 100 US colleges and universities, and we will also support select NCAA Championships. The four-year agreement is the most far-reaching sponsorship in the history of US collegiate sports.
These efforts reflect our determination to raise the company’s profile and brand visibility in numerous markets.
The Nissan brand is increasingly associated with breakthrough products, of which the zero-emission Nissan LEAF remains a flagship. Last month, we delivered the 200,000th Nissan LEAF, making it the world’s most popular and successful electric vehicle.
We expect the popularity of the Nissan LEAF to increase even further thanks to the 2016 model, which is equipped with a new 30 kilowatt battery that delivers more than a 20% extension to driving range. Following the start of sales in the US in November, the latest Nissan LEAF went on sale in Japan in December. The Nissan LEAF also went on sale in Europe last month.
In December, we announced plans to join forces with BMW in the US to offer public fast-charging at 120 locations across 19 states, which will benefit Nissan LEAF and BMW i3 customers and support the increased adoption of electric vehicles nationwide. This shows our expansion of cooperation with BMW, following the agreement with them for an EV charging infrastructure in South Africa in May 2015. And last month, we announced that this partnership had been extended to Mexico to offer customers access to more than 150 charging stations in the country. This partnership between Nissan and BMW, which are two leading EV manufacturers, will meet growing demand for additional public fast-charging options, enabling drivers to extend their zero-emission journeys.
Our EV leadership underlines our commitment to bring new technologies to market. This includes our ambitions in autonomous drive systems. Last month, at our research center in Silicon Valley, we announced that the Renault-Nissan Alliance will launch more than 10 vehicles with autonomous drive technology by 2020.
This range of vehicles with autonomous capabilities – including “multiple-lane control” and “intersection autonomy” – will be launched in the US, Europe, Japan and China.
Alongside such next-generation technology, the company continues to refine and launch highly-efficient new engines. These include one of the lightest, most powerful, cleanest and most fuel-efficient V6 that we have ever offered, production of which will begin in 2016 for our Infiniti brand at the powertrain plant in Iwaki, Japan.
Our Alliance remains a leading force in the global automotive industry. In the calendar year 2015, we underlined our global scale with unit sales across the Alliance of 8.5 million units.
As previously announced, the Renault-Nissan Alliance is on track to deliver annualized synergies of 4.3 billion euro in 2016, reflecting the benefits of our converged functions in areas such as engineering, manufacturing and purchasing. This compares with annual synergies that stood at 1.5 billion euro five years ago.
We also announced a number of new initiatives in the last nine-month period, including plans for a Renault truck based on the Nissan Navarra, which will also be used by our partners at Daimler for a new Mercedes model. And we began construction of the joint assembly plant, next to the Nissan plant in Aguascalientes in Mexico, where Infiniti and Mercedes vehicles will be assembled.

For the nine months ending December 31, overall global industry volumes increased 1.4% to 64.28 million units. Nissanís overall sales results increased 1.4% - in line with the market - to 3.89 million units in the first three quarters of the fiscal year, as strong growth in North America and Western Europe that out-performed the overall industry was offset by headwinds in other markets.
Looking across the regions….
In Japan, the Total Industry Volume – or TIV – fell by 6.7%, to 3.47 million units, showing the impact of higher sales taxes and mixed consumer confidence. Nissan’s sales decreased 8.2% to 383,000 unit sales, resulting in a market share of 11.0%.
Notwithstanding the overall volume decline in Japan, we are encouraged by the strong demand in the market for the X-Trail, particularly for its hybrid version.
In China, the TIV in the calendar nine months to September 30 increased 1.7% to almost 16.4 million units. Nissan sales increased 1.8% to 859,000 units. For the calendar year, Chinese TIV increased 6.0% to 23.68 million units, while Nissan’s sales reached 1.25 million units, equivalent to a market share of 5.3%. In the fourth quarter alone, our sales increased 17.6% as new product launches contributed to an increased sales momentum. As a result, we achieved the calendar year sales outlook for China announced last November.
Turning to North America: In the US, the TIV increased 5.8% to 13.52 million units. Nissan’s sales volume continuously out-performed the market by increasing 8.3% to 1.12 million units, driven by demand for the Rogue and Altima models. Market share improved 0.2 points to 8.3% in the US. Meanwhile, in Canada, sales were up 13.0% to 104,000 units. In Mexico, unit sales increased 16.9% to 267,000 units for the period and Nissan maintained its number 1 position with a healthy market share of 25.6%. Nissan has been number one in Mexico now for 79 consecutive months.
In Europe, Nissan’s sales increased slightly by 1.1% to 540,000 units and market share decreased slightly to 4.0%. Here I will note that the decline in market share was due to country mix, as market share actually increased in both Europe excluding Russia and Russia – the slight overall drop in market share was due to the decreased weight of the Russian market of total European sales. In Europe excluding Russia, TIV increased strongly with unit volumes reaching 12.29 million units. Nissan saw retail sales volumes reach 450,000 units in the period, and our market share improved slightly to 3.7%. For the calendar year, Nissan was the number one Asian brand in the European Union. The Nissan LEAF is also the highest selling EV in the European market of all time.
In Russia, the weakening of the ruble and economic uncertainty has undermined demand in this market. Nissan’s sales decreased 32.7% to 90,000 unit sales, equivalent to a 7.4% market share.
In other markets – including ASEAN, Africa and Latin America – economic conditions remained volatile. Nissan’s sales volumes declined to 619,000. Asia and Oceania volume was down 1.5% at 263,000 units. Latin America fell 7.9% to 130,000 units, Middle East fell by 10.5% to 151,000 units and sales in Africa increased by 1.3% to 75,000 units.

Under the equity accounting method for our joint venture in China, consolidated net revenues increased by 854.5 billion yen to 8.94 trillion yen, primarily driven by growing unit sales in the US and Western Europe and the impacts of foreign currency translation.
Consolidated operating profit totaled 587.5 billion yen, yielding a 6.6% operating margin. Net income was 452.8 billion yen, up 33.7% from the same period of fiscal 2014.

Looking at the Operating Profit movement in detail:

  • The 19.8 billion yen favorable impact from foreign exchange came from the continued correction of the yen against the U.S. dollar, offset by the movement of emerging currencies.
  • Cost items including purchasing cost reduction efforts, lower raw material costs and product enrichment resulted in net savings of 142.3 billion yen.
  • Volume and mix produced a positive impact of 131.0 billion yen.
  • The increase in marketing and selling expenses resulted in a 88.1 billion yen negative movement.
  • R&D expenses increased by 2.7 billion yen.
  • Manufacturing expenses increased by 10.2 billion yen, and
  • Other items had a negative impact of 22.5 billion yen.

At the end of the period, Nissan continued to be in an automotive net cash position of 1.4 trillion yen, compared with 1.2 trillion yen at the end of December 2014.
On a management pro forma basis, which includes the proportionate consolidation of results from Nissan’s joint venture operation in China, revenues for the fiscal nine month period rose 10.5% to 9.72 trillion yen. Operating profit was up 32.1% to 682.6 billion yen, resulting in an operating margin of 7.0%. Net income rose 33.7% to 452.8 billion yen.

Based on our nine-month performance and our outlook on market conditions for the remainder of the fiscal year, we are maintaining our prior financial forecasts for the 12 months ending March 31, 2016.
Here, we expect solid demand for new models and the encouraging momentum in North America and Western Europe combined with continued cost efficiencies to offset unfavorable market and foreign exchange conditions primarily in emerging markets.
The benefits of our product offensive, our financial discipline and our Alliance synergies mean that Nissan can continue to execute on its plan and progress towards the Power 88 goals.

We also expect to generate strong positive free cash flow and remain committed to the dividend payment of 42 yen for the fiscal year. As previously announced, Nissan will maintain a minimum 30% payout ratio to net income during the remainder of the mid-term plan.
In conclusion, Nissan continues to deliver on its Power 88 strategy and remains committed to improving our business performance. Despite challenging overall market conditions, the lessening of the yen/US dollar exchange rate, volatility in commodities and unfavorable foreign exchange rates from emerging markets, we remain on track to achieve another year of solid profitable growth.

*As of the beginning of fiscal year 2015, “net income” means “net income attributable to owners of the parent”.

# # #