May 12, 2016

Fiscal Year 2015 Full-year Financial Results
Media Conference
Carlos Ghosn, President and CEO, Nissan Motor Co., Ltd.

Nissan delivered a solid performance in 2015.
For Fiscal 2015, Nissan is reporting solid financial results despite challenging market conditions which included negative foreign exchange movements and slowing or declining sales in some regions, particularly in emerging markets.
Strong results in North America, and solid demand in Western Europe, helped Nissan generate consolidated net revenues of 12.2 trillion yen and operating profit of 793.3 billion yen for the 12 months ending March 31st, 2016. This represents an operating profit margin of 6.5%.
Net Income rose 14.5% to 523.8 billion yen – this is after recording an extraordinary pre-tax charge of 91 billion yen related to potential airbag recall costs.
We generated automotive free cash flow of 481.2 billion yen. As a result, Nissan ended the period with a net cash position of 1.5 trillion yen from its automotive operations.

In fiscal 2015, total industry volumes reached 87.15 million units, a global increase of 2.1%. Nissan performed in line with the industry, with sales rising to 5.42 million units, up from 5.32 million in the previous year. Our market share was stable at 6.2%.
In Japan, total industry volumes fell by 6.8% to 4.94 million units.
Nissan saw unit sales decline by 8.1% to 573,000, equivalent to a market share of 11.6%. Our performance in Japan was impacted by weak consumer confidence and an ageing overall product line-up.
In the coming year, we will refresh some core models. We anticipate this will help strengthen our volumes and market share, building on the success of models such as the X-Trail.
In China, where our sales are calculated on a calendar-year basis, TIV was up 6.0% to 23.68 million units.
Nissan unit sales increased 6.3% to 1.25 million units, representing a market share of 5.3%, amid solid demand for models including the X-Trail and Sylphy.
In North America, Nissan achieved record sales. TIV in the U.S. was up 5.2% at 17.6 million units. Nissan’s sales rose by 8.4% to 1.5 million units, equivalent to a market share of 8.6%.
This performance reflected rising demand for both Altima and Rogue, of which we sold 332,000 units and 292,000 units respectively. There was also a positive reception for the new Maxima and Titan full-size pickup truck.
In Canada, Nissan outperformed the market as unit sales rose 13.3% to 134,000 units, equivalent to a market share of 6.9%.  
In Mexico, Nissan maintained its number-one position with sales rising by 15.3% to a new record of 358,000 units, equivalent to a leading market share of 25.7%.
In Europe including Russia, Nissan’s sales were flat at 754,000 units. Excluding Russia, Nissan sales rose by 9.4% to 637,000 units. This performance was driven by continued strong demand for crossovers such as Qashqai, and we signaled our ambitions in the European premium sector with the launch of the Infiniti Q30.
The popularity of these models helped Nissan become the number one Asian brand in the European Union. The new NP300/Navara pick-up was named International Pickup Truck of the Year for 2015 in Europe.
In Russia, economic uncertainty and the weakening ruble continued to negatively impact our performance. Nissan’s sales decreased 32.6% to 116,000 units, although we maintained our market share at 7.6%.
In other markets, TIV fell by an estimated 4.8% to 19.19 million units.  Nissan’s sales in these other markets decreased by 5.9% to 835,000 units, due mainly to volatile demand and adverse currency movements.
Unit sales in Asia and Oceania decreased slightly to 357,000 vehicles. Sales in Latin American fell by 6.7% to 171,000 units, and sales in the Middle East were down 12.4% to 208,000 units. Sales in Africa decreased 4.1% to 99,000 units.
Our expansion plans for Infiniti continued, with encouraging demand for newly launched models.
Unit sales increased by 15% to 218,000 vehicles, with new records achieved in several markets following the introduction of new models including the Q50, QX60 and the Q30: the first Infiniti model assembled in Europe.

Moving to our financial results: as with previous quarters, Nissan is presenting its financial performance under the equity accounting method for our joint venture in China.

On this basis:

  • Consolidated net revenues increased by 814.3 billion yen to 12.19 trillion yen, driven by higher unit sales and the impact of currency translation on overseas revenue.
  • Consolidated operating profit totaled 793.3 billion yen, an increase of 34.6%, yielding a 6.5% operating margin.
  • In this fiscal period, we booked a 129.4 billion net extraordinary loss, mainly reflecting an accounting provision related to vehicle recalls involving air bags.
  • Net income was 523.8 billion yen, up 14.5% from fiscal year 2014.

Looking at operating profit movements in detail:

  • The 13.3 billion yen negative impact from foreign exchange rates came mainly from emerging market currencies.
  • Cost items including purchasing cost reduction efforts, lower raw material costs and product enrichment resulted in savings of 223.6 billion yen.
  • Volume and mix produced a positive impact of 113.3 billion yen.
  • The increase in selling expenses resulted in a 72.4 billion yen negative movement.
  • R&D expenses increased by 24.4 billion yen.
  • Manufacturing expenses increased by 19.7 billion yen,  and
  • Other items had a negative impact of 3.4 billion yen.

At the end of the period, our net automotive cash position was 1.503 trillion yen, compared with 1.39 trillion yen at the end of March 2015.
On a management pro forma basis, which includes the proportional consolidation of our Chinese joint venture:

  • Net revenues rose to 13.4 trillion yen.
  • Operating profit increased to 935.5 billion yen.
  • Net income rose to 523.8 billion yen.
  • Automotive free cash flow was 497.6 billion yen,
  • And we ended the period with automotive net cash of 1.65 trillion yen.

The results represent a significant improvement over the pro forma figures from fiscal year 2014.

  • Net revenues increased 7.7%.
  • Operating profit rose by 30.2%
  • Our operating profit margin improved to 7.0%.
  • And net income increased 14.5%.

These figures provide a solid base as we follow the path toward our Power 88 goals.

Nissan has entered the final period of its Power 88 mid-term plan in a position of strength.
Although our targets are demanding, we have made significant progress since we launched the strategic plan five years ago. Our annual sales have increased by more than 1.2 million units to 5.4 million.
A combination of increased demand and continued efficiency helped lift operating profit, on a management pro forma basis, by 74.0% over a five-year period to 935.5 billion yen for the latest fiscal year. Over the same period, our total assets grew 67.9% to 18.0 trillion yen.
This contributed to automotive free cash flow that increased from 459.3 billion yen to 497.6 billion yen. We ended the last fiscal year with net cash of 1.65 trillion yen, compared with 293.3 billion yen at the end of fiscal 2010.
In the first year of our plan, we were the first Japanese carmaker to recover from the 2011 earthquake, which was a testament to the hard work and the ability of our Japanese manufacturing and supply-chain teams to deal with crises.
During the first half of the plan, we were challenged by various factors including heavy capital expenditure as we added six new plants and the fall-out from the territorial dispute between China and Japan.
In the second half of the plan, our operating margin rose to 7% as we focused on delivering our product offensive and maximizing efficiencies. This illustrates that we are on the right path toward our Power 88 goal of a sustainable 8% operating profit margin.
Nissan has successfully navigated a challenging period in the global markets by continuing to launch strong new products and by relentlessly improving efficiency.
In Japan, we are refreshing some core models, notably with the launch of a new compact car featuring our latest electric vehicle powertrain. This new electric vehicle will meet consumer demand for greater autonomy and fuel efficiency, utilizing a new “e-Power” system that matches the agility, quietness, strong acceleration and efficiency of the Nissan LEAF.
During the year, we will also launch our latest generation autonomous drive technology in Japan, known as Pro Pilot. This system will build on our existing forward emergency braking technologies by offering automated single-lane controls, making driving safer and more efficient. It will be launched initially in Japan and subsequently in the US, Europe and China.
In China, our line-up has been strengthened by the launch of the new Sylphy, which was followed last month by the introduction of the Maxima.
As part of this product offensive, we are targeting 1.3 million unit sales in the current calendar year. We expect sales to be enhanced by demand for the recently launched Lannia, the refreshed Sylphy, the all-new Maxima and the all-new Tiida.
Towards the end of 2016, we will also launch the all-new Venucia T90, the eighth model under our joint venture brand with Dongfeng.
We plan to equip 80% of our future joint-venture models with i-safety features, which will include technologies such as Forward Emergency Braking, Blind Spot Warning, Lane Departure Warning and Driver Attention Alert. 
These efforts reflect Nissan’s commitment to delivering Intelligent Mobility in China, where such technologies are being developed in a far-reaching collaboration with Tsinghua University.
Together, these initiatives underline Nissan’s ongoing ambition to become the number-one Japanese car manufacturer in China.
In the US, Nissan was the only major brand to gain market share – an achievement fueled by the popularity of the Altima and Sentra, and encouraging demand for models including the Rogue.
In fiscal 2016, we expect to see the full benefit of recently-launched products such as the all-new Maxima and all-new Titan full-size pick-up.
The Titan line-up will be enhanced with models equipped with V8 and V6 gasoline engines, new cab offerings and an all-new, shorter chassis for the lighter half-ton. And we will continue to expand in the premium segment with the Q60 and QX30 from Infiniti.
In Europe, where Nissan is the number one Asian brand, we will begin production later this year of the new Micra. It will be assembled for the first time at a Renault plant, in Flins in France.
Expansion of the Infiniti brand is continuing. Building on the successful launch of the Q30, assembled in the UK, we will introduce the QX30, a premium crossover that will go on sale later this year.
In recent weeks, we underlined the importance of our development in Latin America by revealing the production version of the Nissan Kicks, a new compact SUV. The model will go on sale in Latin America this year, followed by other markets around the world.
The Kicks, which was jointly designed in Brazil, Japan and the US, is aimed at the growing market for smaller sports utility and crossover vehicles.
In the premium segment, we enjoyed a record-breaking year at Infiniti as global sales rose 15% to 218,200 units. Infiniti is nearing an inflection point, as its product offensive and market expansion continues.
The all-new Q60 sports coupe, to be launched in fiscal 2016, will deliver 400 horsepower from a new 3-liter, twin-turbocharged V-6 engine. We will also launch the QX30 active crossover this summer, aimed at a new generation of premium customers – initially in Europe, and then in the US and China.
2016 will also be a pivotal year for Datsun. We are enhancing and expanding the product line-up with the introduction of the Datsun redi-GO, the first urban-cross aimed at the Indian market.
This is the third new Datsun introduced in India, and the fifth model launch since we reintroduced the Datsun brand two years ago. We have now passed cumulative sales of 150,000 units in our four Datsun markets of India, Russia, South Africa and Indonesia.
Importantly, the last Datsun model also uses the latest CMF-A architecture from the Renault-Nissan Alliance and an efficient new engine.
Our product offensive across every brand and geography must be aligned with cost efficiency throughout our operations.
Our Common Module Family is central to this efficiency drive, which helps to remove complexity, harness modular systems and reduce overall costs. The first benefits were seen in the C-segment with the Qashqai, Rogue and X-Trail. This approach is now being used in small cars, with Datsun and Renault sharing architecture for the respective redi-Go and Kwid models in the A-segment.
In addition to the benefits from shared platforms, we will enhance cost efficiency through deepening of supplier co-operation, improved product planning and additional regional localization.
Alongside cost-management, we will optimize our revenues in a number of areas. Our sales and marketing teams will continue to manage variable marketing expenses tightly, and we will inject more robustness into the schedule and timing of product introductions.
We are also taking steps to reduce our exposure to the fleet and rental segments, and to improve our product mix towards higher-priced models.
These measures will coincide with a greater focus on sales finance – aligned with sales and marketing – to help build customer retention and brand value.
At the same time, we will increase focus on aftersales by harnessing big-data analysis, personalizing accessories, and upgrading vehicles in areas such as connected car options.
All these measures are part of enhancing our customers’ experience.
We want our customers to have greater awareness and positive opinions about our brands. So we are making the dealership experience more rewarding and improving the design and look of our retail outlets.
Stronger brands and customer appeal are linked closely to innovative marketing campaigns, particularly in the performance segment where the appeal of our NISMO-badged vehicles and the new GTR symbolize Nissan’s exciting innovation.
Nissan is one of the world’s most valuable brands, ranking among the top 50 global brands according to the Interbrand league table.
Nissan’s brand visibility will rise further with our sponsorship role at the 2016 Olympics and Paralympic summer games, which will be watched by an estimated audience of 5 billion around the world.
This will build on other sponsorship activities including partnerships with the European Champions League and International Cricket Council.
We are driving ahead with our “Intelligent Mobility” vision, which will streamline our efforts to deliver Electric Vehicles, Autonomous Drive, and Connected Vehicles…as well as other cutting-edge products.
In electric vehicles, we created the zero-emission segment five years ago with the launch of the all-electric Nissan LEAF, of which we have now sold more than 200,000 units worldwide.
The 2016 LEAF model will be enhanced by a new 30 kilowatt battery that will extend its driving range by more than 20%. This extended range and the growing availability of fast-charging locations in leading markets will enable more zero-emission journeys.
By the end of the decade, Nissan plans to offer more connected cars, introducing systems and features that will make driving safer, more productive and enjoyable. By 2020, the Renault-Nissan Alliance plans to launch more than 10 models with autonomous drive technologies.
The strategic cooperation with our partners enables Nissan to reduce costs and enhance synergies in areas such as engine development and shared vehicle architectures. This is symbolic of the shared economies of scale that we can achieve with partners such as Daimler.
The bedrock of our Alliance strategy is our 17-year partnership with Renault.
Together, Renault and Nissan generated 2.87 billion euros in cost savings and new revenue in 2013. Synergies accelerated with the 2014 launch of “convergence” projects in key business units.
Renault-Nissan synergies topped 4 billion euros in 2015 and will continue to increase as we implement convergence in purchasing, manufacturing and logistics, engineering and human resources. We are targeting 5.5 billion euros by fiscal 2018.
These synergies will be achieved through efficiencies on the cost side and shared revenue opportunities from assets such as the Common Module Family with Renault.
The Renault-Nissan Alliance will also be an important platform for our expansion in autonomous drive technologies.
Earlier this afternoon, we announced a strategic alliance with Mitsubishi Motors with the proposed acquisition of a 34% stake.
Pending regulatory and shareholder approval, this important step will lift global unit sales from the Alliance to more than 9 million units a year and deliver significant synergies in production, technologies, engineering, new models and ASEAN markets.

We anticipate that total industry volumes will increase by 2.6% to 89.4 million units. Our global retail volumes are expected to rise by 3.3% to 5.60 million units, driven primarily by growth in China and North America. Nissan’s global market share is forecast to reach 6.3%.
Nissan has filed the following full-year forecast with the Tokyo Stock Exchange, using a cautious foreign exchange rate assumption of 105 yen to the dollar. We are forecasting net revenues of 11.8 trillion yen for the 12 months ending March 31, 2017. Operating profit is targeted to reach 710.0 billion yen – representing a margin of 6.0%. Net income is expected to reach 525 billion yen.
To achieve this operating profit figure, we are predicting:

  • A 60 billion yen positive impact in revenue;
  • An 111.7 billion yen improvement from Monozukuri and other measures;
  • This is likely to be offset by a 255 billion yen negative impact for foreign exchange.

On a management pro forma basis, we are anticipating net revenues of 13.0 trillion yen for the 12 months ending March 31, 2017. Operating profit is forecast to reach 860 billion yen and net income is predicted to be 525 billion yen.
Nissan will maintain a progressive dividend policy reflecting our profitability and solid free cash flow generation. This enables us to increase the full year dividend by 14.3% to 48 yen per share. And we are maintaining our commitment to a minimum pay-out ratio of 30%.
We have also increased our total shareholder returns with the buy-back, announced in February, of 300 million shares or up to 400 billion yen throughout this year.

In conclusion, Nissan has delivered solid financial results for fiscal 2015 despite challenging conditions in several markets and recent unfavorable currency movements.
These challenges were offset by strong revenue generation in important markets such as North America.
This performance gives us confidence that Nissan has the underlying strength, the right products, the strategic focus and the discipline in execution to deliver on our goals.
We are continuing to target the demanding objectives of the Nissan Power 88 mid-term plan. We have started the current fiscal year with good momentum. This gives us confidence that Nissan will deliver a solid underlying performance in the year ahead. However, we are adopting a cautious approach to foreign exchange rates volatility, reflecting continued uncertainty in global markets.
Despite currency headwinds, we expect to deliver creditable earnings, solid free cash flow generation and robust shareholder returns.

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