May 11, 2017

Fiscal Year 2016 Full-year Financial Results
Media Conference
Hiroto Saikawa, President and CEO, Nissan Motor Co., Ltd.


For Fiscal 2016, Nissan delivered solid financial results despite challenging foreign exchange conditions.

  • Nissan generated consolidated net revenues of 11.72 trillion yen and operating profit of 742.2 billion yen for the financial period.
  • This represents an operating profit margin of 6.3%.
  • Net income rose 26.7% to 663.5 billion yen.
  • We generated automotive free cash flow of 677.1 billion yen.
  • Before accounting for our investment in Mitsubishi Motors and the proceeds from the divestiture in Calsonic Kansei, free cash flow reached 817.1 billion yen, nearly doubling from the prior year. Our ability to generate cash has significantly improved.
  • Nissan ended the period with a net cash position of 1.64 trillion yen from its automotive operations.

Although our net revenues and operating profit decreased due to challenging foreign exchange rates, we achieved a healthy financial result. Our business has grown, and efficiency has also improved.

On a constant currency basis, net revenue rose to 12.98 trillion yen from 12.19 trillion yen in fiscal 2015, and operating profit increased to 1.02 trillion yen – representing an operating profit margin of 7.9%.


Our business efficiency, including marketing and sales and cost reduction, rose 29.1%, but it was not enough to offset the negative impact of forex.

Without the adverse impact of foreign exchange, the full-year operating profit was 1.02 trillion yen. The 12-month impact of FX was 281.9 billion yen, although the currency headwinds eased in the fourth quarter. After FX movements, the operating profit was 742.2 billion yen.

Under the equity accounting method for our joint venture in China:

  • Nissan's consolidated net revenues deteriorated by 3.9% to 11.72 trillion yen.
  • Net income was up 26.7% from fiscal year 2015, at 663.5 billion yen.

On a management pro forma basis, which includes the proportional consolidation of our Chinese joint venture:

  • Net revenues fell to 12.84 trillion yen.
  • Operating profit was 882.4 billion yen.

On a constant currency basis, the pro forma management results represent an improvement over the figures from fiscal year 2015.

  • Net revenues increased to 14.33 trillion yen.
  • Operating profit rose from 935.5 billion yen to 1.19 trillion yen, resulting in an OP margin of 8.3%, already achieving our 8% target.


In fiscal 2016, Nissan's sales volume rose 3.7% to 5.63 million units, up from 5.42 million in the previous year.

As stated at our H1 earnings, our sales performance declined slightly in the first half of fiscal 2016, unfortunately. But as I forecast, we sold more than 3 million units in the second half a rise of 7.3% year-over-year in the same period.

Going region by region:

In Japan, Nissan unit sales fell 2.6% to 557,000, equivalent to a market share of 11.0%. Our performance in Japan was impacted by the suspension of Dayz and Dayz Roox sales for part of the fiscal year.

In July, we resumed sales of the Dayz and Dayz Roox, followed in August by the launch of the Serena with ProPILOT, and the November launch of the Note e-POWER. Our second-half sales were healthy.

In the second half, we increased our market share to 12.5% an increase of 0.7 points compared to the same period of the last year.

In China, where our sales are calculated on a calendar-year basis, total industry volume rose 13.2% to 26.9 million units.

Nissan unit sales increased 8.4% to 1.35 million units, representing a market share of 5.0%, amid solid demand for models such as the X-Trail, Sylphy, and more recently, the Qashqai.

While our sales increased overall, total industry volume increased more than our sales. As a result, our market share unfortunately decreased. The main cause was that our local brand Venucia underperformed compared with the high growth of the market.

We are taking steps to correct the situation. In December, we introduced the Venucia T90, and we are already seeing signs of recovery. First-quarter sales in China overcame the growth pace of the market and rose 5.3% to 314,000 units.

In North America, Nissan achieved record sales. In the U.S., Nissan outperformed the market with a 4.2% rise in sales to 1.58 million units, equivalent to a market share of 9.0%.

This performance reflected continued demand for both the Rogue and Altima. Sales of the Titan full-size pickup truck also rose strongly. Despite some forecasts that the U.S. market has peaked, Nissan saw demand maintaining itself in Q4, the first three months of the calendar year. Our leading presence in the crossover segment will enable us to meet rising demand in this segment.

In Canada, unit sales rose 3.0% to 138,000, equivalent to a market share of 7.0%.  

In Mexico, Nissan maintained its number-one position, with sales rising 14.4% to a new record of 409,000, equivalent to a market share of 25.0%.

In Europe, excluding Russia, Nissan sales rose 7.2% to 683,000 units. This performance was driven by continued strong demand for models including the Qashqai SUV and Navara pickup. And at the end of March, we began deliveries of the fifth-generation Nissan Micra.

In Russia, economic uncertainty continued to negatively impact our performance. Nissan’s sales in Russia decreased 19.7% to 93,000 units. Our market share decreased 1.1 points to 6.5%, however, we expect gradual recovery after FY17.

In other markets, Nissan’s sales decreased by 3.3% to 808,000 units, due mainly to volatile demand and adverse currency movements.

Latin America was a bright spot with good momentum for the future, as we outperformed the industry with sales increasing 6.0% to 182,000 units. In the Middle East, while sales were down from last year, our decrease was less than the overall industry.

In Africa and other markets, our sales decreased 10.7%, while TIV rose 6.2%. The increase in TIV is due largely to significant growth in the Iranian market, where Nissan is absent.

Nissan launched important new products during the fiscal year. These included the Note e-POWER and Serena with ProPILOT in Japan, the Infiniti Q60 Sports Coupe, the fifth-generation Micra in Europe, the full-size Armada in the U.S., the Datsun redi-GO in India, the Kicks in Latin America, and the Venucia T90 in China, which contributed to sales in the second half of the fiscal year.

In FY16, we introduced new technologies and new products as part of Nissan Intelligent Mobility, which is the core of Nissan’s brand strategy.

In the area of autonomous drive, we equipped the new Serena minivan in Japan with ProPILOT technology, the first model to be sold with this function. In electrification, we introduced a new form of electric powertrain, called e-POWER, to Note, which has been well received by our customers.

In connected & new mobility services, together with our partner DeNA, we have started preparing for the development and field tests of driverless cars.

And the new Nissan LEAF, to be launched this fiscal year, will also be equipped with ProPILOT technology.

We also enhanced our Alliance strategy over the last 12 months.

With Nissan’s acquisition of a strategic stake in Mitsubishi Motors in October 2016, Mitsubishi Motors became the third member of the Alliance. With this added scale, the Alliance will now sell almost 10 million units per year.

We are on track to deliver synergies in purchasing and logistics, which we expect to be worth 24 billion yen to Nissan in FY17.

In the mid-to-long term, we are also on track with identifying synergies in platform development and cooperation in ASEAN. We recently announced our intention to leverage the assets of Mitsubishi Motors in Indonesia, where Mitsubishi Motors will supply a minivan for Nissan. We will identify and develop additional synergies in several areas in the period ahead.

In order to drive forward our Nissan Intelligent Mobility strategy, we need to establish new partnerships outside the traditional automotive industry. We made progress toward this in FY16.

In addition to our partnership with DeNA, we have begun cooperating with several partners including Microsoft, Transdev and Mobileye. We have also started common development of future technology with NASA in the United States.

The end of Fiscal 2016 marked the end of our Nissan Power 88 mid-term plan. It was a plan that targeted significant growth and investment. Although we couldn’t reach our target of 8% market share, we made progress in several areas.

Since Fiscal 2010 – when we announced Power 88 – our business scale has increased 30% to 40%, including net revenues, annual sales and total assets. And we have succeeded in increasing our business footprint, building the foundation toward further growth in the next mid-term plan.

In terms of reaching an 8% COP margin and the business efficiency to sustain profitability, we experienced difficulty in sustaining our profitability in the first half of NP88 because of significant investments. However, we recovered in the second half of NP88, and our business efficiency has been steadily improving since FY14.

Under stable foreign exchange conditions, we have improved profitability by 1.2 to 1.3 points each year, and we are now capable of achieving 8% COP under certain economic and market conditions.

We have been saying that 8% COP is a commitment and 8% market share is a target. We will continue to strive for the 8% market share during our next mid-term business plan.

Now, I will turn to our agenda for the year ahead.


In FY17, we will work to:

  • deliver steady growth;
  • advance Nissan Intelligent Mobility with new technologies and products, and;
  • leverage synergies from our global Alliance to realize the previous objectives

In FY17, we anticipate that total industry volume will increase by 2.4% to 94 million units.

Our global retail volume is expected to rise by 3.6% to 5.83 million units, supporting our goal of delivering steady growth. We anticipate rising sales in all regions, driven primarily by China and a return to growth in Japan. Nissan’s global market share is forecast to reach 6.2%.

Based on this sales forecast, Nissan has filed the following full-year forecast with the Tokyo Stock Exchange, using a foreign exchange rate assumption of 108 yen to the dollar. We are forecasting net revenues of 11.8 trillion yen for the 12 months ending March 31, 2018.

Operating profit is targeted to reach 685 billion yen, representing a margin of 5.8%. Net income is expected to reach 535 billion yen.

To achieve this operating profit figure, we are predicting:

  • A negative impact related to the absence of Calsonic Kansei contributions;
  • An improvement from monozukuri and marketing & sales will be 195 billion yen in total;
  • An increase in strategic R&D investment for future growth will have a negative impact of 35 billion yen; and,
  • An increase in raw materials will result in a 90 billion yen negative impact.

We believe operating profit will reach 745 billion yen before the FX impact, and 685 billion yen after currency is taken into account.

Nissan will maintain a progressive dividend policy, reflecting our healthy profitability and free cash flow. We are forecasting a 5 yen increase in the full-year dividend to 53 yen per share.

FY17 is also the year we will start our next mid-term business plan. We will announce details later this year, but let me share the outline today.

The theme is to grow steadily and evolve based on the foundation we have built during NP88. Our major objective is to increase net revenues and achieve an 8% COP margin. We plan to expand our revenues from 12.8 trillion yen to 16.5 trillion yen annually. Moreover, we are targeting cumulative automotive free cash flow of 2.5 trillion yen over the six years.

In addition, we aim to achieve 8% market share during the next six years. The key is our business in China. If we can increase our Chinese market share from the current 5% to 8%, we will be able to achieve global market share of 8%, and we are finalizing that plan.

In terms of technologies and business evolution, we see many changes to come in the next six years. We have already started our strategic efforts under Nissan Intelligent Mobility, and this will be an area where we need to leverage Alliance benefits. We are now identifying them together with Renault and Mitsubishi Motors.

The plan will be ready by the end of this fiscal year, and we will announce more details then.

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