July 27, 2017

Fiscal Year 2017 First-quarter Financial Results
Nissan Motor Co., Ltd.
Joji Tagawa, Corporate Vice President

For the First Quarter of Fiscal 2017, Nissan is reporting satisfactory results despite rising raw material costs, lower industry volumes in the US and slower than expected growth in China and the Middle East. Our performance in Europe was also impacted by the timing of model changeovers.

These negative issues offset healthy demand in Japan and continued cost efficiencies in our business. Overall, results were in line with our expectations.
For the three-month period to June 30th, consolidated net revenues were 2.76 trillion yen. Operating profit totaled 153.3 billion yen, which equates to an operating margin of 5.6%. Net income was 134.9 billion yen, which represents a 4.9% net margin. Free cash flow for the automotive business was 112.6 billion yen and we ended the period with an automotive net cash position of 1.646 trillion yen.


Turning to our sales performance, during the three months ending June 30th, global total industry volumes or TIV reached 23.21 million units, an increase of 1.8%.

Nissan's total unit sales were 1.351 million units, an increase of 5% due primarily to the positive growth in Japan. Our global market share rose by 0.2 points to 5.8%.

In Japan, TIV rose by 11.8% to 1.20 million units. Nissan saw unit sales rise by 45.6% to 131 thousand units, resulting in a market share improvement of 2.6 points to 10.9%.

Conditions continued to improve following the resumption of Kei car sales and strong demand for registered vehicles, including recently launched models such as the Note e-POWER and the new Serena with ProPILOT autonomous drive technology. As we move through the balance of the year, we expect to improve our market performance with new models including the recently launched refreshed X-Trail with ProPILOT autonomous drive technology in June and the all-new Nissan LEAF, which will be unveiled in September.

In China, where our sales performance is measured on a calendar basis, Q1 TIV was up 5.2% to 6.64 million units. Nissan's sales increased 5.3% to 314 thousand units, representing a market share of 4.7% for the quarter. The increase in sales was due primarily to the Qashqai and Sylphy.

As China is reported with a three month-lag, we also have the sales figures for the Q2 period. TIV decreased 1.2% to 5.96 million units and our sales increased 8.0% to 336 thousand units and our market share was 5.6%. For the six-month period to the end of June, TIV increased 2.1%, while our sales increased 6.7% to 650 thousand units.

In North America, TIV decreased 2.1% to 5.40 million units. Nissan outperformed the market with unit sales of 532 thousand units, an increase of 0.6%.

In the US, TIV was down 3.0% at 4.42 million units. Nissan's sales increased 1.2% to 403 thousand units, equivalent to a market share of 9.1%. The increase in sales reflected continued demand for our SUVs, particularly the Rogue and recently launched Rogue Sport.

In Canada, Nissan's unit sales were up 4.6% to 41 thousand units. Market share was flat at 6.7%.

In Mexico, Nissan's unit sales decreased 3.7% to 88 thousand units. But we maintained our number-one position with a market share of 24.1%.

In Europe, including Russia, Nissan's sales totaled 185 thousand units, an increase of 1.1%. Excluding Russia, Nissan's sales decreased 0.2% to 162 thousand units. Market share was flat at 3.4%. This performance was expected as we prepared for model changeovers of the Qashqai and X-Trail. We expect sales to improve as a result of the introduction of the refreshed Qashqai and the X-Trail at the end of the quarter and in July, respectively.

In Russia, Nissan's sales increased 10.8% to 23 thousand units, resulting in a 5.9% market share.

In other markets, Nissan's sales increased 1.2% to 188 thousand units despite volatile demand in some markets. Other than the Asia & Oceania region, Nissan outperformed the market.

Unit sales in Asia and Oceania decreased 1.2% to 83 thousand vehicles. Sales in Latin America were up 14.0% to 43 thousand units and sales in the Middle East were down 5.8% to 42 thousand units. Sales in Africa and others rose by 1.9% to 20 thousand units.


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 totaled 2.76 trillion yen.
  • Operating profit totaled 153.3 billion yen, which equates to an operating margin of 5.6%.
  • Net income was 134.9 billion yen, which represents a 4.9% net margin.

Looking at the operating profit movement in further detail:

  • We have adjusted for the 6.1 billion yen impact from the divestiture of Calsonic Kansei.
  • FX had a negative impact of 2.1 billion yen,
  • Raw materials had a negative impact of 19.0 billion yen,
  • Volume and mix produced a positive impact of 18.1 billion yen,
  • The increase in marketing and selling expenses resulted in a negative impact of 50.8 billion yen,
  • Cost items including purchasing cost reduction efforts and product enrichment resulted in net savings of 48.2 billion yen,
  • R&D and manufacturing expenses combined increased by 7.1 billion yen, and

On a management pro forma basis, which includes the proportionate consolidation of our Chinese joint venture, our key indicators showed that:

  • Net revenues totaled 3.03 trillion yen for the quarter,
  • Operating profit was 185.7 billion yen, which equates to an operating margin of 6.1%,
  • Net income totaled 134.9 billion yen,
  • Automotive free cash flow was 128.3 billion yen, and
  • We ended the period with automotive net cash of 1.825 trillion yen.


In summary, Nissan delivered satisfactory results for the quarter despite rising raw material costs, lower industry volumes in the US, slower than expected growth in China and the Middle East, and the impact of planned model changeovers in Europe.

We have been encouraged by the improved performance in Japan and the positive reception in the current quarter to recently launched products.

Going forward, we anticipate improving demand in several key markets given the impact from recently launched and new models. These include the recently launched Rogue Sport in the US, as well as the Kicks, Navara, X-Trail and Venucia M50V in China. We also introduced the refreshed Qashqai and X-Trail in Western Europe, where previous models have been best-sellers. In Japan, we recently launched the new X-Trial with Pro-Pilot autonomous drive technology and the all-new LEAF will be unveiled in September.

We also expect continued and growing benefits from our Alliance with Renault and Mitsubishi Motors. The Alliance recently announced a 16% increase in 2016 synergies to 5 billion euros, and we are seeing encouraging synergy gains from our collaboration with Mitsubishi Motors, particularly in the ASEAN region.

We continue to maintain our focus and strict cost discipline, which will result in further operational efficiencies during the remainder of the year. Although we face market uncertainty and rising raw material costs, we expect to deliver solid earnings and free cash flow generation in fiscal 2017. Last month, S&P Global Ratings upgraded Nissan's Long Term and Short term ratings 1 notch to A and A-1, respectively, based on their favorable view of Nissan's profitability and stability resulting from improved brand recognition and product competitiveness in key markets as well as its demonstrated cost efficiency. For the full fiscal year, we are maintaining our previous guidance and we continue to project a full year dividend of 53 yen per share, a 10.4% increase from the prior year.

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