November 8, 2017

Fiscal Year 2017 First-half Financial Results
Nissan Motor Co., Ltd.
Hiroto Saikawa, Chief Executive Officer

*Remarks Prepared for Delivery*

Good afternoon and thank you for joining us.

Today, I will outline our headline figures, our global sales performance and financial results for the six months ending September 30th, 2017. I will then share details on our ongoing mid-term plan.

For the six-month period to September 30th, we achieved year-over-year growth in unit sales, revenue and market share. While underlying operating profit is in-line with the previous year, today’s reported operating profit includes the adverse impact of special items related to the recent final vehicle inspection issues in Japan and litigation settlement costs related to Takata in the US.

For the half, consolidated net revenues were 5.65 trillion yen. Operating profit totaled 281.8 billion yen, which equates to an operating margin of 5.0%. Net income totaled 276.5 billion yen, which represents a 4.9% net margin. Free cash flow for the automotive business was 239.7 billion yen and we ended the period with an automotive net cash position of 1.76 trillion yen.

Next, I will briefly highlight our sales performance.


During the six months ending September 30th, global total industry volumes – or TIV – reached 45.55 million units, an increase of 1.9%.

Nissan’s total unit sales were 2.73 million units, an increase of 4.6% over the same period of fiscal year 2016.

Global market share increased by .2% to reach 6%.

In Japan, TIV rose by 7.7% to 2.48 million units. Nissan saw its overall retail volume increase by 34.1% to 283 thousand units. Our strong performance reflected a 17.1% increase in registered car sales to 193 thousand units amid solid demand for the Serena and Note e-POWER.

We also saw a 93.9% jump in mini car sales to 90 thousand units following the resumption during the second half of last year of the Dayz and Dayz Roox minicars.

As a result, our market share increased by 2.2 points to 11.4%.

In China, where our sales performance is measured on a calendar-year basis, first half TIV was up 2.1% to 12.6 million units.

Nissan’s sales increased 6.7% to 651 thousand units, representing a market share of 5.2% for the half.

As China is reported with a three month-lag, we also have the sales figure for the third quarter. For the July to September period, our sales outpaced the market and increased 15.7% to 369 thousand units, as we saw encouraging sales of the X-Trail and Sylphy.

In North America, TIV decreased 1.5% to 10.74 million units. Nissan’s sales decreased 1.3% to 1.035 million units.

In the US, TIV was down 2.1% at 8.84 million units. Nissan’s sales decreased slightly by 0.4% to 779 thousand units, resulting in a market share of 8.8%, primarily driven by strong demand for the Rogue and Rogue Sport.

In Canada, sales rose by 8.6% to 81 thousand units, resulting in a market share of 6.9%.

In Mexico, although sales fell 8.9% to 174 thousand units, we widened the gap with the number two automaker and remained the market leader for the one hundredth month in a row with a market share of 23.9%.

In Europe, including Russia, our sales rose 3.6% to 375 thousand units. The refreshed Qashqai and new Micra contributed to this improvement. Market share was flat at 3.8%.

Excluding Russia, sales rose by 2.1% to 326 thousand units, which resulted in a market share of 3.6%.

In Russia, the market continued to show signs of recovery after a prolonged period of economic uncertainty. Our sales rose 15.1% to 49 thousand units and our market share was 6.1%

In other markets, our sales increased by 2.3% to 390 thousand units due mainly to an upturn in Latin America and Africa and other markets. Models such as the Datsun redi-GO and the Nissan Kicks drove part of this improvement.

Unit sales in Asia and Oceania decreased 2% to 165 thousand vehicles. Latin American sales rose 12.2% to 94 thousand units. Sales in the Middle East decreased 4.8% to 86 thousand units. Sales in Africa and others totaled 46 thousand, an increase of 15.6%.


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.

For this first half, we are showing like-for-like comparisons excluding contributions from our divestiture of our equity stake in Calsonic Kansei last year.

  • Consolidated net revenues in the first half totaled 5.65 trillion yen.
  • Operating profit was 281.8 billion yen, which equates to an operating margin of 5.0%.
  • Net income was 276.5 billion yen, which represents a 4.9% net margin.

On a like-for-like basis, our operating profits were relatively flat at 322.6 billion yen, after excluding the impact of last year’s divestiture of our equity stake in Calsonic Kansei – and before accounting for special items in the first half.

Including special items, specifically the recent final vehicle inspection issues in Japan and the settlement of US class action lawsuits related to Takata, our operating profit was 281.8 billion yen for the half.

Looking at the second quarter operating profit movement,

excluding the special items for the inspection issues in Japan and the settlement of class action lawsuits, operating profit for the quarter would have improved by 9.2% to 169.3 billion yen. Including the special items, operating profit was 128.5 billion yen for the quarter.

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

  • Net revenues increased to 6.22 trillion yen;
  • Operating profit was 351.1 billion yen;
  • Net income was 276.5 billion yen;
  • Automotive free cash flow was 273.7 billion yen; and
  • We ended the period with automotive net cash of 1.96 trillion yen.

Relative to our outlook for the full fiscal year, we are revising our operating profit guidance downward from 685 billion yen to 645 billion yen to reflect the expected net impact related to the final vehicle inspection issue in Japan after other cost efficiency offsets. Notwithstanding the reduction in operating profit guidance, we are maintaining our previous net revenues and net income guidance.

As we look forward to the remainder of the fiscal year, a number of challenges and opportunities exist. The challenges include the operational as well as the ultimate financial impact from the Japan vehicle final inspection issue, the potential for continued lower than previously expected market TIVs in some key markets such as the US, rising industry incentives levels, and the pace of raw material price increases. On the flip side, opportunities include further cost efficiencies, the recent positive sales trends in China, improved profitability in our aftersales and sales finance businesses, and an easing of the FX headwinds. We are committed to working hard to offset the challenges by taking full advantage of the opportunities.

Moving to shareholder returns, for the 2017 fiscal year, we continue to project a full year dividend of 53 yen per share, a 10.4% increase versus the prior year level. This morning, our Board approved payment of an interim dividend of 26.5 yen per share to be made on November 22, 2017.


In summary, we have delivered steady underlying business performance and financial results despite strong headwinds in the first half and the recent disruption in Japan caused by the final inspection issue at our domestic plants.

We remain committed to growing our business in a sustainable way to deliver solid earnings, positive automotive free cash flow, and attractive shareholder returns.


Now, I would like to discuss the new midterm plan that started from this fiscal year. I will introduce the overall framework today, and I would like to discuss details later, at the appropriate time.

The mission of this midterm plan is to harness the full benefits of the Alliance and deliver growth and evolution building on the foundation that we established during Nissan Power 88. The plan describes our strategy to deliver on this mission over the next six years.

There are two key goals.

The first one is to achieve steady growth while ensuring healthy profitability and solid free cash flow.

The second one is to lead the automotive industry in terms of new technologies and business expansion, backed by Nissan’s technology DNA.

Over the next 10-15 years, we foresee significant changes in the automotive industry, including technological innovations, changing markets and evolving customer expectations.

This six-year plan was designed to guide the company toward growth and to prepare for further growth beyond the plan as the evolution continues.
The name of the new midterm plan is “Nissan M.O.V.E. to 2022.” It expresses that Nissan will keep on moving and evolving toward the future.

It stands for the following drivers:

  • Future Mobility
  • Operational excellence
  • Delivery of Value to customers
  • Electrification

With regard to sustainable growth, we will maintain an 8% operating margin while growing revenues from 12.8 trillion yen to 16.5 trillion yen. In addition, we will generate a cumulative 2.5 trillion yen of automotive free cash flow over the next six years.

The pillars that will support this growth are:

  • Steady growth in the main markets that sustain our business
  • Solid profits and growth in Japan, China, the U.S., and Mexico.

In addition, giving importance to increasing revenues, we will also focus on aftersales and the sales finance area.

We will also get a return on our investments in Brazil, Russia, India, and Argentina, as well as the INFINITI and Datsun brands, where full growth and benefits are yet to be realized.

Finally, we will capture the full potential of our brands and close the gap with market leaders by driving growth in Europe, the Middle East, and ASEAN. We will also leverage our strengths in large SUVs and pickup trucks to boost our business.

In order to sustain an 8% profit margin, we will continue working on revenue optimization and TdC (Total Delivery Cost) improvements, while making investments with appropriate control over fixed costs.

This is the overall framework to ensure steady growth.

Nissan also intends to take a lead in new technologies and businesses. Electric vehicles, autonomous driving, connectivity and new mobility services are examples of coming changes. We are turning these changes into opportunities to accelerate the evolution of our technologies and business.

Nissan will maintain its EV leadership. We are introducing cutting-edge autonomous driving technologies before anyone else, and we will be an early provider of mobility services delivered by autonomous cars, ahead of the rest of the industry.

In all areas, Nissan will lead the evolution by introducing new technologies and new products through Nissan Intelligent Mobility, the core of our brand strategy.

Fully leveraging the benefits of the Renault-Nissan-Mitsubishi Alliance will be essential to developing these technologies. While the Alliance provides the blocks for technology development, the Nissan, INFINITI, and Datsun brands will build on them to deliver advanced products and services with value to customers through each business.

Thank you.

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