Live: Nissan FY2023 first-half financial results announcement

Live: Nissan FY2023 first-half financial results announcement

Welcome everyone to the Nissan Financial results for the first half of fiscal year 2023 media session today thank you very much for joining us today’s attendees are Mr Ida Makoto CEO president and CFO Mr Steven B Mr UA CEO will start with the highlights of the first half Mr UA over to

You ladies and gentlemen welcome to Nissan’s first half results for the six-month period ending September 30th 2023 Nissan’s financial performance for the first half of this fiscally improved significantly from the prior year net revenue increased 30% operating profit was up 115% and net income substantially increased since fiscal year 2020 we have

Been working on the Nissan next business transformation plan the results of our continuous efforts are reflected in our business performance in the current fiscal year which is the final year of the plan now I would like to ask our CFO Mr Steven M to present the results for

The period second quarter and the first half of the fiscal year later I will talk about the outlook for the rest of the year and the status of our China business and insights into key steps we are taking Stevens son the floor is yours thank you J son hello everyone uh

Before I begin let me take a moment to express my gratitude to all Nissan stakeholders for your support looking at the volume in the first half Global retail sales increase by 3.3% year-over-year to 1.62 million units however excluding China we achieved growth over 23.4% which was driven by all regions

With Japan North America and Europe exhibiting double digit growth the rapidly changing automot Market in China remains challenging and retail sales decrease significantly by 34.3% Global Production volume increased by 4.5% we as we continue refilling the pipeline to Serve customer worldwide excluded in China production increased 25.1% looking specifically at the second

Quarter Global retail sales increase by 11% year-over-year to 833 th000 units as gooded in China sales grew 26.5% production volume increased by 4.7% for the quarter this slide shows our key financial performance indicat carries on both the equity basis and China Jo Venture proportional basis for the first

Half on the equity basis net revenue increased by 30% to 6.06 trillion yen operating profit for the period increased to 336.00 and improving to 168.3 billion yen in the operating profit for the half net income total of 296.33 n billion yen net cash for the automotive business

Came in at a healthy level of 1.5 trillion yen which ensures a financial flexibility while investing for the company’s sustainable growth and providing the necessary levels to weather headwinds in this uncertain environment on a proportional basis which includes our China operation net revenue Rose to 6.48 trillion yen from 5.26 trillion yen last

Year oering profit was 3447 billion yen representing operting margin of 5.3% with free cash flow for the automotive business reaching a positive 161.5 billion yen and cash for the automotive business of 1.81 trillion yen as the financial results indicate we continue successfully implement the objectiv set forth on the Nissan Next

Plan and we are on the right track now I will cover the performance of our key markets in Japan retail sales increased 10.7% to 228,000 units thanks to the launch of the new Serena eow in April total sales for Serena increase 62% for the half sakra continues to enjoy great customer

Acceptance and increase by 37.3% in the first half total electrification ratio improved 6 points to 54% furthermore Nissan has been the number one EV seller for 13 consecutive years and for the half net revenue per unit increased by 14% from the prior year production volume increased 38 7%

For the period due to improve supplies in North America retail sales and production volum increased by 39.2% and 35% respectively for the half this growth was primarily driven by a top selling models the Rogue and Central in the us both Mexico market and the infinity brand contribute to the overall sales

Volume growth in North America by in each increasing over 50% in addition production volume in Mexico increased by over 60% our net revenue per unit in the US increased by 3% year-over-year in Europe retail sales grew by 19.3% and production volume increased by 19.4% for the half net revenue per unit increase

19% year-over-year thanks to a strong acceptance of ARA Juke hybrid extra E power and cashy E power electrification ratio increased 25 points to 37% furthermore the leaf was awarded best car for City driver in the UK in China in the first half sales and production volumes continue to be

Significantly impacted in a difficult Market environment we actively manage the relative compe of our products and our retail sales uh total 359,000 vehicle for the January to June period the silie remain uh the top selling model in the I segment as China is reporting on a cter

Year basis we saw that sales decreased 28.9% for the July to September period the China Market continues to fade two major challenges transaction prices for the industry continue Trend downward accelerate pace and the last three months uh over nearly 70 new models from the traditional New makers will launch in the

Market in this period we launched four new models while the initial sales have been softed due to this High number of product launches we are now seeing increased customer interest in our product we will elaborate more in detail later let’s have a look at the income statement for the 6 months ending

September 30th 2023 on an equity basis net revenue increased by 1.4 trillion yen to 6 06 trillion yen and offering profit increased by 18.1 billion yen to 3367 billion yen representing operating margin of 5.6% non-operating income which include equ meta companies total 75.9 billion yen and improved by 35.6 billion yen

Compared to previous fiscal year extra or losses total of 36.3 billion yen and as a result net income increased to 296 .2 billion this slide showed the variance factors from the first half of last year to this year foreign exchange had positive impact of 13.3 billion yen the

US dollar remains strong versus Japanese Yen but offset by Emerging Market currencies raw material decreased mainly due to steel and aluminum and contribute 22.6% billion to our performance sales performance had a positive impact of 272 2.8 billion yen uh driven by strong volume and positive pricing partially offset by the

Normalization of selling expense in the industry monos had cost monos cost had negative impact of 42 billion yen mainly due to inflation and Regulatory expenses other item had a total negative impact of 86.6 billion including negative impact from sales Finance as net career losses and use car pricing begin to

Normalize as a result offering profit for the half improved to 336 bilon I will now hand over to our CEO with M thank you stepen we will let me talk about the volume outlook for 2023 we will mainting for the full year outlook in total industry volume total Global

Volumes of 3.7 million V Vehicles the 3.7 million already reflects the revision of China Outlook and confirmation of our solid performance in the other markets based on the solid performance reflected in first half result we increase our financial Outlook as follows net revenue from 12.6 trillion yen to 13 trillion yen

Operating profit of 620 billion yen which represents an operating profit margin of 4.8% net income of 390 billion yen to summarize we have achieved a solid Financial result in the first half of the fiscal year 2023 we are firmly committed to the Nissan next transformation plan in order to continue

This recovery and delivery sustainable growth based on the results and our outlook for the year we decided to resume the interim dividend at 5 Yen per share we are maintaining the F year dividend of 15 Yen or more while balancing Financial flexibility the necessary Investments to ensure a sustainable growth and securing solid

Levels of net cash to to weather headwinds in this uncertain economic environment Nissan aims to improve shareholder returns by further improving the company’s performance and financial Foundation we remain committed to increasing shareholder value addressing the Chinese market continues to be a pressing challenge for us Nissan has been operating in China

For over 20 years and has proudly sold more than 15 million vehicles in this important Market we have many loyal customers in China and recognize the Strategic importance of quickly providing them with high value new energy vehicles at attractive prices in addition to internal combustion engine Vehicles which continue to have a

Certain level of demand in the market to this end I explained that we will leverage our local assets across the full value chain to enhan the competitiveness of Nissan products back in July when I presented the first quarter results we are in the process of exploring every possible opportunity let me share three

Key initiatives that are crucial to make a breakthrough in the market the first action is to enrich our new energy vehicle offer we will launch four Nissan branded new energy Vehicles by 2026 to address this growing segment all four models will be developed by our local R&D Center in

China the team which Nissan has been nurturing over the years the first Model A D segment EV is targeted to be launched in the second half of calendaria 2024 three other models will follow including Nissan’s first ever plug-in hybrid model the second initiative is further utilization of our

Local design and Engineering assets our joint venture partner plans to launch six JV new energy Vehicles made in China for China by 2026 the first venusa plug-in hybrid was launched in the first first half of this year and the battery EV was announced on November 3rd we aim

To increase the sales volume by offering the various products in the new energy vehicle segment the third one is that we will start export of Nissan vehicles from 2025 as the first step we aim at 100,000 unit level the four Nissan branded new energy vehicles that I referred to are

Included in the potential products to be exported with will announce the details including the timing and destinations at the right timing I intend to implement these actions with speed in order to put our Chinese operation back on a growth track which is facing challenges today let me reiterate that Nissan is

Leveraging its strength including electrification and vehicle intelligence to empower journey and society as we progress towards our goal of carbon neutrality many initiatives are underway across the world to realize Nissan ambition 2030 long-term Vision in September Nissan design Europe celebrated its 20th anniversary on the occasion we announced that all new

Nissan models in Europe will be 100% electric by 2030 moreover we are involved in the research project called evolve ad that is intended to develop the latest autonomous Drive technology capability in UK as we hone our technological Excellence at the recent Japan Mobility show which ended last week we have demonstrated the

Direction of our future Mobility through five concept cars furthermore this week we announced our decision to invest up to 2.8 billion rails in Brazil to produce two news SUVs including all new kicks as you can see Nissan is taking many concrete steps around the globe yesterday we announced the completion of

Our agreements framing the foundations of the new chapter of the alliance with this we enter a new era of collaboration the completion of rebalancing will enhance Nissan’s agility and contribute to new value creation and operational efficiency as we strive for Nissan ambition 2030 long-term vision and our electrification

Strategy and many projects are work together between Rena and Nissan in order to translate them into the growth of each entity which is very important in these circumstances today our next midterm business plan which we are now finalizing will be a bridge to realization of this Vision though we

Intended to announce this in Autumn due to the radical changes in the market environment in the recent month we need to ensure that the plan is comprehensive and credible hence we will present to you at an appropriate time me thank you for your attention thank you so

Much yes we would like to start the Q&A please limit the number of questions to two per person if you have a question please raise your virtual hand on the zoom system we’ll call me on your name then once you are called please unmute your microphone and put on your camera

And if you see yourself on the screen please please ask your a question your face on the camera will also be projected on the people who are joining the session on okay starting with yes NHK noan please NHK noi son yes this is nuchi do you hear me yes

We do go ahead Nan yes hello yes I have two questions starting with uh uan you talk about MTP announcement because of the changes in the market you are going to put off the announcement to the later date why are you putting it off could you elaborate on the reason to the degree

That you can disclose was there is there any visible timing for the announcement of MTP that’s the first question and the second question your results for this time of the year revenue is record high I believe your results are very strong indeed so taking this into consideration what’s your thoughts around wage

Increase the wage is not catching up with the commodity price increase with regards to page wage increase what’s your thoughts around it that’s my second question thank you yes thank you for your question Nisan starting with the MTP which we are finalizing in order to realize the long-term Vision

MTP is a important Milestone and something that bridge to the long-term Vision because Nissan will continue the operations for longer just not but just by showing the next couple of years uh the circumstances have been largely changing in the recent months so in anticipation the future we would like to develop a

Concrete plan which we want to demonstrate that is why feasibility of the plan while the markets are changing what can we do specifically to achieve MTP and Beyond that’s what we want to demonstrate and by doing so rather than timing contents matter so clear strategy which which is

Concrete and action plan for each market is what we want to summarize and that is why we want to take more time therefore we can show the numbers of MTP but question is how how to make it happen in each location we see a lot of restrictions and changes in the business

Climate so we want to show this is how we implement the electrification strategy or vehicle intelligence strategy we want to concretely demonstrate this and that why we want to cover all the bases and be prepared and What’s the timing that’s your question naturally it’s an MTP so at the latest

It should be within this fiscal year once we are able to explain the contents we are want to show it to you thank you and the second question so far Nissan in the talks with the labor union we were talking about the impact on the living due to

Commodity price prices hi and we have been revising wages and this policy remains as it is so while we monitor the situation going forward carefully we would like to make the decision okay thank you so much moving on to next question my name is m Sor thank you for

The opportunity do you hear me yes we do okay thank you I have one question in the first half the production in Japan went up by 3 38.7% to 350,000 units semiconductor Supply issue has been solved so you are at the level before coid 19 now on the other

Hand if you look at the retail volume it increased by 10% to 220 ,000 units in Japan against the production volume the increase rate seems to be limited why is it North America is strong so you are shifting more volume to the exports and that is why the production volume is

Rising or is it the sales are weak in Japan could you elaborate H what’s the visibility going forward and what’s the action that you are taking in Japan that’s my question yes as you said if we consider the Forex of today exports to North America is increasing that’s a

Fact but on the other hand as I indicated the sales in Japan compared to TV growth we need to do more I know I admit this because we grew by 10% so in Japan we can say that we are growing in Japan on the other hand the new cars that we launched

Especially uh there are many customers who are waiting for the delivery and in these circumstances Logistics or in some of the semiconductor products it’s very limited in number but there is an impact in the supply so we would like to focus on delivering the vehicles to the people

Who are waiting for our car that’s the top priority for us and in do after doing so we would like to deliver the value the customers accept and increase our presence eventually thank you okay thank you okay mov moving on to the next question n shim

Please hello I hope you can hear me yes we can hear you please go ahead thank you very much I have two questions China business first half numbers were released and towards the second half what are the measures that you are taking to achieve recovery that’s my first question secondly in the second

Half you have revised your outlook upwards how much is that is through exchange rate Yen cheapness and reduction of cost as well as mix model mix thank you thank you I was not able to hear your second question can you repeat your second question please go ahead you haven’t Dem muted uh I

Apologize upward revision can you give us the breakdown Yen depreciation mix Improvement cost reduction can you give us the breakdown thank you very much I will ask Steven to respond to the second question but um on your first question regarding the China Market in comparison to the Past things

Have calmed down but the emergence of new manufacturers and excessive price competition still continues and as we explained even if we look at the most recent 3 to 4 months many new models have been launched and therefore most recently the situation is still very much intense that hasn’t changed we

Don’t know how long this will last but the four models we have launched including the local Vena model month after month the volume is increasing and in this context we have been able to deliver Nissan models to our customers we will continue our efforts as such and

Three .7 million units 800,000 for the China business we will take every measure to achieve those targets and on the second question Stephen can you go ahead thank you for the question you h on uh so we revised the guidance uh from 550 uh billion cop to 620 billion increase of

70 billion uh Improvement uh 40 of that Improvement is FX as you saw Q2 yen rate on average was 145 and for second half we assume 140 yen to dollar for the remaining of the second half the second big factor Improvement is raw material of 10 billion as we see the prices

Coming down in the market and lastly is about 20 billion from various activities that we’re doing in terms of performance in terms of quality of sales volume Etc so that adds up to 70 billion does that answer your question does that answer your question moving on to the next question

So Toyo Kai Ino please go ahead with your question you know it’s inan do you hear us are you connected this is from toai do you hear me yes go ahead with your question yes I have two questions in the second quarter by segment Automotive segment and sales

Finance segment are on par what’s the full year outlook and how much will the sales finance and auto segment will increase or grow or develop going forward and next one is supplier support what’s your policy around it so far because of semiconductor issue and coid 19 because of production incre decrease

Suppliers with B with big business with Nissan are in difficulties going forward in order to ensure stable supply of the parts this will be a huge risk for you so how are you going to support suppliers what’s your policy around it thank you very much okay for supplier

Support I will answer and for the question about sales Finance ratio CFO masan will explain how it will develop between sales Finance oo segment suppliers are important business partners for us so we will continue well in they are affected economically in many aspects and as far as possible we

Are ready to deliver support to be specific including semiconductor sourcing and logistic cost and energy cost rise rise this is continuing so in these circumstances we are delivering support so that we can out overcome the challenges together that’s what we are doing today but on the other hand for

The mid and long term we need a more strategic way today Nissan is building an MTP and Beyond so these contents of MTP and Beyond will be shared with the major suppliers so because this will impact their Investments so midterm perspective will be shared with the suppliers as a

Partner that that will be very important especially markets are fragmenting so we need to adapt to the specific circumstances in each region and we need a midterm plan plan which we need to share with with transparency with the suppliers and that’s how we are building MTP and Beyond this is very

Important so Auto segment in sales Finance please second question in you’re right in the first half uh Equity uh base profit about half is auto segment profit half is sales Finance the sales Finance profit is pretty stable uh going to second half so it doesn’t change very

Much it’s a stable business for the outo segment you will come down slightly versus first half uh because we have some timing of the inflationary costs that come more in the second half as well as we are seeing some increased incentive spending most of our markets

So we are trying to maintain a relative competiveness in the markets so that’s a general uh understanding uh but of course we are trying to make sure that we are continuously improving outdo segment profit thank you okay thank you so so much moving on to the next question um

Please this is condo from Asahi thank you for the opportunity yes go ahead the first question is about us in the first half or for the rest of the year the strong sales in us will drive the performance going forward in the inflationary circumstances sales U sales in us how do

You evaluate the sales in US compared to the Past sales in US you have been enhancing quality of sales so it slowed down and it’s now increasing right so for the not limited to this fiscal year but even Beyond this year are can you maintain the impedes

Us and how are you going to approach us that’s the first question and the second question well it’s very difficult to talk about it maybe you updated the China strategy 100,000 level export of Nissan cars if you export the cars this means that other the production entities in

Other locations may be impacted that’s what I imagine to happen globally 5.4 million is a capacity that you have globally but today you are only selling only less than 4 million units so Global footprint in relation to Chinese strategy how are you going to optimize the production volume are you

Trying to transform the structure of the production footprint thank you for your question export from China especially what I described earlier the four new four Electrify vehicles that would that is one key factor so how does it impact other production entities no in other countries there are lot of

Backlog people waiting for Nissan cars so there are things that we can complement from China so we’ll look at Global optimization it doesn’t mean that we are going to decrease the production in other location while increasing the export from China having said that does this mean that our Global capacity is

The right one or not I think that’s your question on this point in China there are a lot of challenges that we are addressing we are in order to optimize the fixed costs including the Chinese giant Venture we would like to hold discussion and come up with the

Countermeasures and the first one North America we have been enhancing quality of sales and this will continue going forward this policy remain unchanged having said that North American TI will grow that’s what I what we anticipate but the incentives are rising so for example through sales Finance we use sales Finance for example

Or we use incentives within Nissan Network we will use the incentives so that it helps us enhance the Nissan brand value so we are not simply putting incentives like variable marketing expenses in cash rather than doing so we will spend incentives that translate to a greater value of Nissan in North

America that’s our approach we have to say that North American users household income there are high household income earners and low income earners there’s a division in the income level of the consumers so we including the affordable cars we are discussing on how to to make the

Supply effective and we are trying to pursue the direction by which we can gross the volume eventually thank you so much you newspaper M noan please go ahead M noan are you connected Can You Hear Me yes please go ahead thank you very much I have two questions

China and MMC relationship those are my two questions first on China introduction of new models nevs four models have been introduced can you give give us more details and the three initiatives what is the status quo of the Chinese market China market and what is your outlook regarding the future

Recovery do you have any Targets for the China market and the three initiatives will these be the final initiatives that you will be taking or are you assuming additional measures in addition to the three initiatives my second question is on MMC alliance with Rena rebalancing is one of the key fact

Factors on the other hand what about the relationship between Nissan and MMC Mr Ida how do you want to change the relation or not change the relution what is your optimal view thank you very much first of all on your first question regarding China as I said four new Nev Brands will be

Introduced and what is the back drop how can we speed up our operations to catch up with the market and offer Market offer products that match the preference of the Chinese markets we have the development center that we have been upgrading so using that as an asset we want to provide

Products that are appropriate for the Chinese customers in a Time timing a timeline that that is appropriate for the Chinese market and that is necessary if we are to seek growth to date we have been focusing on global but as far as the Chinese market is concerned we have to focus on the

Chinese customers especially for the electrified Vehicles so those are some of the decisions we have made but is that enough to seek growth in consideration to the current status of China this is the strategy for now and the fixed cost that is appropriate for the current operations and the model lineup product

Lineup we have today we will continue to conduct internal discussions and we are also Consulting with our JV 2023 will end in December and as we make the business plan for 2024 eventually we will be able to give you more news so this is not the end and we will try to

Further optimize our operations in China and the China Market will continue to see competition in the months and years ahead so I think the key thing is to be well prepared your second question was on our relationship with Miss Bishi Motors and in our relations with Renault in the

Midst of drastic changes in the business business environment just doing what we have been doing without change is not enough so we have to continue to do things that have brought us high performance and change what have not so in the case of re know India or Latin

America these are some of the focal regions and on Project basis we are seeking further growth in those focused regions and in the uh but the next time we talk to you I think we will be able to give more news and MMC not just the K

Cars but in various regions we are discussing possible projects so at the timing we give you more details on our midterm plan we will probably be able to talk more about our relationship with Renault and with MMC in the midst of this difficult business environment there are things that one company alone

Cannot do so by tapping on the strength of our very robust Partners we would like to seek growth for Nissan for Rena and for MMC thank you thank you so much okay moving on to the next question please yes Nik my name is Nishi talking about China model introduction four models and venusia

Brand models you have a product plan besides the product launches engineering footprint talents retrenchment in order to make the business better what are other actions that you are taking that’s my first question and also export from China is what you are planning to do for China operation how what kind of

Impact do you expect on China business will it translate to better utilization rate what’s the expected outcome out of this exports from China could you elaborate these are the my two questions thank you for your questions I talk about four models from export this will contribute to Chinese business and this

Will also contribute to the rest of the world as I said these four new energy Vehicles will be engineered in China and it’s in the process of development and by using this asset we are going to supply it to other destinations that’s one and today in China our utilization rate is very

Limited compared to the capacity so this will also contribute to better utilization rate going back to the previous question China can we stay as it is we we are going to optimize what we can optimize this is a key for our properti as I said 800,000 units in China in the past

We used to hit 1.2 or 1.3 million units so we we will optimize the fixed costs which I’m going to address we need to discuss with the partner to do so when the timing comes I would like to explain about this okay thank you so much okay we are running out of time

So this will be the final question magaz magazine X shingan please do you hear me magazine X my name is shingo yes go ahead I saw the numbers your results you have increased the operating profit and you made an upward revision on the F year guidance look this is very impressive

If you look at other car makers around the globe including the earnings capability there are a lot of things that Nissan has to do going forward uchan as Nissan develops in the future what is the key it can be abstract what is the key for further development of Nissan that’s my

Question thank you so much yes thank you for your question yes this is related to the earlier questions the business climate today is extremely challenging Market is fragmenting and the restrictions regulations customer needs are different among the markets while things are changing largely we can continue do

Doing the business as we have done in order to grow ourselves therefore the good things that we have built should be lever aage on and we will change what should be changed that’s the courage and determination that we need to assume otherwise we it will be very difficult to grow and catch

Up with other car makers we need to do more to do so as I said markets and customers in order to deliver the value that customers and Market appreciate we need to adapt to these changes adapting to the changes is the key factor which means that we myself including top

Executives all the employees of Nissan because what we have done in the past what we have done in the past used to be a Bible so to speak so we need a courage and strong determination to change this that’s what all the employees including the top Executives

Should be determined to do and this is about enriching people’s lives driving while driving Innovations that’s the mission that we have so with this Innovative attitude we would like to deliver the corporate Valley of Nissan that is the biggest key and in the next MTP and Beyond I would like to show it

Clearly how we are going to do this we need to spend time and do this tenaciously this is very important thank you good luck I’m supporting Nissan thank you okay thank you so much with this we would like to conclude the session thank you for joining

Press conference announcing Nissan’s FY2023 first-half financial results.
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