FY04 financial results NISSAN Value-Up · PDF fileToyota Honda NISSAN Chrysler Ford GM 0 ... FY04 financial results / NISSAN Value-Up April 25, ... Global Auto Industry (Sept. 2004)

April 25, 2005FY04 financial results / NISSAN Value-Up

FY04 financial results

NISSAN Value-Up

President and CEO

Carlos Ghosn

April 25, 2005


AgendaAgenda

FY04 sales performance

FY04 financial performance

FY05 outlook

NISSAN 180 progress

NISSAN Value-Up


Global retail sales volumeFY04

Tho

usan

d un

its

FY99 FY00 FY01 FY02 FY03 FY04

2,597

3,057

2,6332,530

2,771

3,388+10.8%

1990: Record sales 3,107

2,200

2,800

3,000

2,600

3,200

3,400

2,400


Tho

usan

d un

its

2,469

3,064

2,614

2,402

2,737

3,378+10.2%

Global production

2,200

2,800

3,000

2,600

3,200

3,400

2,400


FY04

Record production 3,085


JapanFY04 sales performance

983

848+1.4%

837

Fuga “RJC Car of the Year”

March Cube

Tiida Note

4 models in top 10monthly sales ranking

FY03 FY04

Tho

usan

d un

its

0

600

800

400

1,000

200

Industry TIV: 5.8 million (-1.2%)

Nissan share: 14.6% (+0.4 point)


United States

859

Tho

usan

d un

its

1,013+18.4%

0

600

800

400

1,000

200

FY03 FY04


Industry TIV: 16.9 million (+0.4%)

Nissan share: 6.0% (+0.9 point)

Pathfinder

Frontier

TitanAltima


Tho

usan

d un

its

0

80

100

60

120

140

40

Infiniti sales performance

124

78 71

96

76

132+6.5%



Europe

544+0.3%

542

Tho

usan

d un

its

0

600

800

400

1,000

200

FY03 FY04


X-TRAIL

Pickup

Industry TIV: 19.8 million (+4.2%)

Nissan share: 2.7% (-0.2 point)


983+19.5%

822

Tho

usan

d un

its

China sales: 194,000 (+92.7%)Including Dong Feng LCVs

General Overseas Markets**

*Including Mexico and Canada

Teana “Car of the Year 2005”

0

600

800

400

1,000

200

FY03 FY04



AgendaAgenda



FY05 outlook

NISSAN 180 progress

NISSAN Value-Up


FY03 FY04(Billion yen)


FOREXfor FY04

￥107.6/$1￥134.4/€1

Change

Consolidated net revenue 7,429.2 8,576.3 +15.4%

Consolidated operating profit 824.9 861.2 +4.4%

Operating margin 11.1% 10.0% -1.1points


Impact on operating profitFY04 financial performance

Bill

ion

yen

FY04O.P.

861.2

FY03O.P.

824.9

Forex-78

900

800

1,000

Scope of consolidation

+31

Volume/mix+284

Salesexpenses

-114


Incentives in the U.S.: Autodata

1999 2000 2001 2002 2003 2004 2005

$ p

er

uni

t

ToyotaToyotaHondaHonda

NISSAN

ChryslerChryslerFordFord

GMGM

0

1,000

2,000

3,000

4,000

5,000


Incentives in the U.S.: CNW

1999 2000 2001 2002 2003 2004 2005

FordFord

$ p

er

uni

t

0

1,000

2,000

3,000

4,000

5,000

ToyotaToyota

HondaHonda

ChryslerChrysler

GMGM

NISSAN


Comparison of incentives$

pe

r u

nit

0

1000

2000

3000

4000

5000


ChryslerChryslerGMGM

NISSANNISSAN

5000

CNW

1999 2000 2001 2002 2003 2004 20050

1000

2000

3000

4000


NISSANNISSAN

ChryslerChryslerFordFord

GMGMAutodata

FordFord


Impact on operating profitFY04 financial performance

Bill

ion

yen

Scope of consolidation

+31

FY04OP

861.2

FY03OP

824.9

Forex-78

Salesexpenses

-114

Manufacturing expenses

-15

Warrantyexpenses

-41

R&Dexpenses

-44

Volume/mix+284

900

800

1,000

Purchasingcost

reduction+131

Productenrichment

-92

G&Aand

others-25.7


Operating profit by region Billion yen

Eliminations: FY03 +5.4, FY04: -0.4

FY04FY03

66

GOM (Including Mexico)

84.8

U.S. (+CAN)

FY04FY03

379.7351.8

FY04FY03

400

200

049.2

EUROPE

56


FY03

JAPAN

FY04

400

200

0

341.1352.5


FY03 FY04(Billion yen)


FOREX for FY04 ￥107.6/$1, ￥134.4/€1

Change

Net non-operating expenses -15.2 -5.5 +9.7

Financial costs -15.7 -10.4 +5.3

Ordinary profit 809.7 855.7 +5.7%

Net extraordinary losses -73.2 -62.5 +10.7

Net income 503.7 512.3 +1.7%

Net income before tax 736.5 793.2 +7.7%

Taxes -219.0 -258.0 -39.0

Minority interests -13.8 -22.9 -9.1


Net cash flow (automotive)

-100

Billion yen

Net debt at beginning of FY03

Net cash at end of FY04

-13.6205.8

100

200

300

400

500

600

700

800

0

Cas

hD

ebt

-450.7

Investing activities

Free cashflow

-209.1

Financing activities

Operating activities+879.2


FY04 financial performanceNet automotive debt

2,100

1,349.7

952.7

13.6

431.7

-215.9-8.6

Under new accounting standards

FY98 FY00 FY01 FY02 FY03 FY04FY99

1,000

1,500

500

2,000

2,500

0

-453.5-205.8

Bill

ion

yen


COPFixed assets

+ Net working capital+ Cash on hand

ROIC(Auto)

=

1.3%

7.5%

19.8%21.3%

12.7%

20.1%*

0

10%

15%

5%


20%

25%

FY04 financial performanceReturn on invested capital (ROIC)

*Same scope of consolidation as P&L, excluding change of cash compared to FY03


Div

iden

d pe

r sh

are

/ ye

n

40

1914

24

34

29

7

0

8

Dividend policyFY04 financial performance

FY99 FY00 FY01 FY02 FY03 FY07*

20

10

40

0

30

FY04 FY05* FY06*

*Forecast


AgendaAgenda



FY05 outlook

NISSAN 180 progress

NISSAN Value-Up


0

1,500

2,000

1,000

FY01 FY02 FY03 FY04 FY05*

3,000

3,500

500

FY05 outlook

2,5972,771

3,0573,388

2,500

3,618+6.8%

TIV assumption: 61 million (+0.7%)Tho

usan

d un

its

*Forecast


FY05 new models

JapanSerena

OttiCompact wagonM-class sedan

Minicar

Europe

U.S./Canada

GOMQuest Infiniti M Lafesta Pathfinder Tiida hatchback InterstarNavara Tiida sedan Xterra

350Z RoadsterMurano

PathfinderNavara

Micra C+C


0

1,500

2,000

1,000

FY01 FY02 FY03 FY04 FY05*

3,000

3,500

500

FY05 outlook

2,5972,771

3,0573,388

2,500

3,618+6.8%

TIV assumption: 61 million (+0.7%)Tho

usan

d un

its

*Forecast

+3.3% U.S.1,047

+ 10% Japan933

+1.1% Europe550

+10.7% GOM (+Mexico, Canada)

1,088


Risks

Volatility in exchange rates

Higher interest rates

Higher commodity pricesHigher energy prices

Higher level of incentivesUncertainty on level ofgrowth in U.S. and Japanese markets

Opportunities

NISSAN Value-Up

FY05 outlook


FY04 FY05(FC)(Billion yen) Change

Consolidated net revenue 8,576.3 9,000 +4.9%Consolidated operating profit 861.2 870 +1.0%Ordinary profit 855.7 860 +0.5%Net income 512.3 517 +0.9%

+13.1%CAPEX 540477.5

ROIC 20.1% ----20% or above

FOREXfor FY05

￥105/$1￥130/€1

+13.0%R&D expenses 450398.1

FY05 outlook


AgendaAgenda



FY05 outlook

NISSAN 180 progress

NISSAN Value-Up


1

8

0

% operating margin

net automotive debt at end FY04

million additional units worldwide

NISSAN 180 commitments


0

2,000

1,000

4,000

3,000

Tho

usan

d un

its

Progress toward NISSAN 180 sales

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

849553

274

1,1201,403

1,809

3,597


Market coverage expansionNISSAN 180

Full-size SUV & TruckArmada Titan

CrossoversMurano FX35/45

350Z

MiniMoco Clipper

New CompactsNoteTiida

Teana

LCVs

Kubistar

Primastar Interstar


AgendaAgenda



FY05 outlook

NISSAN 180 progress

NISSAN Value-Up


Track toward great company

NRP NISSAN 180 NISSAN Value-Up

“Revive our company ”

“Complete revival on track for profitable growth”

“Value up with sustained performance”

Commitments

• Profitability in FY00

• Operating profit margin>4.5% in FY02

• 50% debt reduction by FY02

• +1M units by 9/05

• 8% operating profit margin

• 0 automotive debt

• 4.2M units in FY08

• Top level operating profit margin

• ROIC average 20%


Core elements of NISSAN 180Evolutionary plan

More revenue

More quality

and speed

Less cost

Maximized alliance

with Renault


NISSAN Value-Up commitments

Top level operating profit margin among global automakers in FY05-07

Profit commitment

To sustain performance


0

2

4

6

8

10

12

-3 -2 -1 0 1 2

Global Market Share Change from 1999 (%)

CO

P m

argi

n (%

)

GM

RENAULT

PSADCX

HONDA

TOYOTA

BMW HYUNDAI

FORD

VW◆◆ Nissan◆◆ Competitors in 20041999

2000

2001

20022003 2004 2007

NISSANValue-Up

NRP

N180

Top level operating profit marginNISSAN Value-Up commitments




Profit commitment

4.2 million sales in FY08

Volume commitment


+812

+791

2,597

3,388

Global sales volume

0

2,000

1,000

FY01 FY04 FY08*

4,000

3,000

Tho

usan

d un

its

4,200 commitment

*Forecast



20% average ROIC over the plan



Profit commitment

4.2 million sales in FY08

Volume commitment

Return on invested capital


Financial metrics comparison

Source: Moody’s Rating Methodology: Global Auto Industry (Sept . 2004) Analysis: NISSAN IR

*Retained cash flow: Cash flow from operation – change in working capital - dividend**Adjusted cash: Cash + marketable securities + VEBA (Voluntary employee’s beneficiary association)

Top profitability

Strong cash flow

Weak liquidity Average investment

ROA

ROEAss

et Tu

rnove

r

RCF*/To

tal D

ebt

RCF*/Net D

ebt

Fixed C

harge C

overa

ge

Adj. Cas

h**/ To

tal A

sset

Cash/D

ebt (

B/S)

Adj. Cas

h**/To

tal D

ebt

Mat

urity

R&D/Reve

nue

Depre

ciatio

n/CAPEX

EBITA M

argin

0

1

2

3

4

5

6

Average rating: A

BMW Honda PSA

DCX VW

Nissan

Toyota

FCF/Tota

l Deb

t





Top profitability

Strong cash flow


ROA

ROEAss

et Tu

rnove

r

RCF*/To

tal D

ebt

RCF*/Net D

ebt

Fixed C

harge C

overa

ge

Adj. Cas

h**/ To

tal A

sset

Cash/D

ebt (

B/S)

Adj. Cas

h**/To

tal D

ebt

Mat

urity

R&D/Reve

nue

Depre

ciatio

n/CAPEX

EBITA M

argin

0

1

2

3

4

5

6

Average rating: A

BMW Honda PSA

DCX VW

Nissan

Toyota

FCF/Tota

l Deb

t





Top profitability

Strong cash flow


ROA

ROEAss

et Tu

rnove

r

RCF*/To

tal D

ebt

RCF*/Net D

ebt

Fixed C

harge C

overa

ge

Adj. Cas

h**/ To

tal A

sset

Cash/D

ebt (

B/S)

Adj. Cas

h**/To

tal D

ebt

Mat

urity

R&D/Reve

nue

Depre

ciatio

n/CAPEX

EBITA M

argin

0

1

2

3

4

5

6

Average rating: A

BMW Honda PSA

DCX VW

Nissan

Toyota

FCF/Tota

l Deb

t





Top profitability

Strong cash flow


ROA

ROEAss

et Tu

rnove

r

RCF*/To

tal D

ebt

RCF*/Net D

ebt

Fixed C

harge C

overa

ge

Adj. Cas

h**/ To

tal A

sset

Cash/D

ebt (

B/S)

Adj. Cas

h**/To

tal D

ebt

Mat

urity

R&D/Reve

nue

Depre

ciatio

n/CAPEX

EBITA M

argin

0

1

2

3

4

5

6

Average rating: A

BMW Honda PSA

DCX VW

Nissan

Toyota

FCF/Tota

l Deb

t


From auto to financeInter-company loan

% o

f int

er-c

om

pany

loan

FY02 FY03 FY040

150

300

450

600

750

900

0%

5%

10%

15%

20%

25%

30%

35%

Bill

ion

yen

1,05035.7%

33.0%

23.1%

% of inter-company loan = inter-company loan/total funding excluding equity


0

10%

15%

5%

20%

25%

NISSAN 180 NISSAN Value-UpNRP

7.5%

19.8%21.3%

12.7%

ROIC average of 20%

FY00 FY02 FY03 FY04 FY05 FY06 FY07FY01FY99

Return on invested capital (auto)

COPFixed assets

+ Net working capital

ROIC(Auto)

=

20.1%*

*Same scope of consolidation as P&L, excluding change of cash compared to FY03

1.3%



Key assumptions

Total industry volume up to

63 million units in FY07

Foreign exchange rateFY05 105￥/$ 130￥/€

FY06, FY07 100￥/$ 120￥/€


New global product launches

31

44

28NISSAN Value-UpNISSAN 180

70

New Products

Start of Production


28 all-new modelsNISSAN Value-Up

10 new conquest models

18 replacement models

2828


Infiniti global tier-1 luxury brandBreakthrough

Taiwan

Middle East

Russia

Korea

China

North AmericaJapan*

*Japan launch after NISSAN Value-Up


Light Commercial Vehicles

AD VanATLAS

CIVILIAN

CARAVAN

CABSTAR

22 Nissan-badged models

Breakthrough


Thou

sand

uni

ts

0

450

FY00 FY03 FY07*

600

300

150

0

6%

4%

8%

2%

Light Commercial Vehicles

Co

nso

lidat

ed

ope

rati

ng m

arg

in

312

187 203 182234

FY01 FY02 FY04

434+40%

Breakthrough

3.3%3.6%

-0.5%1.4%

4.0%

8.0%


Leading Competitive Countries (LCCs)

Thailand

China

Egypt

Maximize opportunities, minimize costs

India

RomaniaHungary

Vietnam Mexico

Mercosur

Breakthrough


Geographic expansion

IndiaPakistan

Russia

Egypt Thailand

Gulf Countries China

Eastern Europe

Breakthrough


80％ SU-LEVBy March 06

40％ EV

=

Environmental technologiesOpportunities

1 million CVTs

200,000hybrids

HEV

ULEVULEV

SU-LEV

EV

=CVT

CO2 EmissionNOx & HC Emission


New safety approach

Safety Shield

10 new safety technologies in the next three years

Opportunities


FY04 financial results NISSAN Value-Up · PDF fileToyota Honda NISSAN Chrysler Ford GM 0 ... FY04 financial results / NISSAN Value-Up April 25, ... Global Auto Industry (Sept. 2004)

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