Nissan Motor Ltd S/Adr

begin the presentation on fiscal year 2023 first quarter financial results of nissan motor corporation we deeply appreciate the heavy attendance the company is represented by our president and ceo mr uchida makoto and cfo mr stephen ma

first of all ceo mr uchida will give the highlights please go ahead ladies and gentlemen welcome to the announcement of nissan's first quarter results for the three-month period ending june 30th 2023 let me say a few words before presenting the results of the first quarter as you have seen in the press release nissan's financial performance for the first quarter improved significantly from the prior year Net revenue increased 37%, which is highest ever in Nissan for the first quarter. Operating profit increased by 98%, and net income was up 124%. Despite multiple challenges, including the pandemic and global chip shortages, we have seen continuous progress toward the goals of Nissan's next transformation plan. This has enabled us to steadily transform our business to a level that enables us to deliver the expected performance in many areas. However, it does not mean that everything is on track. Our Chinese operation that has been contributing to the company's growth is currently facing significant challenges and saw a big decline in sales for the quarter. we believe that it will take some some time for our performance to recover in the market given the circumstances we will revise downward the full year forecast of our sales in china as well as globally however in view of positive factors such as foreign exchange we are making an upward revision on the revenue and profit for the year now i would like to ask our cfo mr stephen ma to present the results for the first quarter and the full year guidance for fiscal year 2023 later i will give you an update on our china business Stephen-san, the floor is yours.

Thank you, Jue-san. Hello, everyone. Before I begin, let me take a moment to express my gratitude to all Nissan stakeholders for your support enabling us to deliver strong performance while keeping our focus on quality of sales. Looking at the volume in the first quarter, global retail sales decreased by 3.7% year-over-year to 789,000 units. However, excluding China, we achieved growth of over 20%, which was driven by all regions with Japan and North America leading with double-digit growth. The rapidly changing automotive market in China remains challenging, especially in the January to March period. And in addition to the regular seasonality, retail sales decreased significantly by 45.8%. Global production increased by 4.4% as we continue refilling the pipeline to serve customers worldwide. However, inventory levels remain lean. Excluding China, production increased 30.5%. This slide shows our key financial performance indicator for both equity basis and China joint venture proportional basis for the first quarter. On an equity basis, net revenues increased by 37% to 2.92 trillion yen. Operating profit for the period increased to 128.6 billion yen, with an operating profit margin of 4.4%. As we progress solidly with the good initiatives established as part of our transformation plan, Nissan Next. In this regard, I'm very pleased to share with you that again, the automotive segment continues profitable path and contributed 34.4 billion yen in the operating profit for the quarter. Net income total 105.5 billion yen. Free cash flow for the automotive business was a positive 109.4 billion yen. Net cash for the automotive business came in at a healthy level of 1.35 trillion yen. On a proportional basis, which includes our China operation, net revenue rose to 3.11 trillion yen from 2.48 trillion yen last year. Operating profit was 130.5 billion yen, representing an operating margin of 4.2%. With free cash flow for the automobile business reaching a positive 103.7 billion yen and a net cash for the automobile business of 1.68 trillion yen, we continue to produce results on the right track. Now I will cover the performance of our key markets. In Japan, retail sales increased 19.1% to 106,000 units. Thanks to the launch of a new Serena e-Power in April, total sales for the Serena increased 130% for the quarter. Furthermore, the total electrification ratio improved 12 points to 54%. Net revenue per unit increased by 20% from the prior year Q1. Production volume increased 69.6% for the period due to the improved supply of semiconductors, as well as the recovery from the lockdown in Shanghai in the prior year. In North America, retail sales and production volume increased by 33.1% and 35.6% respectively for the quarter. This growth was primarily driven by our top selling models, the Rogue and the Central. Our quality of sales initiative continue with net revenue per unit increasing by 6% year over year. To pursue a path to sustainable growth in the US, we continue to focus on the quality of our overall business. In Europe, despite the constraint in logistics, retail sales grew by 7.2% and production volume increased by 14% for the quarter. Net revenue per unit increased by 24% year over year. Our electrification ratio increased 27 points to 35% due to the strong acceptance of our e-power models. In China, in the first quarter, sales and production volumes were significantly impacted by the pandemic, seasonality, and severe pricing action within the market. We elected to prioritize our quality of sales, which led to retail sales of 162,000 vehicles for the January to March period, and 196,000 from April to June. We'll go into more detail later regarding the status of our China business. Let's have a look at the income statement for the three months ending June 30, 2023, on an equity basis. Net revenue increased by 780.4 billion yen to 2.92 trillion yen. And operating profit increased by 63.7 billion yen to 128.6 billion yen, representing an operating margin of 4.4%. Non-operating income, which includes equity metal company, totaled 38 billion yen. Extraordinary losses totaled 37.4 billion yen, including a non-recurring loss related to litigation. Net income increased to 105.5 billion yen as a result of the improvement in operating profit and updated tax assumptions. This slide shows the variance factors from the first quarter of last year to this year. Foreign exchange had a positive impact of 2.2 billion yen primarily due to the strong U.S. dollar, which was partially offset by emerging market currencies. In general, raw material prices decreased with the exception of value-related materials such as lithium. Sales performance had a positive impact of 160.7 billion yen driven by the strong increase in volume and continued benefit from the strong execution of Nissan NEXT with a clear focus on quality of sales. Monosucrete costs had a negative impact of 19.2 billion yen, and other items had a total negative impact of 82.9 billion yen, including negative impact from sales finance as used car pricing and net credit losses begin to normalize, as well as other timing-related items. As a result, operating profit for the quarter improved to 128.6 billion yen. The automotive industry continues to face challenges in the rapidly changing market environment in China, as evidenced in our year-to-date retail sales performance. To account for this recent development, we decided to lower our sales volume forecast for China to 800,000 units. Despite the challenges in China, we anticipate continued improved performance in our core markets of Japan, North America, and Europe, which mitigates the shortfall in global volumes to a total of 3.7 million units versus the previous outlook of 4.0 million units. Looking at the financials, reflecting the depreciation of the yen versus US dollar for the first quarter, we updated our foreign exchange assumption and increased our financial outlook as follows. Net revenue from 12.4 trillion to 12.6 trillion yen. Operating profit of 550 billion yen, which represent an operating profit margin of 4.4%. Net income of 340 billion yen. To summarize, we started into the fiscal year 2023 with solid results and we are confident for the coming quarters. We remain committed to the Nissan X transformation plan in order to continue this recovery and deliver sustainable growth. I will now hand to our CEO, Uchida-san. Mr. Ma, thank you very much.