Nissan Motor Ltd S/Adr

Welcome to the Nissan Fiscal Year 2023 First Half Financial Results Investors and Analysts Session. This is Julian Krell speaking, Head of Investor Relations. Thank you very much for joining. Our today's attendees are Mr. Uchida, President and CEO, and Mr. Ma, CFO. Mr. Uchida will start the presentation with the highlights of the first half. We will conclude this call with a Q&A session. I am now handing over to Mr. Uchida. Thank you very much for your time.

Thank you so much. Let me present the results for the first half of the year. Welcome to Nissan's first half results for the six-month period ending September 30, 2023. Nissan's financial performance for the first half of this fiscal year 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 Nissan's next business transformation plan. The results of our continuous efforts are reflected in our business performance in the current fiscal year, which is the fiscal year of the plan. Now, I would like to ask our CFO, Mr. Stephen Ma, to present the results for the 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 insights into our key steps. Ma San, please.

Hello, everyone. Let me present the key metrics for the first half of the year. Looking at the volume for the first half, global retail sales increased by 3.3% year-over-year to 1.62 million units. Excluding China, we achieved growth of over 23.4% with Japan, North America, and Europe delivering double-digit growth. In China, the rapidly changing auto modern market remains challenging. Our retail sales decreased significantly by 34.3%. Nissan's global production volume increased by 4.5% as we continued refilling the pipeline to serve customers worldwide. Excluding China, our production increased by 25.1%. Looking specifically at the second quarter, global retail sales increased by 11% year-over-year to 833,000 units. Excluding China, sales grew by 26.5% and production volume increased by 4.7% for the quarter. This slide shows our key financial performance indicators for the first half. On an equity basis, net revenue increased by 30% to 6.06 trillion yen from 4.66 trillion yen in the same period of 2022. On the same basis, operating profit for the period increased to 336.7 billion yen with a solid operating margin of 5.6%. Automotive segment profit improved to 168.8 billion yen. Net income totaled to 296.2 billion yen. Free cash flow for the automotive business was a positive 193.9 billion yen. Net cash for the automotive business came in at a healthy level of 1.5 trillion yen which ensures our 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. Operating profit was 344.7 billion yen, representing an operating margin of 5.3%. Although free cash flow was a positive 161.6 billion yen and net cash reached 1.81 trillion yen. As the financial results indicate, we continue to successfully implement the objectives set forth on the Nissan X-Plan and we are on the right track. Now I will cover the performance of our key markets. In Japan, retail sales increased by 10.7% to 228,000 units. Thanks to the launch of the new Serena e-Power in April, total sales of the Serena increased by 62%. The Sakura continues to enjoy great customer acceptance and sales increased by 37% in the first half. Our total electrification ratio improved by 6 points to 54% and Nissan remains the number one EV seller for 13 consecutive years. the net revenue per unit improved by 14% from the prior year. Production volume increased 38.7% for the period due to improved supplies. In North America, retail sales and production volume increased by 39.2% and 35% respectively. This growth was driven by our top selling models, the Rogue and the Central in the US. In addition, both the Mexico market and Infiniti brands contributed to the overall sales volume growth in North America, each increasing by over 50%. Our net revenue per unit in the US increased by 3% from the prior year. In Europe, retail sales grew by 19.3% and production volume increased by 19.4%. Net revenue per unit improved by 19% year-over-year. Thanks to the strong acceptance of the Ariya, Juke Hybrid, XTRO e-Power and Qashqai e-Power, our electrification ratio increased by 25 points to 37%. I am happy to share that Leaf was awarded the best car for city driver in the UK. In China, sales and production volume continue to be significantly impacted in a difficult market environment. Our retail and production volume declined by 24.4% and 25.2% respectively. The SILFI continues to be the top selling model in the I segment. On a calendar year basis, our retail sales decreased by 28.9% for the July to September period. As I mentioned earlier, China market remains challenging with intense price war and increased competition with frequent model launches, especially from the domestic brands. During this period, Nissan has launched four new models. Though they have been a slow uptake, these models are seeing a gradual acceptance among our customers month over month. We will elaborate in detail later. Let's have a look at the income statement for the six months ending September 30, 2023 on an accurate basis. Net revenue increased by ¥1.4 trillion to ¥6.06 trillion and operating profit increased by ¥180.1 billion to ¥336.7 billion, representing operating margin of 5.6%. Non-operating margin, which includes equity metal company, tallowed to ¥75.9 billion and improved by ¥35.6 billion compared to the previous fiscal year. Extraordinary losses tallowed to ¥36.3 billion. As a result, net income increased to 296.2 billion yen. This slide shows the variance factors from the first half of last year to this year. Foreign exchange had a positive impact of 13.3 billion yen. The US dollar remained strong but was offset by emerging market currencies. Raw material impact was a positive 22.6 billion yen due to decrease in prices of most materials. Sales performance had a positive impact of 272.8 billion yen, driven by strong volume and positive pricing, partially offset by normalization of selling expenses in the industry. Mono-secret costs had a negative impact of 42 billion yen, mainly due to inflation and regulatory expenses. Other items had a total negative impact of 86.6 billion yen. This includes impact on sales finance as net credit losses and used car pricing has begun to normalize. As a result, operating profit for the half improved to 336.7 billion yen. And with that, I will hand over to Chiesan.