Nissan Motor Ltd S/Adr

Welcome everyone to the Nissan Financial Results for the fiscal year 2023, the Investors and Analysts Session. This is Julian Krell speaking, Head of Investor Relations. Thank you very much for joining. The presentation material can be found on the Nissan IR website. Please be informed of the disclaimer included on the last page of the document and read it carefully. Thank you. For today's financial results presentation, I am joined by Mr. Uchida, CEO, and Mr. Ma, CFO. First, Mr. Uchida, CEO, will talk about Nissan Next Review, followed by the highlights of the fiscal year 2023 results. Then Mr. Ma, CFO, will explain the financial results. Finally, CEO Uchida will talk about the fiscal year 2024 outlook, briefly touch on the ARC, our new business plan, and shareholder return. This will be followed by a Q&A session. I am now handing over to Mr. Uchida. Thank you very much for your time.

Thank you for joining us for Nissan's fourth quarter results for the 12-month period ending March 31, 2024. Today, we will recap the progress achieved during the Nissan Next Midterm Plan, which concluded at the end of March this year. And Stephen will take you through the details of our full year and fourth quarter results. I will then explain our outlook for the new fiscal year and the priorities of our new business plan, the ARC. Our business transformation plan, Nissan Next, focused on three areas, rationalization of both our product portfolio and production capacity, prioritizing the markets and product segments where Nissan is the strongest, and investment for the future in areas including electrification, autonomous driving and battery technology. With these actions, we achieved our goal of both reducing production capacity and streamlining our product portfolio by 20%, and we launched all 12 models ahead of the schedule and the quality of sales improved. We elevated our alliance to the next level. Taken together, these actions refocused Nissan on generating value rather than seeking volume. These steps laid a solid foundation for future growth while maintaining profitability. We have refreshed our model portfolio, achieved solid profitability. Free cash flow and net cash are improving significantly. We have made strategic investments in future products, technologies, and enhanced our partnerships. We have prioritized returns to shareholders as shown by our resumed dividend. In fiscal year 2023, we delivered steady results. Net revenue increased 20% year on year, operating profit rose 51%, and net income increased 92% year on year. This was a resilient performance in a challenging market environment with more fragmentation and increased competition. Stephen will now take you through our results in more details. Go ahead, please.

Thank you. In fiscal year 2023, total global retail sales increased by 4% year-over-year to 3.44 million units. Excluding China, unit sales rose by 17%, reflecting healthy demand in all regions, including Japan, North America, and Europe. In Japan, unit sales rose by 6.5%, in North America by 23%, and in Europe by 17%, and other markets by 14%. In China, retail sales fell by 24% to 794,000 units. Global production follows a similar pattern, rising by 1.5% to 3.43 million units. Outside of China, output rose 14% to 2.65 million units. Production in China decreased by 26% as we adjust the supply to demand. Following the three-month period ending March 31, 2024, global retail sales increased by 12% year over year. All regions showed a healthy growth, including China, where unit sales rose by 19% and production increased by almost 33%. For the first time this year, sales exceeded 1 million units for the quarter. Globally, Q4 production volume increased by 4.9%. turning to our performance in key markets. In Japan, unit sales increased by 6.5% and rising demand for award-winning models such as Sakura and DACE. The proportion of electrified sales rose to 52%. Reflecting our focus on value over volume, net revenue increased by 12%. Production in Japan rose by 22%, with a sharp increase of 30% in export production. In the fourth quarter, retail sales rose by 2.5%, and production was up by 3.8%. In North America, retail sales grew by 23% to 1.26 million units. Sales in the U.S. increased by 20% to 916,000 units with good momentum from key models such as Rogue and Centro. Mexico continued strong sales momentum, maintaining market leadership for 16 consecutive years. Canada saw a very solid growth of 34% year-over-year. The US net revenue per unit was down 8% due to model mix and industry-wide higher incentive. For the year, production in the region rose by 24% to 1.24 million units. In the fourth quarter, unit sales rose by 9%, and production was up by 4.4%. In Europe, retail sales rose by 17% to 361,000 units. Our electrification mix improved to 47%, and revenue per unit increased by 4%. This reflected solid demand for e-power variants of Qashqai and Xtrail. Production was up by 12.9% for the year. In the fourth quarter, unit sales rose by 17.5% and production remained at 81,000 units. Although market conditions in China continue to be challenging, we saw positive year-over-year growth for two consecutive quarters. In the fourth quarter of the calendar year 2023, our unit sales rose by 19%. In the first quarter of this calendar year, retail sales grew by 3.3% to 167,000 units. Our Silphy model remained the market leader in the ICE passenger vehicle segment. Net revenue per unit decreased by 9% reflecting recent market conditions. For the current year 2023, retail sales were down by 16% and production was down by 19%. This slide shows our key financial performance indicators on equity basis for both full year and the fourth quarter. Net revenue for the year increased by 20% to 12.7 trillion yen. Operating profit for the period increased to 569 billion yen, representing a solid operating margin of 4.5%. This includes a positive impact of 38.8 billion yen as we reverse provision related to legal proceedings following the recent federal ruling. Net income total to $426.6 billion including the impact of $54.5 billion provision adjustment. This increase in operating profit and income compared to April 19 forecast provision is due to the reversal of previously recorded litigation provision. Free cash flow for the automotive business was a positive 323 billion yen. Net cash for the automotive business was a healthy 1.55 trillion yen even after buying back 5% of shares in Q3 for 120 billion yen. The share buyback announced on March 27 will be reflected in our first quarter results for the fiscal year 2024 as the transaction was settled in April. For the fourth quarter of fiscal year 2023, net revenue rose to 3.5 trillion yen and operating profit was 90 billion yen, including the litigation impact, representing operating margin of 2.6%. Net income for the quarter was 101 billion and automotive free cash flow was 141 billion yen. Turning to our 12-month financial performance, net revenue increased by 2.09 trillion yen to 12.7 trillion yen. Operating profit increased by 192 billion yen to 569 billion yen. Non-operating income, which includes acclimated company, totaled 133 billion. Our results were impacted by extraordinary losses of 103 billion, which include the impairment costs associated with restructuring in India. Net income nearly doubled to 427 billion yen. This slide shows the variance factors from last year to this year. Foreign exchange had a positive impact of 12.9 billion yen. The US dollar remains strong, with a positive impact of almost 150 billion, but was offset by emerging market currencies, especially Argentina peso, Mexican peso, and Turkish lira. Raw material costs decreased, mainly due to steel and aluminum. and our sales performance had a positive impact of 325 billion, driven by strong volume and product mix. Monosucre costs had a negative impact of 205 billion, including cost relief for suppliers and increasing inflation, logistics, and regulatory costs. As a result, operating profit improved to 569 billion yen, even in dynamic conditions, thanks to the strong efforts of our employees and our focus on priorities set out in Nissan Next. In the final quarter, we saw a ¥19.4 billion benefit from currency movement and ¥14.7 billion benefit from raw materials. Our sales performance contributed ¥39.7 billion, while monosucre cost increased by ¥126 billion, which includes inflation and cost relief for suppliers. With other factors contributing ¥54.8 billion, this led to an operating profit of ¥90.3 billion. In summary, we have come a long way since the start of the Nissan Next period, improving every aspect of our business and laying a strong foundation for future growth while ensuring profitability. Richard Sun will now explain the outlook for fiscal year 2024.