Nissan Motor Ltd S/Adr

Thank you for joining Nissan's fiscal year 2024 first half financial results announcement. First, let me introduce the speakers for today. Makoto Uchida, President and Chief Executive Officer. Stephen Ma, Chief Financial Officer. In today's agenda, we will begin with the presentation followed by Q&A session. Now, I'd like to turn over to Uchida-san.

Good afternoon, everyone. Thank you for joining us. Today, Nissan is announcing its first half financial results that reflect both evolving market conditions and specific issues faced by the company. Let me begin with the summary of the results for the first half of the fiscal year. This will be followed by CFO's Stephen Ma, who will be taking you through the details of the financial results for the first half and second quarter ending September 2024. I will follow with an assessment of the impact on our outlook for the fiscal year and then explain the turnaround actions we are initiating. As I stated earlier, Nissan's financial performance in the first half of this fiscal year was greatly impacted not only by external challenges but also by our specific issues. Net revenue was flat at 5.984 trillion yen. Operating profit fell by 90% year-over-year to 32.9 billion yen. Net income was down by 94% at 19.2 billion yen. Steven will now take you through the details.

Good afternoon everyone. I will now present the key metrics for the first half of the year. In the first half, total global retail sales decreased by 1.6% to 1.596 million units. Excluding China, sales were down by 0.5%. Retail sales decreased by 5.4% in China, 2.4% in Japan, and 1% in North America. In Europe, retail sales grew by nearly 1% and 1.5% in other markets. We lowered global production volume by 7.9% to 1.56 million units as we continue to adjust inventory levels to market demand. This slide shows our key financial performance indicators. In the first six months of the fiscal year, consolidated net revenue was 5.98 trillion yen and operating profit was 32.9 billion yen. Net income totaled 19.2 billion yen and we increased CapEx to 230.8 billion yen and R&D to 295.7 billion yen as we continue to focus on new model launches and investment related to ASSB. Net revenue for the automotive business was 5.35 trillion yen. Net loss was 116.1 billion yen and free cash flow was a negative 448.3 billion yen. However, we continue to maintain ample levels of liquidity and net cash was at 1.36 trillion yen. Turning to the financial performance for the first half and second quarter. Versus last year, net revenue decreased by 79.1 billion yen for the first half and by 159.9 billion yen in the second quarter. Operating profit decreased by 303.8 billion yen in the first six months to 32.9 billion yen and by 176.2 billion yen to 31.9 billion yen for the latest quarter. Net income for the first half totaled 19.2 billion yen and a negative 9.3 billion yen for the second quarter. This slide shows the operating profit variance factors from the first half of last year to this year. Foreign exchange had a positive impact of 28 billion yen due to the depreciation of the yen against several currencies, including the US dollar. Raw material costs had a positive impact of 21.2 billion yen and sales performance had a negative impact of 194.5 billion yen. Monosucre cost was 42.7 billion yen and inflationary items was 71.3 billion yen. Other items, including sales finance, credit losses, and remarket expenses, had a negative impact of 44.5 billion yen. These factors resulted in an operating profit of 32.9 billion yen for the first half. We will now explain the outlook for the fiscal year and the turnaround actions to restore the performance of the company.