Nissan Motor Ltd S/Adr

Good evening, everyone. Welcome to Nissan's full-year financial results for fiscal year 2025. I'm Lavanya Vagampar from Global Communications, and I'll be your host for today. Today's session is scheduled for 45 minutes. We have both on-site and live streaming happening at the same time. Let me start by introducing the speakers for today. Ivan Espinoza, Chief Executive Officer. George Leandros, the new Chief Financial Officer. Without much ado, I'll hand over to Ivan to start the session.

Good afternoon, everyone. Thank you for joining us today. It has now been one year since we launched the Renison plan, and during this period, we have maintained a clear focus on execution, and the progress has been steady, despite an operating environment that remains uncertain. This progress reflects the discipline efforts of our employees and the continued support of our partners. Together, we have taken decisive actions and have begun to establish a more resilient operational and financial foundation for Nissan. Today, George will present our financial performance for fiscal 2025 and the outlook for this year, and then I will provide an update on the progress of re-Nissan. George?

Thank you Yvonne and good afternoon everyone. I'm happy to meet you all in my new role as CFO for Nissan. Let me start with our sales performance. Nissan sold 3.15 million vehicles during the year. Unit sales declined by 5.8% for the full year with a decrease of 5.9% in the final quarter. This performance reflects a competitive, uncertain environment and an uneven market performance. Looking at our key markets, in China, sales declined by 6.3% year on year and 1.9% in the fourth quarter. However, the second half showed progress supported by launches of new energy vehicles. In Japan, unit sales were down 13.5% for the full year. The decline slowed in the final quarter with new vehicles such as Rooks and Leaf attracting new customers. In North America, unit sales remained broadly stable over the year. Sales in the fourth quarter declined by 6% due to fewer fleet sales, while sales to individual consumers continued to deliver retail share growth in the US. In Europe, unit sales decreased by 9.7% for the full year and 11% for the fourth quarter. Rest of the world, unit sales declined by 8.1% for the full year. Turning to our financial performance for FY25, consolidated net revenue reached ¥12 trillion. Against our initial assumption, we achieved a positive operating profit of ¥58 billion, supported by strong contribution from Renison Cost Actions. One-time items, mainly manufacturing consolidation and impairment, resulted in a net loss of $533 billion. On capital expenditure, the remits and actions have enabled us to prioritise our spending. This is reflected by CapEx reduced by 13.5% year over year and R&D spending by 9.1%. These reductions were made without significant cuts to R&D projects or programs. In the automotive business, net revenue is at $10.7 trillion. We are reporting an operating loss of $250 billion including a tariff burden. Full year free cash flow was at negative $481 billion. Automotive operating profit was positive without the impact of tariffs and free cash flow turned positive in the second half to $112 billion supported by disciplined working capital management. At the end of the period net cash importantly stood at $1.17 trillion. Let me take you through the operating profit variance. Foreign exchange was a $21.7 billion headwind. driven by volatility in emerging market currencies, while the US dollar was fairly flat year on year. Raw material costs increased by 5 billion, reflecting rising prices for commodities, including copper and aluminium. The total negative impact of US tariffs on operating profit was 286 billion yen. Sales performance was negative $35 billion. While we saw improvement on our sales mix and volume recovery in key markets like the US, we increased selling expenses to support sales momentum. We more than compensated for inflation of $95 billion through strong cost discipline. Monazukuri savings reached $227 billion, supported by efficiencies across manufacturing, logistics, R&D and purchasing. One-time benefits delivered a positive impact of $148 billion, with lower compliance costs related to the US and the UK emissions regulations, and we had reduced warranty estimates. Other items were $55.6 billion positive as we lowered expenses in sales finance, remarketing and G&A. Taking all this together, we delivered an operating profit of $58 billion ahead of expectations. FY2026 outlook. As Renison takes effect and demand evolves, we see improved performance this year. We expect our unit sales to rise by 4.7% to 3.3 million units. We expect the launch of new and refreshed models to drive higher sales and share across all key markets. This year, we anticipate a broad based growth across all markets. To support this demand, we plan to increase production to 2.95 million units. Now for the profit outlook. Our full year revenue outlook is 13 trillion yen driven by higher unit sales. We expect profit of 200 billion representing an operating profit margin of 1.5%. Automotive operating profit and free cash flow are expected to be positive before tariffs and net income we are projecting to be positive 20 billion yen. This assumes forex rates of 150 yen to the dollar and 175 yen to the euro. Allow me to walk you through operating profit outlook. Foreign exchange is a negative $20 billion and rising raw material costs including risks associated with aluminium and oil are a further negative $85 billion. US tariff burden improves by $30 billion with Japan exports to the US at 15% for the full year. The most significant profit improvement comes from reness and actions, included in the improvement of ¥340 billion in manufacturing costs. This includes both fixed and variable cost savings. We anticipate a negative impact of inflation at ¥60 billion and one-time negative items amount to ¥150 billion as In FY25, one-time gains do not repeat again in FY26. Taking all of these factors together, we arrive at an operating profit outlook of 200 billion yen. In closing, I'd like to say we are making steady progress with a clear discipline focus on execution and improving fundamentals as we identify cost reduction opportunities and we execute with discipline and with speed. Our priority in FY26 is to continue to deliver on our targets. I now will hand back to Ivan.