Nissan Motor Co., Ltd. · TSE:7201
Nissan Motor — H1 FY2003 Earnings Presentation
25 slides from Nissan Motor's earnings presentation, Nov 6, 2003
Slide 1: Nissan Motor Company FY03 Midterm Results
NISSAN MOTOR COMPANY FY03 MIDTERM RESULTS November November 66 2003 2003 Mr. Mr. Alain-Pierre Alain-Pierre Raynaud Raynaud Senior Senior Vice Vice President President && Global Global Controller Controller of of Nissan Nissan
Slide 2: Agenda
Agenda Accounting changes Final figures: update from pre-announce as of Oct.16th pre-announce Currency impact Pension Non -operating & extraordinary Items Non-operating Net profit Business segment Cash flow Captive finance companies ROIC Employees stock options plan Dividend policy Funding strategy
Slide 3: Lease Accounting: From Off B/S to On B/S
Lease Accounting: From Off B/S to On B/S Balance sheet impact (Billion Yen) Items FY02 FY03 1H Change Canton SPE full consolidation +116.6 +104.1 -12.5 Leasing obligation +153.2 +153.2 Income Statement Impact FY03 1H (Billion Yen) Items OP Non-OP Net Leasing obligation 11.0 -2.0 +9.0
Slide 4: Final Figures: Consolidated Basis
Final Figures: Consolidated Basis FY02 1H FY03 1H Change Sales Volume (k units) 1,386 1,467 5.9% (in Billion Yen) Revenue 3,285.5 3,556.2 8.2% COGS 2,350.8 2,510.5 6.8% SG&A 586.4 644.6 9.9% Operating Profit 348.3 401.1 15.2% Operating Margin (%) 10.6% 11.3% +0.7pts Non-Operating Income & Expense -2
Slide 5: Currency impact on operating profit
Currency impact on operating profit (Billion Yen) 10 US$ EURO* AUS$ Peso Rand Others Total 0 134.6 +2.3 0 +7.3 -10 -3.6 +3.5 -28.7 +19.2 -20 -30 * EURO includes British Pound
Slide 6: Pension Expenses (P/L Impact)
Pension Expenses (P/L Impact) Operating & Non-Operating Cost (Billion Yen) FY02 1H FY03 1H Change Operating Cost 34.7 40.2 +5.5 Non-Operating Cost 12.1 7.3 -4.8 Total 46.8 47.5 +0.7 Cash Contribution (Billion Yen) FY02 1H FY03 1H 34.0 35.5
Slide 7: Non-Operating & Extraordinary Items
Non-Operating & Extraordinary Items Main Non-Operating Items (Billion Yen) Items FY02 1H FY03 1H Change Net financial expenses -7.9 -8.3 -0.4 Amortization of pension obligation -12.1 -7.3 +4.8 Equity in profits of unconsolidated 0.5 8.3 +7.8 companies Main Extraordinary Items (Billion Yen) Items FY0
Slide 8: Net Profit
Net Profit (billion yen) Net profit 300 287.7 56.4 250 25.7 237.7 205.6 Murayama 200 Tax increase 150 100 50 0 Comparable FY02 FY03 1st Half To FY03 1st half 1st Half
Slide 9: Final Figures: Business Segment (Income Statement)
Final Figures: Business Segment (Income Statement) (Billion Yen) Automotive Sales Financing FY02 1H FY03 1H Change FY02 1H FY03 1H Change Net Sales 3,089.6 3,367.7 9.0% 195.9 188.5 3.8% COGS 2,223.9 2,402.7 8.0% 126.8 107.8 15.0% Gross Profit 865.7 965.0 11.5% 69.1 80.7 16.8% Operating Margin 10.3%
Slide 10: Final Figures: Business Segment (Balance Sheet)
Final Figures: Business Segment (Balance Sheet) (Billion Yen) Automotive Sales Financing FY02 FY03 1H Change FY02 FY03 1H Change Total Assets 4,245.3 4,501.7 6.0% 3,103.9 3,251.2 4.7% Total Liabilities 2,628.7 2,792.3 6.2% 2,823.7 2,964.7 5.0% Total Shareholder Equity 1,528.1 1,612.6 5.5% 280.2 286.
Slide 11: Net Automotive Debt
Net Automotive Debt (Billion Yen) Net automotive debt 300 +153.2 =278.1 250 200 150 +104.1 +116.6 =108.0 100 50 8.6 cash 20.8 positive 0 New Constant Canton Lease New Constant Canton accounting accounting obligation accounting accounting FY02 s FY03 1st Half
Slide 12: Automotive: FY 2003 Net Cash Change
Automotive: FY 2003 Net Cash Change (Billion Yen) Lease Net automotive Obligation Others 300 debt at beginning of -7.5 200 FY03 Operating Financing -153.2 Activities* Activities*** 278.1 100 Investing Asset 108.0 Activities** Sales -155.2 0 347.2 25.3 Net automotive -100 -226.7 debt at the end of FY
Slide 13: Sales Financing: Asset & Operating profit (NFS)
Sales Financing: Asset & Operating profit (NFS) (Asset*) NFS (OP) (Billion Yen) 800 6.0 5.5 700 5.6 4.6 5.0 600 4.0 500 400 3.0 300 617 677 684 2.0 200 1.0 100 0 0.0 FY02 1H FY02 2H FY03 1H NFS: Nissan Financial Service, sales finance company in Japan * Asset does not include off-balance asset
Slide 14: Sales Financing: Penetration (NFS)
Sales Financing: Penetration (NFS) NFS 60% 50% 40% 30% 20% 10% 0% FY01 FY02 FY03 1H NFS: Nissan Financial Service, sales finance company in Japan
Slide 15: Sales Financing: Asset & Operating profit (NMAC)
Sales Financing: Asset & Operating profit (NMAC) (Asset*) NMAC (OP) (Million $) 25,000 250 212 206 20,000 175 200 15,000 150 10,000 100 17,675 19,636 22,166 5,000 50 0 0 FY02 1H FY02 2H FY03 1H NMAC: Nissan Motor Acceptance Corporation, sales finance company in USA * Asset does not include off-balan
Slide 16: Sales Financing: Penetration (NMAC)
Sales Financing: Penetration (NMAC) NMAC 60% 50% Lease 40% 30% 20% Retail 10% 0% FY2001 FY2002 FY03 1H NMAC: Nissan Motor Acceptance Corporation, sales finance company in USA
Slide 17: Sales Financing: Asset & Operating profit (NCFI)
Sales Financing: Asset & Operating profit (NCFI) (Asset*) NCFI (OP) (Million CAD) 2,000 30 1,800 28 25 1,600 22 1,400 19 20 1,200 1,000 15 800 600 1,251 1,460 1,807 10 400 5 200 0 0 FY02 1H FY02 2H FY03 1H NCFI: Nissan Canada Finance Inc, , sales finance company in Canada * Asset does not include of
Slide 18: Sales Financing: Penetration (NCFI)
Sales Financing: Penetration (NCFI) NCFI 60% 50% 40% Lease 30% 20% 10% Retail 0% FY01 FY02 FY03 1H NCFI: Nissan Canada Finance Inc. , sales finance company in Canada
Slide 19: Sales Financing: Net Loss Ratio
Sales Financing: Net Loss Ratio NFS NMAC NCFI Lease: 0.10% Lease: 0.50% Lease: 0.13% FY03 1H Retail: 0.38% Retail: 0.98% Retail: 0.06% Lease: 0.15% Lease: 0.53% Lease: 0.09% FY02 Retail: 0.42% Retail: 1.06% Retail: 0.04% NFS: Nissan Financial Service, sales finance company in Japan NMAC: Nissan Moto
Slide 20: Sales Financing: Funding Sources
Sales Financing: Funding Sources Equity 8.6% Total funding 10.3% Inter-Company Loan amount ABS Off B/S 32.1% 3,345 billion Yen (= Total assets – Other liabilities + off balance sources) 1.6% S/T Loan 3.5% L/T Loan ABS On B/S 42.9% 1.0% Bonds NFS: Nissan Financial Service NMAC: Nissan Motor Acceptanc
Slide 21: Automotive: ROIC (Return On Invested Capital)
Automotive: ROIC (Return On Invested Capital) ROIC = Consolidated automotive operating profit (Auto) (Fixed auto assets + Auto Net working capital + Auto Cash on hand ) 20.0% 19.8% NISSAN 180 target : 20% 15.0% 12.7% 10.0% 7.5% 5.0% 1.3% 0.0% FY99 FY00 FY01 FY02 FY03 FY04
Slide 22: Employee stock options status
Employee “stock options” status Issue Date Granted Number Exercise Status Price Mar 1999 10 Million shares 554 JPY Vested Mar 2000 35 Million shares 429 JPY Vested Mar 2001 59 Million shares 764 JPY Vested Mar 2002 60 Million shares 880 JPY Unvested Mar 2003 12.4 Million 932 JPY Unvested shares Niss
Slide 23: Dividend policy
Dividend policy Three-year dividend policy FY 01 FY 02 FY 03 FY 04E (base) ¥8 ¥14 ¥19 ¥24 / share / share / share / share Interim: Interim: Interim: ¥0/share ¥4/share ¥8/share Year end: Year end: Year end: ¥8/share ¥10/share ¥11/share Nissan 180 payout ratio forecast FY 2001 FY 2002 FY 2003E FY 2004
Slide 24: Funding Strategy
Funding Strategy 1. Continue to fund core businesses p CAPEX: 420 billion yen (5-6% of net sales) p R&D : 360 billion (4.5-5.0% of net sales) 2. Ensure good access to liquidity p Cash p Commitment line p Capital market 3. Diversify funding sources
Slide 25: FY03 Outlook
FY03 Outlook Financial forecast Revenue (billion yen) 7,450.0 Operating profit (billion yen) 820.0 Operating margin 11.0% Ordinary profit (billion yen) 781.0 Net profit (billion yen) 495.0 Foreign exchange assumption 2H: ¥110/$1 2H: ¥125/€1