Nissan Announces Record Results For FY 2000
30 May 2001
Net Profit Of 331.1 Billion Yen Fulfills First Commitment Of NRP
Tokyo (May 17) - Nissan Motor Company announced today financial results for fiscal year ended March 31, 2001. For the first full-year of the Nissan Revival Plan (NRP), the company reported a consolidated net profit after tax of 331.1 billion yen (US$2.7 billion, Euro 3.0 billion).
“Nissan is back. The Nissan Revival Plan has produced the best financial performance in the company’s history as far as we can reliably trace it,” said Carlos Ghosn, president of Nissan Motor Company. “We have more than tripled operating profits and cut debt to the lowest level in fifteen years. The NRP is fully engaged and the people at Nissan are stimulated and driven by the results they have delivered.”
Consolidated net automotive debt declined by 396 billion yen (US$3.2 billion, Euro 3.6 billion) throughout the year, and for the first time in 15 years came in below 1 trillion yen at 953 billion yen (US$7.7 billion, Euro 8.7 billion).
Nissan reported consolidated net sales of 6,090 billion yen (US$49.1 billion, Euro 55.9 billion), up 1.9% from last fiscal year and more than tripling consolidated operating profit from 82.6 billion yen last year to 290.3 billion yen (US$2.3 billion, Euro 2.7 billion). The company’s consolidated operating margin came to 4.75% of net sales, higher than the NRP commitment of 4.50% for fiscal year 2002, two years in advance.
The company achieved these results despite an 83.6 billion yen (US$674.2 million, Euro 767.0 million) negative impact of foreign exchange.
“We are not ready to cast off the mindset of an underdog. We have moved from the emergency room to the recovery room,” said Ghosn. “We are as passionate about our current achievements as we are about our future goals.”
Ghosn also unveiled Nissan’s guide for the post NRP period from fiscal years 2003 through 2005. The guide targets a global volume increase of 1 million units, the top level of profitability in the industry and the elimination of Nissan’s net automotive debt.
Highlights of Consolidated Financial Results:
When Nissan announced NRP, the company indicated it had not factored in growth, however, during fiscal year 2000, Nissan global unit sales increased 4.0% from 2.530 million to 2.632 million units.
Globally, volume increased in all major markets with the exception of Japan where Nissan sold 733,000 units, down 3.6%. In North America (USA and Canada) volume rose 5.3% to 793,000 vehicles despite a U.S. market slowdown in the second half. Sales in Europe increased 3.5% to 533,000 units from last year. Sales in other global markets totaled 573,000 units, up 14.1%, including a 28.3% increase in Mexico and strong performance in Thailand and Singapore.
Consolidated net sales came to 6,090 billion yen (US$49.1 billion, Euro 55.9 billion), up 1.9% from last year. On a consistent basis, changes in accounting methods and the scope of consolidation accounted for a net 0.5% increase. Other primary factors of the increase include the net impact of volumes, mix and prices for a total of 4.7%, offsetting a negative impact of foreign exchange variations of 3.3%.
Nissan’s full year consolidated operating profit improved from 82.6 billion yen to 290.3 billion yen (US$2.3 billion, Euro 2.7 billion), more than tripling last year’s performance and delivering an operating margin of 4.75% compared to 1.4% last year.
Nissan reduced purchasing costs by 11% with the rapid implementation of NRP and close work with suppliers. In all functions and regions, the company surpassed its cost reduction commitments.
Despite a weakening yen in the last quarter, foreign exchange rates generated a significant negative impact to operating profits of 83.6 billion yen (US$674.2 million, Euro 767.0 million). While the yen was stronger on average for the year against all currencies, the negative impact included 63.1 billion yen (US$508.9 million, Euro 578.9 million) from European currencies and 9.4 billion yen (US$75.8 million, Euro 86.2 million) from the U.S. dollar.
Consolidated ordinary profit increased by 283.9 billion yen from a loss of 1.6 billion yen in 1999 to a profit of 282.3 billion yen (US$2.3 billion, Euro 2.6 billion). Net non-operating expenses declined by 76.2 billion yen including a 29.5 billion yen drop in net financial costs to 31.1 billion yen (US$250.8 million, Euro 285.3 million) as Nissan reduced net automotive indebtedness and re-engineered funding to lower cost sources. Ordinary income also includes 9.2 billion yen (US$74.2 million, Euro 84.4 million) in profits coming from affiliates including domestic parts suppliers.
Net income before taxes came to 289.7 billion yen (US$2.3 billion, Euro 2.7 billion). Nissan posted net extraordinary profits of 7.4 billion yen (US$59.7 million, Euro 67.9 million) and no further charges for restructuring were taken in fiscal year 2000.
Minority interest represented a charge of 21.1 billion yen (US$170.2 million, Euro 193.6 million) as a result of the improved profits of fully consolidated companies not fully owned by Nissan.
Current taxes amounted to 68.1 billion yen (US$549.2 million, Euro 624.8 million). However, the company recognized 130.6 billion yen (US$1.1 billion, Euro 1.2 billion) in deferred tax assets for the year.
Consolidated net income after tax totaled 331.1 billion yen (US$2.7 billion, Euro 3.0 billion) a 1.01 trillion yen improvement compared to a loss of 684.4 billion yen for fiscal year 1999. This is, by far, the best result in the company.
Indebtedness and financial
As of March 31, 2001, consolidated net automotive debt stood at 953.0 billion yen (US$7.7 billion, Euro 8.7 billion), down 396 billion yen from 1,349 billion yen at the end of fiscal year 1999. Total net indebtedness including the sales finance companies was 2,544 billion yen (US$ 20.5 billion, Euro 23.3 billion).
Consolidated shareholder's equity as of March 31, 2001 came to 957.9 billion yen (US$7.7 billion, Euro 8.8 billion), an increase of 394.1 billion compared to 563.8 billion yen as of March 31, 2000, after re-classification of translation adjustment to equity allowing Nissan to propose a 7-yen per share dividend. Net automotive debt/equity ratio came to 1, a substantial improvement from 2.4 in 1999 and the lowest ratio since 1989.
Nissan issued the following outlook for the fiscal year ending March 31, 2002 including risks and opportunities.
Risks for the year include the threat of a further slowdown in the worldwide auto industry and the potential for increased incentives.
Opportunities include potentially more favorable foreign exchange rates than forecast. However, the biggest opportunity for the year remains in the strong implementation of the NRP.
Based on this outlook Nissan filed with the Tokyo Stock Exchange a forecast for fiscal year ending March 31, 2002 with consolidated net sales of 6,300 billion yen, operating profit of 350 billion yen, ordinary profit of 290 billion yen and a net profit of 330 billion yen. The company also indicated that consolidated net automotive indebtedness should come to less than 850 billion yen by the end of the period.
Note: Amounts expressed in US$ and Euro in this press release have been translated for convenience only at 124 yen = 1 US$ and 109 yen = 1 Euro, the approximate rate of exchange on March 31, 2001.