Nissan Announces Record Results for FY 2001

TOKYO, May 9 Nissan Motor Company announced today preliminary financial results fiscal year 01, ended March 31, 2002. The company declared the completion of the Nissan Revival Plan (NRP) one full year ahead of schedule after fulfilling all its official commitments. It expects to report a consolidated operating profit of 490 billion yen (US$3.92 billion, Euro 4.50 billion) and a consolidated net profit after tax of 372 billion yen (US$2.97 billion, Euro 3.42 billion). Carlos Ghosn, president and CEO of Nissan, also explained the major action plans of "NISSAN 180" the company's new three-year business plan that began on April 1, 2002.

"Through NRP, we transformed a struggling company into a good company; through Nissan 180, we will transform a good company into a great company", said Ghosn.

Nissan expects to report consolidated net sales of 6.2 trillion yen (US$ 49.56 billion, Euro 57 billion), up 1.8% from last fiscal year. Consolidated operating profit is expected to jump 68% from 290.3 billion yen last year to 490 billion yen (US$ 3.92 billion, Euro 4.50 billion) this year. The resulting operating margin should come to 7.9% of net sales, the highest in the company's history.

Nissan expects net automotive debt to decline by 518 billion yen (US$ 4.14 billion, Euro 4.76 billion) to 435 billion yen (US$ 3.48 billion, Euro 4.00 Billion) well below the NRP commitment of 700 billion yen. The swift reduction of debt is due to the strong recovery of profits and the continued sale of non-core assets including the sale of the entire portfolio of marketable securities in Japan.

"This is the fruit of NRP, fruit that even the most optimistic of outside observers in 1999 didn't even think of," said Ghosn.

Ghosn unveiled the main action plans of NISSAN 180, which is based on four pillars; higher revenue, less costs, more quality and speed and synergies from the Alliance with Renault.

Under NISSAN 180 the company aims to add an additional 1 million unit sales by the end of FY 04 by continuing its blitz of new products, launching at least 28 new vehicles over three years. The company will enter new segments and new geographic markets worldwide to fuel this growth.

In addition to increased revenue, Nissan will continue to improve efficiencies as the company has set cost reduction plans globally. Ghosn announced targets for areas including purchasing, manufacturing, logistics and distribution. The consolidated operating margin resulting from the combination of growth and cost reductions will reach 8% under the plan.

To support its growth strategy, Nissan will increase its capital expenditures to 5.5% of net sales and maintain R&D spending between 4.0 to 4.5%. However, as the company continues to generate higher profits and completes it divestiture of non-core assets, Nissan foresees the elimination of net automotive debt by the completion of NISSAN 180.

"We have a clear idea about our future. The new fiscal year started under the banner of Nissan 180; a plan that opens a new perspective for our company, a perspective of lasting profitable growth. Now we have to earn it", said Ghosn.

Highlights of Consolidated Financial Results:

Unit sales

Nissan sold 2,597,000 vehicles worldwide in FY01, down by 1.4% from FY 00. However the company showed a better performance in the second half than in the first-half as new products such as the award-winning Altima in the United States and all-new March in Japan were launched. Sales declined 3.6% year on year in the first half, but increased 0.8% in the second half.

Net sales

Consolidated net sales came to 6.2 trillion yen, up 1.8% from last year. However, sales would have increased by 5.4% with consistent accounting methods and scope of consolidation. The company instituted a change this year to bring accounts more in line with internationally accepted standards with the deduction of C&I (contest and incentive) spending in the United States and Mexico directly from revenues rather than accounting for them as expense items. The scope of consolidation was reduced as the company spun off 18 affiliates, which had been fully consolidated the previous year.

Operating income

Nissan expects consolidated operating profit to improve from 290.3 billion yen in fiscal year 00 to a record 490 billion yen in fiscal year 01. As a percentage of net sales, the operating profit margin came to a record 7.9%.

Net income

Consolidated net income after tax is expected to total 372 billion yen (US$ 2.97 billion, Euro 3.42 billion) a 40.9 billion yen improvement compared to 331.1 billion yen for fiscal year 00. This is the best net result in the company's history.

Indebtedness

Net automotive debt decreased sharply, exceeding forecasts and NRP commitment. Due to increased generation of cash from operations and the continued sale of non-core assets, which totaled 192 billion yen in FY01, net automotive debt stood at 435 billion yen at the end of the fiscal year, down 518 billion yen from FY 00.

Dividend

As a result of the improvement in its financial condition, Nissan's board of directors has decided to propose a 14% increase in its annual dividend from 7 to 8 yen per share at the next annual general shareholders' meeting in June 2002.

Outlook and FY 02 Forecast

Nissan issued the following outlook for the fiscal year ending March 31, 2003 including risks and opportunities.

Risks for the year include a decline in the value of the dollar relative to the yen and a harsher competitive environment than planned.

Opportunities include potentially more favorable total industry volumes, particularly in the United States. However, the biggest opportunity for the year lies in the swift implementation of Nissan 180.

Based on this outlook Nissan filed with the Tokyo Stock Exchange a forecast for fiscal year ending March 31, 2003 with consolidated net sales of 6.5 trillion yen, operating profit of 553 billion yen, ordinary profit of 488 billion yen and a net profit of 380 billion yen. The company also indicated that consolidated net automotive indebtedness should come to less than 250 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 125.1 yen = 1 US$ and 108.8 yen = 1 Euro, the average values for the full fiscal year ending on March 31, 2001.

SOURCE: Nissan North America