Nissan Reports 2002 Record Profitability

First year of NISSAN 180 eliminates debt and yields net income of 495 billion yen

TOKYO, April 23 -- Nissan Motor Company announced today that it expects to report record operating profits of 737 billion yen (US $6.04 billion, euro 6.25 billion) for fiscal year 2002, which ended March 31, 2003. In announcing its preliminary financial results for the full year, Nissan President and CEO Carlos Ghosn said the company expects to report a consolidated net profit after tax of 495 billion yen (US $4.06 billion, euro 4.19 billion). Nissan expects its net automotive debt -- which stood at 2.1 trillion yen at the start of fiscal year 1999 -- to be completely eliminated.

"Nissan's revival is a reality," said Ghosn. "Three years ago, our business was in accelerated decline. Today, we're not only back in the global race, we're among the pacesetters."

Nissan expects to report consolidated revenues of 6.85 trillion yen (US $56.15 billion, euro 58.05 billion), up 10.6% from the prior fiscal year. Consolidated operating profit is expected to jump 50.7% to a record 737 billion yen, up from 489.2 billion yen in fiscal year 2001. The resulting operating margin should reach 10.8%, which is the top level in the global automotive industry.

At constant accounting standards, Nissan expects to report a net cash position of 8 billion yen (US $66 million, euro 68 million). Its net automotive debt has been eliminated, down from 431.7 billion yen (US $3.54 billion, euro 3.66 billion) at the beginning of fiscal year 2002. Acknowledging Nissan's accomplishment, Ghosn added: "Debt elimination is no longer a driver in the management of our business. From now on, return on invested capital - which is estimated to reach 19.5% in fiscal year 2002 - will take center stage."

The positive financial results were supported by a wave of new products. Fiscal year 2002 marked the biggest product year in Nissan history, with 12 all-new models representing 21 regional product events. Nissan sold 2,771,000 vehicles worldwide, an increase of 174,000, or 6.7%, over fiscal year 2001 sales.

"Our sales were made on the merits of our products themselves. They were not inflated by additional incentives," said Ghosn. "Our strategy continues to be based more on optimizing profitability than maximizing volumes."

Today's announcement summarized achievements made during the first year of NISSAN 180, the company's three-year plan aimed to establish sustainable, profitable growth. The plan has three commitments: to achieve 1 million additional sales worldwide by the end of fiscal year 2004, compared to fiscal year 2001; to achieve an 8% operating margin; and to achieve zero net automotive debt, using constant accounting standards. Two of the three commitments have been realized in the first year of the plan.

  Highlights of the consolidated financial results:

  Unit sales

Nissan sold 2,771,000 vehicles worldwide in FY02, an increase of 6.7% from FY01. Full-year sales were 2.4% below the half-year forecast made in October 2002 and 0.8% below the initial forecast made in May 2002. The deficit compared to forecasts was mainly due to shortfalls in the U.S. and European sales, particularly in the second half. Fiscal year 2002 sales and market share increased in each region except Europe.

Sales revenues

Consolidated sales revenues are expected to reach 6.85 trillion yen (US $56.15 billion, euro 58.05 billion), up 10.6% from the prior year, including the expansion of the scope of consolidation, primarily as a result of the integration of Diamondmatic (the former automatic transmission and CVT affiliate of Mitsubishi) into JATCO. On a consistent basis, the increase was 9.8%. There were no other accounting method changes, but foreign exchange rates produced a negative impact of 87 billion yen.

Operating income

Nissan expects consolidated operating profit to improve by 50.7% - from 489.2 billion yen in FY01 to a record 737 billion yen (US $6.04 billion, euro 6.25 billion) in FY02. As a percentage of net sales, the operating profit margin will reach 10.8%, which is the highest operating profit margin in the global automotive industry.

Net income

Consolidated net income after tax is expected to total 495 billion yen (US $4.06 billion, euro 4.19 billion), a 33% improvement compared to 372.3 billion yen for FY01. Earnings per share came to 110 yen.

Indebtedness

The company's net automotive debt has been totally eliminated, down from 431.7 billion yen (US $3.54 billion, euro 3.66 billion) at the beginning of FY02. Nissan expects its net automotive cash position to be 8 billion yen (US $66 million, euro 68 million) at the end of FY02 at constant accounting standards.

Dividend

At the next annual general shareholders' meeting on June 19, Nissan's board of directors will ask shareholders to approve a dividend of 14 yen per share for FY02.

Outlook and FY03 forecast

Nissan issued the following outlook for the fiscal year ending March 31, 2004. Risks for the year include weaker economic conditions in Japan and further decreases in the total industry volume and/or even higher-than- foreseen incentives in the United States and Europe. Opportunities lie in the accelerated implementation of all the action plans of NISSAN 180.

Based on this outlook, Nissan filed a forecast for the fiscal year ending March 31, 2004, with the Tokyo Stock Exchange. Full-year consolidated net sales are expected to reach 7.45 trillion yen (US $62.08 billion, euro 57.31 billion), an increase of 8.8% from FY02. Operating profit is expected to be 820 billion yen (US $6.83 billion, euro 6.31 billion), an increase of 11.3%. Ordinary profit is expected to be 781 billion yen (US $6.51 billion, euro 6.01 billion), an increase of 10.2%. The company expects to achieve a net profit of 495 billion yen (US $4.13 billion, euro 3.81 billion), with the expectation of a return to normal tax treatment in Japan. Net cash generated by operations is estimated at 100 billion yen (US $833 million, euro 769 million) even after the 120 billion yen investment to buy the 50% stake in Dong Feng.

Note: Amounts in dollar and euro are translated for the convenience of the reader only, at the rates of 122 yen/dollar and 118 yen/euro, the average rates for the full fiscal year ending March 31, 2003. Forecast rates are translated at the approximate exchange rates as of April 23, 2003, which are 120 yen/dollar and 130 yen/euro.