Financial Data and Key Metrics Changes - For the fiscal year 2022, Nissan's net revenue increased to ¥10.6 trillion, up ¥2.17 trillion from the previous year, driven by improved net revenue per unit and a weaker yen [18][24] - Operating profit rose to ¥377.1 billion, representing an operating margin of 3.6%, an increase of ¥129.8 billion from the prior year [18][24] - Net income for the fiscal year was ¥221.9 billion, which would have been ¥341.9 billion excluding a one-time loss from exiting the Russian market [18][25] Business Line Data and Key Metrics Changes - Global unit sales for the fiscal year declined by 14.7% to 3.305 million units, with significant drops in China and North America, while Japan saw a 6.1% increase [6][7][8] - In North America, unit sales decreased by 13.5% to 1.023 million vehicles, while in Europe, sales fell by 9.2% to 308,000 units [8][10] - The electrification ratio in Japan increased by 9 points to 48%, with cumulative electrified unit sales surpassing 800,000 since 2016 [12] Market Data and Key Metrics Changes - In China, unit sales dropped by 24.3% to 1.045 million units due to COVID-related production issues, while Japan's sales increased amid rising demand for electrified models [6][7] - North American sales increased by 17.4% to 316,000 units in Q4, while European sales rose 28.7% to 100,000 units, reflecting strong demand for electrified vehicles [10][14] - Overall, global production volumes fell by 8.8% year-on-year to 854,000 units in Q4, with a significant decline in China [9] Company Strategy and Development Direction - Nissan is transitioning from a volume-focused strategy to a value-oriented approach, emphasizing profitability and customer experience [11][28] - The company aims to increase its electrification mix to over 55% by 2030, with a current target of 11% for FY '22 [28] - Nissan NEXT, initiated in May 2020, focuses on rationalizing production capacity and costs while enhancing core markets and technologies [37][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges such as semiconductor shortages and COVID disruptions but expressed optimism about gradual recovery and improved production capabilities [30][31] - The forecast for FY 2023 includes a projected global production volume of 4.1 million units and net revenue expected to rise by 17% to ¥12.4 trillion [32][34] - Management emphasized the need for agility in response to rapidly changing market conditions, particularly in China [42] Other Important Information - Free cash flow for the automotive business was positive at ¥186.7 billion, indicating strong liquidity [19][21] - The company plans to propose a dividend of ¥10 per share for FY 2022 and aims for ¥15 or more per share for FY 2023 [35][36] - Nissan is focusing on developing all-solid-state batteries and enhancing its e-POWER technology to improve competitiveness in electrification [39][40] Q&A Session Summary Question: U.S. production and sales forecast - Management indicated plans to grow production and sales in the U.S. by enhancing product lines and improving dealer relationships, aiming for a 29% growth rate [47][48] Question: Sales finance business forecast - The sales finance business is expected to face challenges due to rising interest rates and delinquencies, but management remains confident in its solid financial position [50][51] Question: China market performance and strategy - Management acknowledged the rapid changes in the Chinese market and emphasized the need for agility and responsiveness to customer demands [53][60] Question: Nissan NEXT performance assessment - Management highlighted improvements in brand perception and dealer relationships as key factors in the ongoing transformation, despite challenges in achieving operating margin milestones [63][64] Question: Raw material impact and production volume guidance - Management noted that raw material prices have plateaued and are expected to stabilize, allowing for better production volume guidance moving forward [80][82]
Nissan Motor(NSANY) - 2022 Q4 - Earnings Call Transcript