Financial Performance - Nissan's net revenue for the first half of the fiscal year was flat at ¥5.984 trillion, while operating profit fell by 90% year-over-year to ¥32.9 billion, and net income decreased by 94% to ¥19.2 billion [4][7][8] - Total global retail sales decreased by 1.6% to 1.596 million units, with significant declines in China (5.4%), Japan (2.4%), and North America (1%), while Europe saw a slight increase of nearly 1% [6][8] - Free cash flow was negative at ¥448.3 billion, but the company maintained a net cash position of ¥1.36 trillion [7][8] Business Line Performance - The automotive business net revenue was ¥5.35 trillion, with a net loss of ¥116.1 billion [7] - Global production volume was reduced by 7.9% to 1.56 million units to adjust inventory levels [6] Market Performance - Sales in China are projected to decrease by 13.1%, while unit sales in Japan are expected to reach 480,000 units, and North America is forecasted to see a 6.2% increase [11][12] - The company anticipates a decline in sales in Europe by 3.1% and a slight decrease of 0.2% in other markets [11] Company Strategy and Industry Competition - Nissan is revising its full-year guidance, expecting revenues of ¥12.7 trillion and operating profit of ¥150 billion, which is ¥350 billion lower than the previous forecast [12][13] - The company is implementing a turnaround plan to create a lean and resilient business structure, including a 20% reduction in global production capacity and a headcount reduction of 9,000 [24][25][58] - Strategic partnerships with Renault, Mitsubishi Motors, and Honda are being promoted to enhance competitiveness and ensure sustainable growth [21][28] Management Commentary on Operating Environment and Future Outlook - Management acknowledged the significant challenges faced, including the inability to meet sales plans and the impact of rising costs and competition, particularly in the U.S. market [16][17][34] - The CEO expressed a commitment to rebuilding the company and enhancing brand power to improve market presence [29][41] Other Important Information - The company has decided not to pay an interim dividend due to the current situation, with the year-end dividend to be determined later [14] - A new Chief Performance Officer will be appointed to oversee sales and profit, with further changes to the leadership team planned [22][44] Q&A Session Summary Question: What are the causes behind the underperformance in U.S. operations? - The CEO identified the inability to sell core models and the lack of hybrid offerings as major issues, along with increased competition and rising incentives impacting profitability [34][38] Question: How will the U.S. presidential election impact business? - The CEO mentioned ongoing lobbying efforts regarding tariffs and emphasized the need to monitor the situation closely [40] Question: Will the partnership discussions with Honda be affected by Nissan's performance? - The CEO confirmed that discussions with Honda will continue as the focus remains on maximizing competitiveness through collaboration [46][47] Question: Is the sales target of 1 million unit increase still achievable? - The CEO acknowledged that achieving the original target is uncertain and emphasized the need for immediate actions to address current performance issues [53][54] Question: What specific actions are being taken to stabilize the business? - The company is implementing cost reductions, production adjustments, and a focus on enhancing product competitiveness [24][25][26]
Nissan Motor(NSANY) - 2024 Q2 - Earnings Call Transcript