July 29, 2015

Fiscal Year 2015 First-quarter Financial Results
Nissan Motor Co., Ltd.
Joji Tagawa, Corporate Vice President

Today, Nissan is reporting solid financial results for the first quarter of fiscal year 2015 against a mixed backdrop for the global economy, and a varied performance in the different regions in which we operate.
For the quarter, net revenue, operating profit, net income and automotive free cash-flow all improved versus the comparable prior-year period. Our results were supported by encouraging demand in North America and Western Europe as well as the favorable impact of the year over year change in the yen-dollar exchange rate. Together, these trends as well as our ongoing actions to improve operational efficiency allowed us to offset the slow sales pace in Japan and several emerging markets, as well as negative currency movements in other countries.
For the three month period, consolidated net revenues increased 17.6% to 2.9 trillion yen. Operating profit totaled 193.7 billion yen, which equates to an operating margin of 6.7%. Net income increased to 152.8 billion yen, which represents a 5.3% net margin. Free cash flow for the automotive business was 109.5 billion yen and we ended the period with an automotive net cash position of 1.45 trillion yen.
These figures indicate that Nissan is on the right path towards our Power 88 mid-term goals.
Before going through the financial results in more detail, I will outline some business highlights for the quarter.

PRODUCT OFFENSIVE

During the period, we maintained our new product offensive. In the US, we launched the 2016 Maxima to positive reviews. This flagship sedan has been redesigned to appeal to American consumers with bolder styling, a more powerful engine and the latest safety and connected technology system.
In China, we unveiled the Lannia, which was developed for young Chinese customers and we launched the Venucia T70, an all-new compact SUV.
In Japan, we launched the Hybrid version of the X-Trail, one of our most successful models in Japan and globally. We also announced the additional production of the Rogue in Kyushu from next spring for export to North America, and we introduced a taxi version of the NV200 for the market.
Our product offensive is continuing with the launch of the NP300 Frontier in Latin America and the Caribbean. This begins a series of back to back pick-up launches in 33 markets.

QUALITY

Also in the quarter, several Nissan and Infiniti models were recognized in the recent JD Power Initial Quality Study in the US. The 2015 Nissan Sentra was named the top Compact Car.
The Infiniti QX70 was the highest ranked midsize premium SUV, and the QX80 was the number one large premium SUV. The QX50 was also named one of the top three compact premium SUVs. Infiniti was ranked among the top five nameplates in the overall ranking, out-performing several rival European premium brands.
Nissan also received honors from the Insurance Institute for Highway Safety. The completely redesigned 2015 Nissan Murano was awarded a "Top Safety Pick Plus" vehicle safety rating.

BRAND

These awards help reinforce perceptions of the Nissan brand. We further enhanced the brand through our sports partnerships, as demonstrated by our support for the UEFA (pronounced u-ey-faa) Champions League, the Yokohama F-Marinos and next year’s Olympic Games in Rio de Janeiro. In the US, Nissan and the National Football League’s Tennessee Titans recently announced the formation of a 20-year, exclusive naming-rights partnership that rebrands Nashville's downtown stadium as Nissan Stadium. This will increase Nissan’s visibility, as Nissan will be named by the media in connection with numerous sporting events and concerts held at the stadium.

ZERO EMISSIONS

Nissan is also supporting the expansion of the world’s charging infrastructure. During the past quarter, Nissan extended its "No Charge to Charge" promotion to 17 US markets with the addition of the Boston and Denver metropolitan areas. We also enhanced our charging presence in Japan, where we forged a partnership with Yokosuka city. There are now more than 14,000 EV chargers, excluding home chargers.
And in South Africa, we signed a memorandum of understanding with BMW to plan and build a national grid of electric vehicle charging stations for use by Nissan and BMW electric vehicles.
In addition, Nissan and Green Charge Networks, the largest provider of commercial energy storage, joined forces to deploy second-life lithium-ion vehicle batteries for stationary commercial storage in the U.S. and international markets.

ALLIANCE

Last month, the Renault-Nissan Alliance has sold its 250,000th electric vehicle. The Alliance is the world’s leader in zero-emission mobility and accounts for half of the electric vehicles sold worldwide. The Nissan LEAF is the best-selling electric vehicle of all time, with more than 180,000 units sold.
And earlier this month, the Alliance, announced record synergies of 3.8 billion euros for 2014, up from 2.9 billion euros the previous year. The Alliance is targeting synergies of at least 4.3 billion euros by the end of fiscal year 2016. These benefits will flow from deeper collaboration in four key business areas: engineering, manufacturing and supply chain management, purchasing, and human resources.

FY 15 Q1 SALES PERFORMANCE

During the three months ending June 30th, global total industry volumes – or TIV – reached 22.02 million units, an increase of 1.5%.
Nissan saw unit sales rise to 1.29 million units, up 4.4% from 1.24 million in the same quarter of the previous fiscal year. Nissan’s global market share was up 0.2 percentage points to 5.9%.
Looking at our key markets in detail…
In Japan, TIV fell by 5.5% to 1.1 million units. Nissan saw unit sales decline by 10% to 120 thousand units, resulting in a market share of 11.0%. Conditions remain challenging, particularly in segments for models such as NOTE and Serena. But we have been encouraged by robust sales of the X-Trail and DAYZ ROOX.
In China, where our sales performance is measured on a calendar basis, TIV was up 5.7% to 5.94 million units. Nissan unit sales increased to 296 thousand units, equivalent to a market share of 5.0%.
The Sylphy series and X-Trail continue to drive demand. Although we were negatively impacted by the decline in light commercial vehicles sales – due to new emission regulations – our China sales are in line with our expectations.
In North America, Nissan achieved record sales. TIV in the U.S. was up 3.3% at 4.57 million units. Nissan’s sales rose by 5.5% to 369 thousand units, equivalent to a market share of 8.1%. Strong demand for models including Altima, Rogue and Sentra underpinned this performance.
In Canada, Nissan also outperformed the market as unit sales jumped 13.6% to 37 thousand units, equivalent to a market share of 6.5%.
In Mexico, Nissan maintained its number-one position with unit sales of 80 thousand units up 25%, equivalent to a market share of 26.3%.
In Europe, TIV increased by 0.7%. Nissan sales rose by 10.7% to 189 thousand units, representing a market share of 4.0%. This performance was driven by demand for products such as Qashqai and Juke, which established our leadership in the crossover segment. The company ended the period as the best-selling Asian brand in Europe.
In Russia, despite a 36.6% decline in the market, Nissan’s sales declined by 12.6% to 34 thousand units. As a result, our market share rose to 8.5%.
In other markets, TIV fell by an estimated 3.8% to 4.82 million units. Nissan’s sales in the other markets fell by 1.6% to 203 thousand units. Among these markets, sales in Asia and Oceania declined 3.9% to 87 thousand units. Sales in Latin America declined 2.5% to 42 thousand units and sales in the Middle East decreased 6.3% to 49 thousand units. Sales in Africa increased 22.3% to 25 thousand units.

FY15 Q1 financial performance

Now let’s move to our overall financial performance for the period. As with previous quarters, Nissan is presenting its financial performance under the equity accounting method for our joint venture in China.

On this basis:

• Consolidated net revenues increased 433.8 billion yen to 2.9 trillion yen, primarily driven by the increase in volume and the impact of FX currency translation on overseas revenues.
• Operating profit totaled 193.7 billion yen, up 71.1 billion yen or 58% from the comparable prior year period.
• Net income was 152.8 billion yen which was up 40.7 billion yen or 36.3% versus the comparable prior year period.

Looking at the operating profit movement in detail:

• FX had a positive impact of 32.0 billion yen.
• Cost items, including purchasing cost reduction efforts resulted in net savings of 42.6 billion yen.
• Volume and mix produced a positive impact of 64.5 billion yen.
• The increase in selling expenses resulted in a 41.9 billion yen negative movement.
• R&D expenses increased by 7.4 billion yen.
• Manufacturing expenses increased by 3.2 billion yen.
• Other items had a negative impact of 15.5 billion yen.

For the period, free cash flow was 109.5 billion yen for the automotive business. Nissan continued to enjoy a solid automotive net cash position of 1.45 trillion yen. While this increased from the 1.39 trillion yen at the end of fiscal year 2014, it is 530.8 billion yen above the net cash position of 916.3 billion yen that we reported at the same point in fiscal 2014.

On a management pro forma basis, which includes the proportional consolidation of our Chinese joint venture:

• Net revenues rose to 3.1 trillion yen for the first quarter.
• Operating profit increased to 219.7 billion yen or 7% of net revenue.
• Net income rose to 152.8 billion yen.
• Automotive free cash flow was 130.4 billion yen; and
• We ended the period with automotive net cash of 1.6 trillion yen.

Conclusion

Relative to our financial outlook for the year, we are maintaining our previously announced full-year guidance.
We also continue to project a full year dividend of 42 yen per share, a 27% increase from the prior year.
In conclusion, these results show Nissan is making progress towards delivering our Power 88 objectives. These remain the achievement of a sustainable 8% operating profit margin by the end of the plan period and a target of 8% global market share.

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*As of the beginning of fiscal year 2015, "net income" means "net income attributable to owners of the parent".