Nissan Motor Co., Ltd. (PNK:NSANY) Q3 2023 Earnings Call Transcript

Nissan Motor Co., Ltd. (PNK:NSANY) Q3 2023 Earnings Call Transcript February 8, 2024

Nissan Motor Co., Ltd. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Julian Krell : Welcome to the Nissan Financial results for the Third Quarter of Fiscal Year ’23 Investor and Analysts session. This is Julian Krell speaking, Head of Investor Relations. Thank you very much for joining. The presentation material can be found on the Nissan IR website. Please be informed of the disclaimer included on the last page of the document and read it carefully. Thank you. For today's quarterly financial results presentation I’m joined by Mr. Ma, CFO. Mr. Ma will start with the highlights of the third quarter and then he will continue with the financial results followed by the outlook. We will conclude this call with a Q&A session. I’m now handing over to Mr. Ma. Thank you very much for your time.

Stephen Ma : Thank you, good evening and good afternoon to everybody. So welcome to the third quarter result for the nine months ending December 31st 2023. So before addressing our results I want to express my condolences for everyone impacted by the Noto earthquake. And obviously our thoughts are with the families, friends and communities affected. I also want to thank the entire Nissan team and partners for delivering steady results in the phase of challenges. So let me begin with our third quarter highlights. Nissan delivered significant improvement on several measures. Net revenue up 22%; operating profit rose 65%, net income more than double versus last year and we have been very encouraged by a rising consumer demand for our products.

A modern car on a highway, its wheels reflecting the setting sun.

And we have enhanced shareholder return by restoring interim dividend and buying back shares. For the nine month period, global retail sales rose by 1.2% year-over-year to 2.44 million units. Excluding China, we achieve growth of 20% as demand improved in key regions including Japan, North America, and Europe. Unit sales in Japan rose by 8.4%, in North America by 30%, and in Europe by17%. This all helped offset the challenging market condition in China where retail sales declined by 35%. In terms of production, global output remain flat, however excluding China, production rose by 21% to meet the rising consumer demand. During the latest quarter, global retail sales decreased by 2.7% to 819,000 units while excluding China unit sales increase by 15% and production rose by 13 % amid demand for new models.

Globally, quarterly production volume were 843,000 units. Though the third quarter volume was lower, our counter measures to improve logistics capacity and start of new model deliveries to dealership have already shown a positive impact on our sales performance in January. Therefore we are confident to increase our sales performance in Q4. This slide shows our key financial performance indicators on both an equity basis and on a proportional basis. On an equity basis, net revenue increased by 22% to ¥9.17 trillion for the nine month period. On the same basis, operating profit for the period increased to ¥478 billion with a solid operate margin of 5.2% and an improved Automotive segment profit of ¥241 billion. Net income total to ¥325 billion and free cash flow for the Auto business rose to ¥182 billion.

Net cash was at a healthy ¥1.33 even after the restoration of interim dividend and the share buyback. On a proportionate basis, including contribution from our China operation, net revenue rose to ¥9.8 trillion. Operating profit was ¥487 billion representing operate margin of 5%. Given the fast changing market condition, this is a solid performance. Turing to the home market of Japan, retail sales increased by 8.4% to 336,000 units. The main driver was a demand for the Serena, X-Trail, Sakura and DAYZ, especially the e-POWER versions of these models. The proportion of electrified models sold in Japan is more than half our sales at 53% and net revenue per unit increased by 133%. Production volume increased by 28.4% to 551,000 units and Nissan has continued to win awards for innovations including Japan's Technology Car of the Year award for Serena.

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