Nissan Motor Co., Ltd.
Annual Report 2015

Plain-text annual report

ANNUAL REPORT 2015 CONTENTS CONTENTS This annual report presents the results of Nissan Motor Corporation’s business activities for fiscal 2014. It also provides an opportunity for investors to deepen their understanding of the Nissan management team. President and CEO Carlos Ghosn and CFO Joseph Peter share their vision of Nissan’s philosophy and the direction the company is heading today. 01 Viewing this Report This Annual Report is an interactive PDF. You can use the navigation tabs and buttons to access the information you need. l Section Tabs CONTENTS CORPORATE FACE TIME TOP MESSAGE Click the tabs to jump to the top page of each section. l Navigation Buttons l Link Buttons Go back one page Jump to information on the web Return to previously viewed page Go forward one page ■ Financial Data To obtain more detailed financial information, please visit our IR website. website ■ This annual report contains forward-looking statements on Nissan’s plans and targets, and related operating investment, product planning and production targets. Please note that there can be no assurance that these targets and plans will actually be achieved. Achieving them will depend on many factors, including Nissan’s activities and development as well as the dynamics of the automobile industry worldwide and the global economy. ■ For further information, please contact: Nissan Motor Co., Ltd. Investor Relations Department 1-1, Takashima 1-chome, Nishi-ku, Yokohama-shi, Kanagawa 220-8686, Japan Tel: +81 (0)45-523-5520 Fax: +81 (0)45-523-5771 E-mail: nissan-ir@mail.nissan.co.jp Global Corporate Communications Department Global Communications Division Tel: +81 (0)45-523-5552 Fax: +81 (0)45-523-5770 Cover photo: TITAN NISSAN MOTOR CORPORATION ANNUAL REPORT 201502 VISION Nissan: Enriching People’s Lives Nissan has a clear vision for the future, and − with our Alliance partner, Renault − we are working with passion to achieve it. Our mission is to enrich people’s lives, building trust with our employees, customers, dealers, partners, shareholders and the world at large. MISSION Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders* in alliance with Renault. * Our stakeholders include customers, shareholders, employees, dealers and suppliers, as well as the communities where we work and operate. NISSAN MOTOR CORPORATION ANNUAL REPORT 2015CORPORATE FACE TIME03 FINANCIAL HIGHLIGHTS Net sales*1 Ordinary income Net income Comprehensive income Net assets Total assets Net assets per share Basic net income per share Diluted net income per share*3 Net assets as a percentage of total assets Return on equity Price earnings ratio Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of fiscal year Employees*4 ( ) represents the average number of part-time employees not included in the above numbers For the years ended Mar. 31, 2015 Mar. 31, 2014 Mar. 31, 2013 Mar. 31, 2012 Mar. 31, 2011 2014 2013 2012*2 2011 2010 Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Yen Yen Yen % % Times Millions of yen Millions of yen Millions of yen Millions of yen Number 11,375,207 10,482,520 8,737,320 9,409,026 8,773,093 694,232 457,574 719,903 527,189 389,034 796,533 504,421 341,117 721,860 535,090 341,433 290,600 537,814 319,221 189,198 5,247,262 4,671,528 4,036,030 3,449,997 3,273,783 17,045,659 14,703,403 12,442,337 11,072,053 10,736,693 1,152.83 1,035.06 109.15 109.14 28.4 10.0 11.21 92.82 92.82 29.5 9.6 9.91 692,747 728,123 890.38 81.39 - 30.0 9.9 11.08 412,257 (1,022,025) (1,080,416) (838,047) 245,896 802,612 149,388 (20,381) 151,710 (20,748) 396,925 832,716 142,925 (21,750) 147,939 (22,642) 433,817 711,901 130,274 (22,442) 136,625 (23,307) 750.77 81.67 - 28.4 11.2 10.79 696,297 (685,053) (308,457) 840,871 157,365 (34,775) 161,513 (35,099) 703.16 76.44 - 27.4 11.3 9.65 667,502 (331,118) 110,575 1,153,453 155,099 (27,816) 159,398 (28,089) Notes: *1 Net sales are presented exclusive of consumption tax. *2 Effective from fiscal 2013, International Financial Reporting Standards (IFRS) 11 Joint Arrangements, which was released on May 12, 2011, and International Accounting Standards (IAS) 19 Employee Benefits, which was released on June 16, 2011, have been applied in some foreign subsidiaries and affiliates, and key financial data and trends for fiscal 2012 are adjusted. *3 Diluted net income per share for fiscal 2010, fiscal 2011 and fiscal 2012 is not presented because the Company had no securities with dilutive effects. *4 Staff numbers, which are presented as the lower numbers in the “Employees” line, include those of unconsolidated subsidiaries accounted for by the equity method as reference data. NISSAN MOTOR CORPORATION ANNUAL REPORT 2015CORPORATE FACE TIME04 Key figures for fiscal 2014 (China JV Equity Basis) Net sales climbed 892.7 billion yen for the year to reach 11,375.2 billion yen. Operating profit was 589.6 billion yen, for a profit margin of 5.2%. Under the forecast of consolidated operating results after fiscal 2013, the consolidation method for Dongfeng Motor Co.,Ltd. has been changed from proportionate consolidation to the equity method in comparison with the results until fiscal 2012 by the adoption of IFRS11. 8,773.1 9,409.0 9,629.6 12,406.3 11,434.8 11,375.2 10,482.5 Net Sales (Billions of yen) 15,000 12,000 9,000 6,000 3,000 0 Operating Profit (Billions of yen) 718.6 605.7 589.6 537.5 545.8 523.5 498.4 800 600 400 200 0 Net Income (Billions of yen) 500 400 300 200 100 0 457.6 457.6 389.0 389.0 319.2 341.4 342.4 2010 2011 2012 2013 2014 (FY) 2010 2011 2012 2013 2014 (FY) 2010 2011 2012 2013 2014 (FY) ■ Management pro forma basis* ■ China JV Equity basis ■ Management pro forma basis* ■ China JV Equity basis ■ Management pro forma basis* ■ China JV Equity basis Free Cash Flow (Auto Business) Net Cash (Auto Business) Dividend per Share (Billions of yen) (Billions of yen) 459.3 379.5 352.3 365.8 248.6 208.1 199.7 500 400 300 200 100 0 1,524.5 1,390.1 1,133.7 1,015.9 915.9 1,600 1,200 800 400 0 619.8 293.3 (Yen) 50 40 30 20 10 0 33 30 25 20 10 2010 2011 2012 2013 2014 (FY) 2010 2011 2012 2013 2014 (FY) 2010 2011 2012 2013 2014 (FY) ■ Management pro forma basis* ■ China JV Equity basis ■ Management pro forma basis* ■ China JV Equity basis * Based on continuation of proportionate consolidation of China JV NISSAN MOTOR CORPORATION ANNUAL REPORT 2015CORPORATE FACE TIMETO OUR SHAREHOLDERS Carlos Ghosn President and Chief Executive Officer In the 12 months since our last Annual Report, Nissan Motor Corporation has become a stronger, more efficient, and better-performing company. Fiscal 2014 was marked by many operational and financial improvements and by significant growth in key markets. Although conditions were challenging in several markets, a combination of encouraging demand for new products and our sustained fiscal discipline led to record automotive net cash levels. This performance also enabled Nissan to maintain its progressive dividend policy, delivering attractive returns to shareholders. Our shareholder returns and overall financial performance followed Nissan’s success in enhancing its product line-up and delivering several award-winning models, like the X-Trail, which was named “Car of the Year” in China. In this period, we also took further steps to enhance efficiency. This included reducing our per-vehicle total delivery costs. We improved monozukuri competitiveness and expanded Nissan’s global manufacturing footprint and took steps to start increasing production in 05 We are committed to achieving the goals of our mid-term business plan and keeping Nissan on a path toward long-term, sustainable growth. Japan. And we continued to lead the way into untapped markets, such as Nigeria, where Nissan became the first major auto brand to localize production. As a result, we increased global volume and set a new sales record last fiscal year. This was driven primarily by our strong performance in the United States, Mexico and Canada. In North America, we saw record sales, with double digit gains. Nissan also saw a rebound in Western Europe, where the market has strengthened following a period of volatility. This helped compensate for more difficult conditions in other regions. Our market strengths continue to be matched by product innovation and the introduction of new technologies, not least in zero emissions. We maintained our position as the auto industry’s undisputed leader for zero-emission mobility, led by the all-electric Nissan LEAF model. During the year, Nissan expanded its network of partners across and beyond the auto industry. This included expanding our strategic cooperation with Daimler and teaming up with NASA to advance our Autonomous Drive vehicle technology. And we deepened Nissan’s longest-standing and most important partnership, the Renault-Nissan Alliance. In 2014, the Alliance posted record synergies of 3.80 billion euros, up from 2.87 billion euros the previous year. Taken together, these steps have ensured that Nissan has entered fiscal 2015 with powerful momentum that we will carry forward. The full scope of our global operations will continue to be guided by our strategic, mid-term plan, “Nissan Power 88.” Clearly, we have high expectations for Nissan. To meet our goals, we will continue to execute our comprehensive, global strategy. Products and new technologies During the past fiscal year, Nissan launched 10 new models across all our brands. This product momentum has continued in fiscal 2015 with the launches of 6 all-new vehicles. Under the Nissan brand, we have the all-new Maxima and the all-new Titan pick-up truck in the US. In China, we will launch the all-new Lannia, a bold, sporty mid-size sedan for young Chinese customers. Our performance in China will be further boosted by the Venucia T70. And 2015 will be an important year for Infiniti. We will introduce two models, the Q30 and QX30 compact crossover, which will launch first in Europe and will be produced for the first time in Europe. NISSAN MOTOR CORPORATION ANNUAL REPORT 2015TOP MESSAGE06 the world. Last year, we sold 8.5 million vehicles. With a total of eight brands, the Alliance represents 10% global market share. The success of the Alliance has attracted other partners, but we know we can grow further and achieve more. To maximize Alliance synergies, last year, we converged four key functions in Purchasing, Manufacturing and Logistics, Engineering; and Human Resources. This has put us on track to over achieve our target of a minimum of 4.3 billion euros in synergies by the end of fiscal year 2016. Year ahead In fiscal 2015, we expect to outperform the industry sales pace and deliver record-high revenue and solid profitability. Globally, we anticipate that total industry sales volumes will increase 0.1% to 85.4 million units. With a number of new models launching from Nissan and Infiniti, we project our sales to rise by 4.4% to 5.55 million units. Although market conditions remain challenging in Japan, Russia and Brazil, we expect to make further progress in the US, China and Europe. We also have high expectations for Infiniti and Datsun. As a result of all these factors, the quality of our earnings will continue to improve in fiscal 2015 and that we are on the right track with our mid-term strategy. Based on our performance outlook for fiscal 2015, and our expectations for continued profitability and solid free cash flow, we project an increase in the annual dividend by 27% to 42 yen per share. Conclusion Nissan has begun this new fiscal year in a position of strength. We are committed to achieving the goals of our mid-term business plan and keeping Nissan on a path toward long-term, sustainable growth. We have the resources, the talent and the determination to meet our objectives. And we will continue to deliver for our customers and our shareholders. Thank you, once again, for your support for Nissan Motor Corporation. Nissan remains at the forefront of zero-emission technologies, producing and selling vehicles that contribute to a cleaner environment. The Nissan LEAF, the world’s most popular all-electric vehicle, will pass the milestone of 200,000 unit sales in fiscal 2015. Our zero-emission product portfolio has been augmented by the launch of the e-NV200 light commercial vehicle and the Venucia e30 in China. Nissan has been one of the foremost advocates for the development of recharging networks. There are now more than 14,000 electric vehicle (EV) chargers, not including home-chargers, in Japan. During fiscal 2015, the number of chargers in Japan will increase even further, and we will continue to develop our battery and vehicle technologies even further. We believe that, in the near future, Nissan can provide EV drivers with even greater “peace of mind” range, by offering comparative mobility to today’s conventional vehicles. Our research is aimed at delivering exceptional range, well beyond anything on the road today. Nissan is exploring new materials and chemistry solutions in order to make thinner, lighter weight and less costly batteries. We foresee the day when you leave your home with a full charge, and are able to go about your day with no concerns then return home with ample charge. The current fiscal year will also see further progress in the deployment of Autonomous Drive systems – another pillar of our technology strategy. It reinforces our commitment to leading the way toward a “zero-fatality, zero-emission” future. Our goal is for Nissan to be ready to deliver Autonomous Drive vehicles by 2020. Until then, we will introduce components of this technology on a regular basis. Starting this year in Japan, we will apply our emergency-brake technology as a standard feature on our highest volume models. This will be followed in 2016 by the introduction of traffic jam technology, which will enable cars to drive autonomously and safely on congested highways. In 2018, we will introduce multiple-lane controls technology, which allows cars to autonomously negotiate hazards and change lanes on highways. And by the end of the decade, we will introduce intersection-autonomy, enabling vehicles to negotiate city cross-roads without driver intervention. This will empower customers to drive with greater confidence, ease and safety. Increased visibility of products and brands Delivering innovative, exciting products and technologies will continue to be the core of Nissan’s business. To realize the full benefit of these activities, we also need to make sure that potential customers are familiar with our brands and aware of our vehicles and technologies. That is why we are backing up our monozukuri activities with bold, targeted kotozukuri activities. One particular area of strength is our sports partnerships, such as with the Yokohama F-Marinos, City Football Group, UEFA Champions League and Infiniti Red Bull Racing, which have resulted in the improvement of Nissan’s overall opinion scores and increased awareness of the Infiniti brand. Renault – Nissan Alliance Another area of continued strength is our focus on Alliance-driven synergies. Since the Renault-Nissan Alliance was established almost 16 years ago, it has become the fourth-largest automotive group in Carlos GhosnPresident and Chief Executive OfficerNissan Motor Co., Ltd.NISSAN MOTOR CORPORATION ANNUAL REPORT 2015TOP MESSAGEMESSAGE FROM THE CFO 07 We will enhance enterprise value, maintain a strong balance sheet and provide shareholders an attractive dividend. Joseph G. Peter Chief Financial Officer Nissan Motor Corporation has reinforced its position as a leading global automotive company, delivering solid business and financial results in fiscal 2014. Despite challenging conditions in some regions, Nissan’s global unit sales in fiscal 2014 reached 5.32 million units, an all-time record. In terms of our financial performance (based on the equity method of accounting for our China Joint Venture), consolidated net revenues increased by 892.7 billion yen to 11.4 trillion yen. Operating profit rose by 18.3% to 589.6 billion yen and net income grew by 17.6% to 457.6 billion yen. Automotive free cash flow was a positive 365.8 billion yen and we continued to strengthen the balance sheet ending the period with net cash of 1.4 trillion yen for our automotive business. Our strong results reflect market growth in the US, Mexico, the UK, Russia and other parts of Europe, where award-winning vehicles such as X-TRAIL and Qashqai continued to generate demand. Orders for these and other new products compensated for difficult conditions in some other parts of the world. The results also reflect our continued focus on cost efficiency, which contributed 112.7 billion yen in year-over-year operating profit improvement, mainly through our purchasing material cost- reduction efforts. On a management pro-forma basis – reflecting the proportional consolidation accounting method of our joint venture in China, and which is consistent with the methodology used in developing the Nissan Power 88 Mid-term Plan objectives – net revenues increased by 8.5% to 12.4 trillion yen. Pro- forma operating profit rose by 18.6% to 718.6 billion yen. On this measure, we ended the fiscal period with net cash from our automotive operations of 1.5 trillion yen. The positive results in fiscal 2014 provide a solid base as we follow the path toward our Power 88 goals. Looking toward fiscal 2015, we anticipate total industry volumes will increase slightly to 85.44 million units. Of that total, we project that Nissan’s global retail volumes will rise by 4.4% to 5.55 million units, driven by anticipated strong demand for our new products and continued execution of our Power 88 mid-term plan strategies and related initiatives. Given this volume outlook, we expect net revenues to grow by 6.4% to 12.10 trillion yen for the 12 months ending March 31, 2016, calculated under the equity accounting method for our joint venture in China. Operating profit are targeted to reach 675 billion yen, representing a margin of 5.6%. Net income is expected to reach 485 billion yen, an annual increase of 6%. NISSAN MOTOR CORPORATION ANNUAL REPORT 2015TOP MESSAGE08 On the “management pro-forma” basis (reflecting proportional consolidation of our China Joint Venture), we anticipate net revenues will increase by 7% to 13.27 trillion yen. Operating profit is forecast to grow by 16.2% to 835 billion yen, resulting in an operating profit margin of 6.3%. Net income is predicted to grow 6% to 485 billion yen. As we’ve stated previously, our dividend policy for the remainder of the mid-term plan period targets a minimum pay-out ratio of 30% of net income. This reflects our recognition – shared by asset managers – that Nissan should continue to deliver an attractive return to shareholders. In conclusion, our mid-term business plan is designed to significantly enhance shareholder value Our financial priorities remain focused on ensuring sustainable profitable growth, generating positive automotive free cash flow and maintaining a strong balance sheet with sufficient levels of liquidity. through business growth that drives higher revenue, profits and strong sustained free cash flow generation. We will enhance enterprise value, maintain a strong balance sheet and provide shareholders an attractive dividend. We will also continue to invest with discipline. In recent years, Nissan has invested in capacity in Success in meeting our Power 88 goals should allow Nissan to continue to enhance returns to shareholders, realized through increased dividends and an improved market valuation. key markets for the mid- to long-term. We have expanded our manufacturing capacity, and we now are poised to take advantage of the investments made during the first half of our mid-term plan. Overall, this means that Nissan can look ahead with confidence and remains on the right path towards the goals of our Power 88 mid-term plan. This mid-term plan will see Nissan maintain its product offensive, following on from new models launched in the last fiscal year. We also anticipate further progress in the luxury segment through Infiniti and in emerging markets with our entry-level Datsun brand. These efforts coincide with continued targeted investments in new technologies, particularly autonomous drive systems, and our continued deployment of the world’s best-selling zero-emission electric vehicles. Progress in these areas will complement continued contributions from our Alliance strategy, which is forecast to deliver increased synergies and global scale as we cooperate more closely in converged functions. Reflecting confidence in our mid-term plan and based on our healthy financial position and outlook for fiscal year 2015, including continued solidly positive free cash flow generation, we announced in May this year our intention to increase the dividend by 27% to 42 yen per share for fiscal 2015. Joseph G. PeterChief Financial OfficerNISSAN MOTOR CORPORATION ANNUAL REPORT 2015TOP MESSAGETHE MID-TERM PLAN “NISSAN POWER 88” 09 SIX STRATEGIES UNDER NISSAN POWER 88 1 2 3 Strengthening brand power Enhancing sales power Enhancing quality 4 5 6 Zero-emission leadership Business expansion Cost leadership Nissan is operating its business based on the mid-term plan, Nissan Power 88, for the fiscal years 2011 to 2016. “Power” derives its significance from the strengths and efforts we will apply to our brands and sales. Our commitment is to renew our focus on the overall customer experience, elevating Nissan’s brand power and ensuring quality excellence for every person who buys a Nissan car. “88” denotes the measurable rewards from achieving our plan. We aim to achieve a global market share of 8% from 5.8% in 2010 and to increase our corporate operating profit to a sustainable 8%* from 6.1% in 2010. Nissan is implementing six strategies under Nissan Power 88. Together with a stronger brand, investments in products, technologies and global capacity, we aim to achieve Nissan Power 88 and grow further. * Management pro forma basis based on continuation of proportionate consolidation of China JV NISSAN MOTOR CORPORATION ANNUAL REPORT 2015NISSAN POWER 8810 PERFORMANCE Nissan’s “Double Zero” Target & ZERO FATALITY ZERO EMISSION As the industry leader in zero-emission mobility, Nissan is committed to the penetration of electric vehicles (EVs) in the market. It is also striving to achieve virtually zero fatalities and serious injuries in accidents involving its vehicles. Zero Emissions The Nissan LEAF is the best-selling EV in the world. This year the company is targeting cumulative global sales of more than 200,000 vehicles. Nissan has also extended its zero-emission technology to the e-NV200 light commercial vehicle and the Venucia e30 in China. Zero Fatalities Autonomous Drive technologies will provide a platform for Nissan to pursue its ultimate vision of achieving virtually zero fatalities. In 2016, Nissan will introduce an automated system intended to allow the car to drive autonomously in heavy, stop-and-go traffic. By 2018, we will introduce new technologies that enable cars to autonomously negotiate hazards and change lanes. By 2020, the company aims to be ready to introduce automated technology allowing vehicles to navigate without driver intervention in a variety of situations, including complex city driving. Meanwhile, Nissan’s Safety Shield technologies are fundamental to autonomous driving. Starting this year in Japan, Nissan will apply Emergency Braking technology as a standard feature on highest volume models.. NISSAN MOTOR CORPORATION ANNUAL REPORT 201511 FISCAL 2014 SALES PERFORMANCE AND FISCAL 2015 SALES OUTLOOK Global demand in fiscal 2014 reached 85.36 million vehicles, up 2.7% from fiscal 2013. Nissan’s global sales volume climbed 2.5% to 5.318 million vehicles and global market share was 6.2%, equal to fiscal 2013. For fiscal 2015, Nissan expects to grow faster than the industry as a whole. We anticipate that total industry volumes will increase by 0.1% to 85.44 million units. Our global retail volumes are expected to rise by 4.4% to 5.55 million units. This would equate to a global market share of 6.5%, an increase of 0.3 percentage points compared to 2014. Global Retail Sales Performance / Market Share and Global Sales Outlook (Units: thousands) （ ％） Sales Performance and Sales Outlook by Regions (FY) (Forecast) (Units: thousands) FY2014 FY2015 (Forecast) Other Markets +5.7% Europe +4.6% North America +5.0% (U.S.+6.4%) China +6.4% Japan –3.7% 3,0001,0002,0004,0006,0005,00006.02.04.08.012.010.0020052006200720082009201020112012201320143,5695.6%3,4835.4%3,7705.4%3,4115.5%3,5155.5%4,5185.8%4,8456.4%4,9146.2%5,1885,31820155,5506.2%6.2%6.5%6,0005,0004,0003,0002,0001,00005,3185,550+4.4%　8897551,829 (1,400)1,2226239407901,920 (1,490)1,300600NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCESALES VOLUME AND SALES OUTLOOK BY REGIONS Japan Total Sales Volume: 623 thousand units China Total Sales Volume: 1,222 thousand units United States Total Sales Volume: 1,400 thousand units Europe Total Sales Volume: 755 thousand units Other Markets Total Sales Volume: 889 thousand units NP300 Navara 12 Dayz/Dayz Roox Sylphy Altima Qashqai Datsun GO+ Panca Sales in Japan Sales in China Sales in United States Sales in Europe (Including Russia) Sales in Other Markets (Units: thousands) (Units: thousands) (Units: thousands) 1,500 1,000 500 600 655 646 719 623 605 –3.7% 1,247 1,216 1,222 1,023 1,080 1,500 1,000 500 1,300 +6.4% 1,500 1,138 1,079 966 1,000 500 1,490 +6.4% 1,400 1,285 1,500 1,000 500 (Units: thousands) 676 660 676 607 790 +4.6% 755 1,000 825 709 500 960 879 889 940 +5.7% (Units: thousands) 1,500 0 2010 2011 2012 2013 2014 2015 (FY) 0 2010 2011 2012 2013 2014 2015 (FY) 0 2010 2011 2012 2013 2014 2015 (FY) 0 2010 2011 2012 2013 2014 2015 (FY) (Forecast) (Forecast) (Forecast) (Forecast) 0 2010 2011 2012 2013 2014 2015 (FY) (Forecast) Sales for Top Three Models (Units: thousands) Sales for Top Three Models (Units: thousands) Sales for Top Three Models (Units: thousands) Sales for Top Three Models (Units: thousands) Dayz/Dayz Roox 167.5 Sylphy Series 300.1 Altima 333.2 Qashqai Note Serena 101.3 67.1 X-Trail Teana 114.5 109.3 Rogue Sentra 213.2 193.5 Juke Micra Sales by Region (Units: thousands) Asia and Oceania Latin America Middle East 246.0 119.3 66.9 363 184 237 NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCE FISCAL 2014 FINANCIAL REVIEW AND FISCAL 2015 OUTLOOK Fiscal 2014 Financial Performance (China JV Equity Basis) Impact on Operating Profit (Billions of yen) 13 Net sales For fiscal 2014, consolidated net sales increased 8.5%, to 11.38 trillion yen. Net Sales (Billions of yen) 15,000 10,482.5 12,406.3 11,434.8 10,000 8,773.1 9,409.0 9,629.6 13,270.0 11,375.2 12,100.0 498.4 +112.7 +68.6 +32.4 –43.8 –39.5 –0.1 –20.1 –19.0 589.6 5,000 0 2010 2011 2012 2013 2014 (Forecast) 2015 (FY) ■ Management pro forma basis* ■ China JV equity basis Operating profit Consolidated operating profit totaled 589.6 billion yen, an increase of 18.3% from the previous year. In comparison to the previous year’s consolidated operating profit, the variance was due to the following factors: FY13 O.P. FOREX Cost items* Volume/mix Marketing & selling exp. US re-marketing R&D exp. MFG exp. Other items FY14 O.P. * Including purch. cost reduction, raw material and product enrichment. Net income Net non-operating income amounted to 104.6 billion yen for the current fiscal year, increasing by 75.8 billion yen due to a 79.3 billion yen foreign exchange gain and 27.7 billion yen increase in equity in earnings of affiliates. Net special loss was 6.8 billion yen, a decrease of 9.0 billion yen. This was primarily attributable to a 16.1 billion yen impairment loss of fixed benefits. Income taxes paid for the current fiscal year increased by 82.2 billion yen from the previous fiscal year to 197.3 billion yen. Consolidated net income increased by 68.6 billion yen from 389.0 billion yen for the previous l The 68.6 billion yen positive impact from foreign exchange rates came mainly from the correction of the yen fiscal year to 457.6 billion yen for the current fiscal year. against the U.S. dollar. l Cost items resulted in net savings of 112.7 billion yen, as purchasing material cost-reduction efforts were only partially offset by cost increases due to product enrichment and raw materials. l Volume and mix resulted in a net positive impact of 32.4 billion yen. l The increase in marketing and selling expenses resulted in a 43.8 billion yen negative impact. l U.S. re-marketing performance decreased by 39.5 billion yen. l R&D expenses increased by 0.1 billion yen. l Manufacturing expenses rose by 20.1 billion yen. l Other items had a negative impact of 19.0 billion yen. Operating Profit (Billions of yen) 800 600 400 200 0 835.0 718.6 675.0 537.5 545.8 523.5 605.7 589.6 498.4 2010 2011 2012 2013 2014 (Forecast) 2015 (FY) ■ Management pro forma basis* ■ China JV equity basis Net Income (Billions of yen) 600 450 300 150 0 457.6 485.0 389.0 319.2 341.4 342.4 2010 2011 2012 2013 2014 (Forecast) 2015 (FY) ■ Management pro forma basis* ■ China JV equity basis * Based on continuation of proportionate consolidation of China JV NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCE14 Financial Position (China JV Equity Basis) Balance sheet Total assets increased by 15.9% to 17,045.7 billion yen compared to March 31, 2014. Long-term credit rating Nissan’s long-term credit rating with Rating & Investment Information, Inc. (R&I) is A+ with a stable outlook. The Standard & Poor’s (S&P) long-term credit rating for Nissan is A– with a stable outlook. Nissan’s credit rating with Moody’s is A3 with a stable outlook. Current assets increased by 19.8% to 10,317.3 billion yen compared to March 31, 2014. This was mainly attributable to an increase in sales finance receivables by 1,279.3 billion yen. Corporate Ratings Fixed assets increased by 10.4% to 6,728.3 billion yen compared to March 31, 2014. This was mainly attributable to an increase in machinery, equipment and vehicles, net by 462.9 billion yen and an increase in investment securities by 58.4 billion yen. Current liabilities increased by 23.7% to 6,417.5 billion yen compared to March 31, 2014. This was mainly due to increases in the current portion of long-term borrowings by 466.2 billion yen and short-term borrowings by 316.0 billion yen. Long-term liabilities increased by 11.1% to 5,380.9 billion yen compared to March 31, 2014. This was mainly due to increases in bonds by 176.7 billion yen and net retirement benefit obligation by 119.7 billion yen. Net assets increased by 12.3% to 5,247.3 billion yen compared to 4,671.5 billion yen as of March 31, 2014. This was mainly due to net income of 457.6 billion yen and a decrease in translation adjustments by 222.4 billion yen. Free cash flow and net cash (auto business) For fiscal 2014, Nissan achieved a positive free cash flow of 365.8 billion yen. At the end of fiscal 2014, our net automotive cash improved from the previous fiscal year to 1,390.1 billion yen. We continue to maintain a close focus on our inventory of new vehicles. Inventory stood at 810,000 units at the end of fiscal 2014. The company continues to manage inventory carefully in order to limit its impact on free cash flow. Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 R&I S&P Moody’s AA– A+ A A– BBB+ BBB BBB– BB+ 10/03 4/04 10/04 4/05 10/05 4/06 10/06 4/07 10/07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 7/11 7/12 1/13 9/14 NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCE15 Dividend Nissan’s strategic actions reflect not only its long-term vision as a global company to create sustainable value but also the company’s commitment to maximizing total shareholder returns. We paid year-end cash dividends of 16.5 yen per share for fiscal 2014. As a result, the total dividend payment for fiscal 2014, combined with the 16.5 yen dividend for the interim period, was 33 yen per share. The dividend payment plan for fiscal 2015 is to be 42 yen per share, considering the business condition, risks and opportunities for the year. Dividend (Dividend per share, in yen) 42 40 30 20 10 0 33 30 25 20 10 2010 2011 2012 2013 2014 (Outlook) 2015 (FY) Sales finance Due to the increase in retail sales, total financial assets of the sales finance segment increased by 20.8% to 9,281.3 billion yen from 7,682.1 billion yen in fiscal 2013. The sales finance segment generated 195.5 billion yen in operating profits in fiscal 2014 from 164.7 billion yen in fiscal 2013. Investment policy Capital expenditures totaled 463.1 billion yen, which was 4.1% of net sales. The company used capital expenditures in order to ensure Nissan’s future competitiveness. R&D expenditures totaled 506.1 billion yen. These funds were used to develop new technologies and products. One of the company’s strengths is its extensive collaboration and development structure with Renault’s R&D team, resulting from the Alliance. R&D Expenditures (Billions of yen) 399.3 428.0 4.6% 4.5% 457.8 5.2% 500.6 506.1 530.0 4.8% 4.4% 4.4% 600 450 300 150 0 2010 2011 2012 2013 2014 (Forecast) 2015 (FY) Fiscal 2015 Outlook (China JV Equity Basis) Capital Expenditures (Billions of yen) 600 450 300 150 0 536.3 5.1% 468.7 5.4% 463.1 4.1% 550.0 4.5% 406.4 4.3% 312.0 3.6% 2010 2011 2012 2013 2014 (Forecast) 2015 (FY) ■ Management pro forma basis* ■ China JV equity basis ● % of net sales (Management pro forma basis*) ● % of net sales (China JV equity basis) * Based on continuation of proportionate consolidation of China JV In our outlook for fiscal 2015, we expect our global sales to reach 5.55 million units, an increase of 4.4% compared to fiscal 2014. With a total industry volume assumption of 85.44 million units, a 0.1 % increase year on year, our global market share is expected to grow from 6.2% to 6.5%. In consequence of our plan, the financial forecast is as follows. We have used a foreign exchange rate assumption of 115 yen to the dollar and 130 yen to the euro: Nissan’s Fiscal 2015 Outlook n Net sales n Operating profit n Net income 12.10 trillion yen 675.0 billion yen 485.0 billion yen NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCE16 FINANCIAL STATEMENTS Consolidated balance sheets (China JV Equity basis) Assets Current assets Cash on hand and in banks Trade notes and accounts receivable Sales finance receivables Securities Merchandise and finished goods Work in process Raw materials and supplies Deferred tax assets Other Allowance for doubtful accounts Total current assets Fixed assets Property, plant and equipment Buildings and structures, net Machinery, equipment and vehicles, net Land Construction in progress Other, net Total property, plant and equipment Intangible fixed assets Investments and other assets Investment securities Long-term loans receivable Net defined benefit assets Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total fixed assets Total assets FY2013 As of March 31, 2014 FY2014 As of March 31, 2015 (Millions of yen) FY2013 As of March 31, 2014 FY2014 As of March 31, 2015 (Millions of yen) 822,863 785,954 5,033,558 13,470 769,676 94,386 287,789 210,395 650,143 (58,956) 8,609,278 615,127 2,658,776 642,932 337,635 503,568 4,758,038 92,334 930,293 13,529 7,262 117,437 177,785 (2,553) 1,243,753 6,094,125 14,703,403 761,074 888,814 6,312,874 41,651 853,962 90,811 365,224 226,891 851,168 (75,124) 10,317,345 661,979 3,121,627 643,940 265,119 573,574 5,266,239 114,456 988,733 14,569 10,078 140,669 195,927 (2,357) 1,347,619 6,728,314 17,045,659 Liabilities Current liabilities Trade notes and accounts payable Short-term borrowings Current portion of long-term borrowings Commercial papers Current portion of bonds Lease obligations Accrued expenses Deferred tax liabilities Accrued warranty costs Other Total current liabilities Long-term liabilities Bonds Long-term borrowings Lease obligations Deferred tax liabilities Accrued warranty costs Net defined benefit liability Other Total long-term liabilities Total liabilities Net assets Shareholders’ equity Common stock Capital surplus Retained earnings Treasury stock Total shareholdersʼ equity Accumulated other comprehensive income Unrealized holding gain and loss on securities Unrealized gain and loss from hedging instruments Adjustment for revaluation of the accounts of the consolidated subsidiaries based on general price level accounting Translation adjustments Remeasurements of defined benefit plans Total accumulated other comprehensive income Share subscription rights Minority interests Total net assets Total liabilities and net assets 1,511,910 706,576 910,546 151,175 226,590 32,838 693,438 316 93,151 860,709 5,187,249 918,783 2,682,381 23,580 605,140 105,884 216,583 292,275 4,844,626 10,031,875 605,814 804,485 3,526,646 (149,315) 4,787,630 81,630 (7,015) (13,945) (469,202) (40,444) (448,976) 2,401 330,473 4,671,528 14,703,403 1,554,399 1,022,613 1,376,780 200,692 216,942 23,043 908,909 64 112,989 1,001,064 6,417,495 1,095,518 2,717,478 18,167 673,521 129,365 336,261 410,592 5,380,902 11,798,397 605,814 804,567 3,811,848 (148,239) 5,073,990 95,600 7,185 (13,945) (246,776) (81,638) (239,574) 2,294 410,552 5,247,262 17,045,659 NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCE17 FY2013 (From April 1, 2013 to March 31, 2014) (Millions of yen) FY2014 (From April 1, 2014 to March 31, 2015) 9,168 12,175 5,785 27,128 1,694 11,456 2,130 9,659 24,939 529,378 131,990 (16,939) 115,051 414,327 25,293 389,034 20,008 17,725 6,169 43,902 3,299 17,069 16,103 14,242 50,713 687,421 224,010 (26,686) 197,324 490,097 32,523 457,574 Special gains Gain on sales of fixed assets Gain on contribution of securities to retirement benefit trust Other Total special gains Special losses Loss on sales of fixed assets Loss on disposal of fixed assets Impairment loss Other Total special losses Income before income taxes and minority interests Income taxes-current Income taxes-deferred Total income taxes Income before minority interests Income attributable to minority interests Net income Consolidated statement of income (China JV Equity basis) Net sales Cost of sales Gross profit Selling, general and administrative expenses Advertising expenses Service costs Provision for warranty costs Other selling expenses Salaries and wages Retirement benefit expenses Supplies Depreciation and amortization Provision for doubtful accounts Amortization of goodwill Other Total selling, general and administrative expenses Operating income Non-operating income Interest income Dividends income Equity in earnings of affiliates Exchange gain Miscellaneous income Total non-operating income Non-operating expenses Interest expense Derivative loss Exchange loss Amortization of net retirement benefit obligation at transition Miscellaneous expenses Total non-operating expenses Ordinary income FY2013 (From April 1, 2013 to March 31, 2014) 10,482,520 (Millions of yen) FY2014 (From April 1, 2014 to March 31, 2015) 11,375,207 8,636,063 1,846,457 289,098 100,255 107,480 204,953 354,908 25,174 3,637 43,515 31,869 1,814 185,389 1,348,092 498,365 17,064 6,013 78,815 ― 9,254 111,146 28,677 18,166 13,063 9,075 13,341 82,322 527,189 9,241,341 2,133,866 336,792 93,606 133,567 255,044 392,969 17,511 4,222 44,826 52,079 1,837 211,852 1,544,305 589,561 25,323 6,425 106,513 66,185 17,813 222,259 29,167 58,379 ― 9,098 20,944 117,588 694,232 NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCE18 Consolidated statement of cash flows (China JV Equity basis) Cash flows from operating activities Cash flows from investing activities FY2013 (From April 1, 2013 to March 31, 2014) (Millions of yen) FY2014 (From April 1, 2014 to March 31, 2015) FY2013 (From April 1, 2013 to March 31, 2014) (Millions of yen) FY2014 (From April 1, 2014 to March 31, 2015) Income before income taxes and minority interests Depreciation and amortization (for fixed assets excluding leased vehicles) Depreciation and amortization (for long term prepaid expenses) Depreciation and amortization (for leased vehicles) Impairment loss Gain on contribution of securities to retirement benefit trust Increase (decrease) in allowance for doubtful receivables Loss (gain) for residual value risk of leased vehicles Interest and dividend income Interest expense Equity in losses (earnings) of affiliates Loss (gain) on sales of fixed assets Loss on disposal of fixed assets Decrease (increase) in trade notes and accounts receivable Decrease (increase) in sales finance receivables Decrease (increase) in inventories Increase (decrease) in trade notes and accounts payable Amortization of net retirement benefit obligation at transition Retirement benefit expenses Payments relared to net defined benefit assets and liability Other Subtotal Interest and dividends received Proceeds from dividends income from affiliates accounted for by equity method Interest paid Income taxes paid Net cash provided by operating activities 529,378 364,926 24,086 288,276 2,130 (12,175) 12,160 11,633 (23,077) 101,451 (78,815) (7,474) 11,456 (173,228) (587,060) (38,057) 334,367 9,075 37,701 (36,658) 34,749 804,844 20,654 98,907 (99,861) (96,421) 728,123 687,421 398,982 28,003 355,292 16,103 (17,725) 13,471 41,911 (31,748) 112,823 (106,513) (16,709) 17,069 (64,118) (707,321) (82,435) 125,840 9,098 26,789 (25,815) 53,350 833,768 25,793 145,780 (114,659) (197,899) 692,747 Net decrease (increase) in short-term investments Purchase of fixed assets Proceeds from sales of fixed assets Purchase of leased vehicles Proceeds from sales of leased vehicles Payments of long-term loans receivable Collection of long-term loans receivable Purchase of investment securities Proceeds from sales of investment securities Proceeds from (payments for) sales of subsidiaries' shares resulting in changes in the scope of consolidation Proceeds from (payments for) purchase of subsidiaries' shares resulting in changes in the scope of consolidation Net decrease (increase) in restricted cash Other Net cash used in investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Proceeds from issuance of bonds Repayments of long-term borrowings Redemption of bonds Proceeds from minority shareholders Purchase of treasury stock Proceeds from sales of treasury stock Repayments of lease obligations Cash dividends paid Cash dividends paid to minority shareholders Net cash provided by financing activities Effects of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Increase due to inclusion in consolidation Cash and cash equivalents at end of the period (3,360) (551,808) 79,578 (1,004,141) 465,501 (1,292) 254 (37,617) 2,223 (1,321) 972 (8,628) (20,777) (1,080,416) (19,920) 1,373,644 444,666 (1,058,838) (181,628) 9,599 (11) 127 (44,312) (115,265) (11,137) 396,925 74,850 119,482 711,901 1,333 832,716 3,405 (513,268) 88,318 (1,070,654) 537,721 (534) 310 (25,591) 6,104 (156) ― (36,258) (11,422) (1,022,025) 445,170 981,970 325,513 (1,094,942) (238,124) 6,242 (61) 618 (34,047) (132,054) (14,389) 245,896 50,660 (32,722) 832,716 2,618 802,612 NISSAN MOTOR CORPORATION ANNUAL REPORT 2015PERFORMANCE EXECUTIVES DIRECTORS OF THE BOARD AND AUDITORS CORPORATE OFFICERS Representative Directors Directors Auditors Carlos Ghosn President and Chairman Hiroto Saikawa Greg Kelly Hideyuki Sakamoto Toshiyuki Shiga Hidetoshi Imazu Fumiaki Matsumoto Jean-Baptiste-Duzan Toshiyuki Nakamura Kimiyasu Nakamura Bernard Rey Motoo Nagai Shigetoshi Andoh (As of June 23, 2015) EXECUTIVE COMMITTEE MEMBERS エグゼクティブ・コミッティ・メンバー Carlos Ghosn Hiroto Saikawa Joseph G. Peter Trevor Mann Philippe Klein Takao Katagiri Jose Munoz Kimiyasu Nakamura Chief Executive Officer Chairman of Board President Representative Director Carlos Ghosn* Chief Competitive Officer Vice Chairman Hiroto Saikawa* Chief Financial Officer Joseph G. Peter* Finance Control IR M&A Support Global Sales Finance Business Unit Administration for Affiliated Companies, Marine Administration Office Global IS/IT Chief Performance Officer Trevor Mann* Responsible for 6 management committees Global Aftersales Global Datsun Business Unit Chief Planning Officer Philippe Klein* Global Product Planning Global Program Management Global Market Intelligence Global Marketing Vehicle Information Technology Global Sales Executive Vice President Takao Katagiri* Region: Japan, Asia, Oceania Japan Marketing & Sales Executive Vice President Jose Munoz* Region : North America Executive Vice President Kimiyasu Nakamura* TCSX (Total Customer Satisfaction Function) Executive Vice President Hideyuki Sakamoto* Product Engineering Executive Vice President Fumiaki Matsumoto* Manufacturing & SCM Operations Executive Vice President Daniele Schillaci* Global Marketing & Sales Executive Vice President Tsuyoshi Yamaguchi Alliance Technology Development Executive Vice President Yasuhiro Yamauchi Alliance Purchasing Hideyuki Sakamoto Fumiaki Matsumoto Daniele Schillaci * Executive Committee Members 19 Senior Vice Presidents Shiro Nakamura Hitoshi Kawaguchi Takao Asami Jun Seki Corporate Vice Presidents Celso Guiotoko Joji Tagawa Atsushi Hirose Shunichi Toyomasu Jose Luis Valls Vincent Cobee Takashi Hata Paul Willcox Roland Krueger Arun Bajaj Asako Hoshino Rakesh Kochhar Hari Nada Yusuke Takahashi Hiroshi Karube Toru Hasegawa Keno Kato Noboru Tateishi Roel De Vries Tony Laydon Christian Mardrus Kunio Nakaguro Mitsuro Antoku Naoya Fujimoto Toshihiro Hirai Hiroshi Nagaoka Akihiro Otomo Atul Pasricha Nobuya Uranishi Philippe Guerin-Boutaud Allan Rushforth Kent O'Hara Fellow Haruyoshi Kumura Vice Chairman Toshiyuki Shiga (As of August 1, 2015) NISSAN MOTOR CORPORATION ANNUAL REPORT 2015CORPORATE GOVERNANCECORPORATE GOVERNANCE & INTERNAL CONTROL Details of this section are reported on the Company’s website, “Blue Citizenship: Nissan’s CSR.” Please see the Sustainability Report and the Current State of Nissan’s Risk Management. CORPORATE GOVERNANCE SYSTEM Nissan believes that enhancing its corporate governance is one of its most important business issues. Ensuring clear management responsibility is a key way to achieve this. Nissan announces clear management targets and policies to all its stakeholders and discloses its performance promptly with a high degree of transparency. Information regarding the following is provided in the Company’s Sustainability Report. l Corporate Governance System in Detail l Internal Control Systems l Independent Internal Audits 20 COMPLIANCE In promoting corporate social responsibility (CSR), it is essential that each employee practices compliance with high ethical standards. In order to raise compliance awareness throughout the company, Nissan has established specialized departments and appointed officers to promote compliance policy in each region where it operates. Information regarding the following is provided in the Company’s Sustainability Report. l Employees and Compliance l Security-Related Export Controls l Promoting Thorough Compliance l Nissan’s Stance Against Discrimination and Harassment l Internal Reporting System for Corporate Soundness RISK MANAGEMENT Nissan defines risks as anything that might prevent it from achieving its business goals. By detecting risks as early as possible, examining them, planning the necessary measures to address them and implementing those measures, the company works to minimize the materialization of risks as well as the impact they cause. Information regarding the following is provided in the Company’s Sustainability Report. l Principles for and Approach to Corporate Risk Management l Protecting Personal Data and Reinforcing Information Security Information regarding the following is provided in the Current State of Nissan’s Risk Management l Risks Related to Financial Market l Risks Related to Business Strategies and Maintenance of Competitiveness l Business Continuity website Please see the 2015 Sustainability Report, p. 99, for more information on Corporate Governance & Internal Control. website Please see the Current State of Nissan’s Risk Management for more information on risk management. NISSAN MOTOR CORPORATION ANNUAL REPORT 2015CORPORATE GOVERNANCE

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