Nissan 2006 Annual Report Download - page 30

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Nissan Annual Report 2005
28
1,100
1,200
1,000
900
800
FY04
OP
FY05
OP
Forex Scope
of con-
solidation
Price/
volume
mix
Sales
expenses
(incl.
incentives)
Pur-
chasing
cost
reduc-
tion Product
enrichment &
regulations
R&D
expenses
Manu-
facturing
expenses
Warranty
expenses
G&A
and
others
861.2
+117.8 +21.0 +20.4 –52.9
+160.0
Row
material
energy
cost
+100.0
–69.0
–22.6 –16.9 –37.0 –10.2
871.8
Impact on Operating Profit
(Billion Yen)
FISCAL 2005 FINANCIAL REVIEW
NISSAN ACHIEVED RECORD REVENUES, OPERATING INCOME, NET INCOME, SALES AND PRODUCTION
VOLUME IN FISCAL 2005. CONSOLIDATED NET INCOME TOTALED ¥518.1 BILLION, UP 1.1 PERCENT,
A RECORD FOR A SIXTH CONSECUTIVE YEAR. GLOBAL SALES REACHED A HISTORIC HIGH OF 3,569,000
UNITS, A 5.3 PERCENT INCREASE IN A FIERCELY COMPETITIVE MARKET.
THIS WAS THE FIRST YEAR OF NISSAN VALUE-UP, THE COMPANY’S THIRD MID-TERM BUSINESS PLAN, AND
MARKED OUR TRANSITION FROM THE REVIVAL PHASE TO THAT OF SUSTAINABLE AND PROFITABLE GROWTH.
Net Sales
Consolidated net sales came to ¥9,428.3 billion, up
9.9 percent from last year. Favorable changes in
foreign exchange rates resulted in a ¥301 billion
improvement. Changes in the scope of consolidation,
such as the inclusion of Calsonic Kansei, added
¥117.8 billion.
Operating Income
Consolidated operating profit improved by 1.2
percent from last year to a record ¥871.8 billion,
resulting in an operating profit margin of 9.2 percent.
The following factors affected operating profit:
• Foreign exchange rate fluctuations produced a
¥117.8 billion gain for the year. Of that total,
¥77.2 billion came from the appreciation of the
U.S. dollar against the yen. The appreciation of
the euro resulted in a positive impact of ¥6.3
billion. Forex activity in other currencies brought
in ¥34.3 billion, with trades involving the
Mexican peso accounting for ¥15.3 billion.
• Scope of consolidation changes, primarily from
the consolidation of Calsonic Kansei, had a
positive impact of ¥21 billion.
• Price, volume and mix had a combined positive
impact of ¥20.4 billion.
• Selling expenses increased by ¥52.9 billion,
mainly due to the higher level of incentives,
particularly in the U.S. market.
• Lower purchasing costs resulted in a
contribution of ¥160 billion. However, we had to
absorb ¥100 billion in additional costs from
increases in the price of raw materials and oil.
• Product enrichment and the cost of new
regulations had a negative impact of ¥69 billion.
• R&D expenses increased by ¥22.6 billion to
upgrade technology and develop new products.
• Manufacturing and logistics expenses went up
by ¥16.9 billion, reflecting the cost of added
capacity and product-specific investment
needed to support the seventy product
launches during the Nissan Value-Up period.
• Warranty expenses had a negative impact of
¥37 billion, a side effect of growing sales and
swift, proactive customer service actions.
• General, administrative and other expenses rose
¥10.2 billion.
PERFORMANCE