Nissan 2006 Annual Report Download - page 33

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Nissan Annual Report 2005 31
Share performance in fiscal 2005
Nissan’s share price began at ¥1,099 at the end of
fiscal 2004 and ended fiscal 2005 at ¥1,398,
generating a positive return of 27.2 percent. With the
dividend of ¥29, total return to shareholder (TRS) was
a positive return of 29.8 percent. On a market-
adjusted basis, however, our performance was
negative. Since our product cycle was at a low point,
our profit growth has declined. As a result, we assume
that has made investors less confident about our
future. While it is true that our financial result was not
strong enough, there are many activities going
forward which are not reflected in our current result.
In this report, corporate officers explain what actions
Nissan has undertaken and will undertake to ensure
better performance for the future.
Payout Policy
Nissan announced its Nissan Value-Up three-year
dividend policy, covering the period from fiscal 2005
to fiscal 2007, at the annual general meeting of
shareholders on June 23, 2004. Nissan proposes a
long-term dividend policy to give more visibility and
improve transparency into the ways in which Nissan
rewards its shareholders. Nissan believes that a
long-term dividend policy reduces uncertainty for
investors who already own or are considering
acquiring Nissan stock.
IR Activities
Under Nissan Value-Up, the IR team’s performance
will be evaluated based on the price-earnings ratio
(PER) and volatility relative to our major competitors.
PER is used to measure how successfully the IR
team can manage market expectations about Nissan
in order to maintain the Nissan share price close to
an intrinsic value. The other measure, volatility, is
used to measure the risk perceived by investors in
Nissan stock. If Nissan can successfully reduce
volatility, the minimum return required by investors
should decline. The IR team believes that a
strengthening of disclosure activities is required to
improve both measures. The team plans to disclose
not only financial results but also more forward-
looking information about Nissan fundamentals such
as technology and product. Such forward-looking
information helps investors forecast future performance
more precisely and reduces uncertainty about the
future. In addition, our top management team will
increase their availability to communicate directly
with investors. We believe that will further enhance
investor understanding of Nissan’s future strategy.
FISCAL 2005 SHARE PERFORMANCE
DESPITE NISSAN’S RECORD OPERATING RESULT IN FISCAL 2005, ITS MARKET-ADJUSTED STOCK
PERFORMANCE WAS NEGATIVE. THE ROLE OF OUR INVESTOR RELATIONS TEAM IS TO BETTER ADDRESS
THE NEEDS OF INVESTORS AND ENHANCE THEIR UNDERSTANDING OF NISSAN’S PERFORMANCE. WE ARE
COMMITTED TO ENSURING THAT INVESTORS ARE ABLE TO GAIN A MORE IN-DEPTH VIEW OF THE
COMPANY’S OPERATIONS AND PERFORMANCE INDICATORS.
150
140
130
120
110
100
90
80 Apr.
2005 2006
May June July Aug. Sept Oct. Nov Dec. Jan. Feb Mar.
TOPIX Transportation Equipment Index
Nissan
TOPIX
Fiscal 2005 Share Performance
(Index: March 31, 2005=100)
200
150
100
50
0
’02 ’03 ’04 ’05 ’06
TOPIX Transportation Equipment Index
Nissan
TOPIX
Five-Year Share Performance
(Index: March 30, 2001=100)
PERFORMANCE