Nissan 2007 Annual Report Download - page 12

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Nissan Annual Report 2006-2007
10
In fiscal 2006, all the anticipated headwinds
materialized. There was almost no growth in mature
markets. And with high levels of incentive spending,
the industry had no ability to pass on higher raw-
material costs to the consumer.
The result was a tough business climate for the
auto industry at the lowest point in Nissan’s product
cycle and at a time when Nissan is investing heavily
for its future.
We knew the first half would be rough. As our
product offensive began in the second half, we
forecast a recovery in both sales and profit.
However, the full-year results were below our
expectations and our actions did not match the
challenge. So, for the first time in eight years we
have missed the performance objectives we had set
for ourselves.
Sales performance
Our fiscal 2006 global sales came to 3,483,000
units, 2.4 percent below the previous year. Around
the world, we introduced ten all-new models—all but
one in the second half—including several important
pillars of our line-up:
• An all-new version of Altima, our volume leader
in the U.S.
• The new generation of Infiniti’s volume leader,
the G35
• Livina Geniss, the first model in a new family of
global cars launched first in China
Fiscal 2006 financial performance
There is an important note on a change in
consolidation methods which is in line with auto
industry standards: As previously announced, in order
to increase transparency and consistency, we are
harmonizing calendar-year results for overseas
subsidiaries such as Europe and Mexico with fiscal-
year results for Nissan Motor Co., Ltd.
With the exception of some countries where
fiscal-period accounting is precluded by law, all
overseas subsidiaries have been harmonized to align
with the consolidated fiscal period ending in March.
So this year we will align calendar with fiscal by
including five quarters of results for subsidiaries
previously consolidated on a calendar-year basis.
• Consolidated net revenues was ¥10 trillion
468.6 billion, with the inclusion of ¥767.6 billion of
fifth-quarter results from calendar-year subsidiaries,
compared to ¥9 trillion 428.3 billion.
• Operating profit was ¥776.9 billion, with the
inclusion of ¥21.4 billion of fifth-quarter results,
compared to ¥871.8 billion in fiscal 2005.
• Operating-profit margin was 7.4 percent, with
the inclusion of fifth-quarter results, compared
to 9.2 percent in fiscal 2005.
• Ordinary profit was ¥761.1 billion, with the
inclusion of ¥18.5 billion of fifth-quarter,
compared to ¥845.9 billion in fiscal 2005.
• Net income reached ¥460.8 billion, with the
inclusion of ¥11.6 billion of fifth-quarter,
compared to ¥518.1 billion in fiscal 2005.
• We had a net cash position of ¥254.7 billion at
the close of fiscal 2006.
Nissan Value-Up commitments
Nissan Value-Up features three commitments:
• To maintain the top level of operating profit
margin among global automakers for each of
the three years of the plan
• To achieve global sales of 4.2 million units in
fiscal 2008
• To achieve a 20 percent return on invested
capital on average over the course of the plan,
excluding cash on hand
Fiscal 2006 did not boost results towards
achieving the objectives of Nissan Value-Up.
However, the commitments are still within the
potential of the company and Nissan remains
focused on delivering them completely. As such, the
company will extend the delivery period of the Nissan
Value-Up commitments by one year.
Continuing Challenges on All Fronts
FISCAL 2006 PERFORMANCE
»PERFORMANCE