Impacted by the global COVID-19 pandemic, Nissan Motor Company recorded a net loss of over 448.7 billion yen in the year 2020.
As revealed in a detailed financial report made public on Tuesday, the automaker recorded a decline in sales volumes, particularly in the first quarter of 2021.
In the fiscal year 2020, consolidated net revenue declined to 7.86 trillion yen, a development that resulted in an operating loss of 150.7 billion yen.
This includes costs associated with restructuring by 61.3 billion yen as Nissan focused on operational and efficiency improvements to transform the business. Free cash flow for the automotive business was a negative 391.0 billion yen.
Nissan maintains sufficient liquidity to steer through this challenging business environment. At year-end, cash and cash equivalents for the automotive business totaled 1.9 trillion yen. Automotive net cash was 636.0 billion yen. In addition, the company continues to have access to approximately 2.2 trillion yen in unused committed credit facilities.
Nissan managed to grow sales during an unprecedentedly challenging period. In particular, sales volume in the fourth quarter grew significantly compared to the third quarter. In addition, Nissan made notable improvements in the quality of sales, optimized sales incentives, and reduced inventory while improving revenue per unit, resulting in a significant reduction in operating loss in the fourth quarter compared to the same period last year.
As a result, the company made steady progress towards achieving the goals of Nissan NEXT through the year: to rationalize, prioritize and focus on Nissan’s strengths, and build a sustainable foundation for long-term growth. Nissan delivered more than 350 billion yen in fixed cost reductions, exceeding the targeted goal; have seen good early sales of the all-new Rogue in the US and the all-new Note e-POWER in Japan, part of an attractive line-up of new products that leverages Nissan’s strengths.
However, business climate change continues to be a challenge. In addition to the COVID-19 impact, external factors including exchange rate fluctuations and semiconductor supply shortages compressed the company’s profitability.
Fourth-quarter financial highlights
The following table summarizes Nissan’s financial results for the three months ended March. 31, 2021, calculated under the equity accounting method for the group’s China joint venture.
(TSE report basis – China JV equity basis)2
| Yen in billions | FY19 4Q | FY20 4Q | Variance vs FY19 |
| Revenue | 2,371.6 | 2,545.1 | +173.5 |
| Operating profit | -94.8 | -19.0 | +75.8 |
| Net income1 | -710.5 | -81.0 | +629.5 |
Based on average foreign exchange rates of 106.1 JPY /USD and 127.8 JPY /EUR for FY20 Q4
Full-year financial results
The following table summarizes Nissan’s financial results for the 12-month period ended March 31, 2021, calculated under the equity accounting method for the group’s China joint venture.
(TSE report basis – China JV equity basis)2
| Yen in billions | FY 2019 | FY 2020 | Variance vs FY19 |
| Revenue | 9,878.9 | 7,862.6 | -2,016.3 |
| Operating profit | -40.5 | -150.7 | -110.2 |
| Operating margin % | -0.4% | -1.9% | -1.5 ppt |
| Ordinary profit | 44.0 | -221.2 | -265.2 |
| Net income1 | -671.2 | -448.7 | +222.5 |
Based on average foreign exchange rates of 106.1 JPY /USD and 123.8 JPY /EUR for FY2020
On a China joint venture proportionate basis, operating loss was 28.6 billion yen, which equates to a -0.3% operating margin, and net loss was 448.7 billion yen.
Even in the challenging business environment of the fiscal year 2020, Nissan has been consistently and steadily implementing the business transformation plan, Nissan NEXT, to recover its current performance and improve the business structure. By sustaining this momentum, Nissan will continue to introduce more attractive products and improve profitability and future corporate and brand value, thereby paving the way to achieve a 5% operating margin by the end of FY20233, a target of Nissan NEXT. At the same time, Nissan will continue its efforts to build a solid business foundation, including necessary investments for future growth, such as further promotion of electrification.
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