標普-我們下調(diào)日產(chǎn)汽車評級的背后是什么-2023-03-企業(yè)研究

What’sBehindOur

DowngradeOfNissanMotor

KatsuyukiNakai,

Director,CorporateRatings,Japan

HirokiShibata,

SeniorDirector&AnalyticalManager,CorporateRatings,Japan

March9,2023

Thisreportdoesnotconstitutearatingaction

RatingAction:「BBB-/Negative」→「BB+/Stable」

?DowngradedNissanMotortoBBcategoryforthefirsttimesince2002

?AssignedStableoutlookontheratingforthefirsttimesinceMay2019

?SinceJuly2020,wereflectedintoourratingtheprospectthatitsprofitabilitywillrecovertothelevelofsimilarlyratedglobalpeerswithinonetotwoyears.

?Thebusinessenvironmentintheglobalautomotiveindustrywilllikelyremaindifficultoverthenextonetotwoyears,becauseofprolongedsupplychaindisruptions,highcosts,aglobaleconomicslowdown,andrisinginterestrates

?WebelievethatNissanMotor'sEBITDAmarginandsalesvolume,whichhavebothbeenweakoverthepasttwotothreeyears,areunlikelytoswiftlyimprovetothelevelswepreviouslyassumed.

?Theoutlookisstable,basedonlimiteddownsideriskforprofitability,andourexpectationthatthecompanywillmaintainconservativefinancialdisciplineandasoundbalancesheet

?Salesvolumeinfiscal2023willbearound3.6

million-3.7millionunitsand3.8million-4.0million

unitsinfiscal2024(3.4millionunitsinfiscal2022),wellbelowthe5.4millionunitsthecompany

targetsforannualproductioncapacityinitstransformationplan.

?Thepositiveearningseffectofsalespricehikesandlowersalesincentiveswilldecrease

?Keyrawmaterialspriceswillremainathigh

levels,andlogisticsandlaborcostswillincrease.

?Itwillgenerate￥100billion-￥200billionfreecashflowintheautomotivesegmentannually

?Thesegmentwillmaintainnetcashofaround￥1trillion

?Theassetqualityinthesalesfinancebusinesswillremainhealthy

S&P’sBase-CaseScenario

AstrongrecoveryinNissanMotor'sprofitabilityandglobalautosalesareunlikely

NissanMotorCo.Ltd–KeyMetrics

?Inourview,Nissan'sEBITDAmarginwill

stayataround4.5%-5.5%forthenextonetotwoyears.

?Thisisbelowthe6%wedeem

commensuratewithratingsinthelowerreachesofinvestmentgradeterritory.

?Thismargincontinuestosignificantlylagthe11%-12%ofVolkswagenAG's

(BBB+/Stable),the9%-10%ofHyundaiMotorCo.(BBB+/Stable),the8%ofFordMotorCo.(BB+/Positive),andthe7%ofRenaultS.A.(BB+/Stable).

ProfitabilityWillLikelyRemainWeakerThanPeers’

EBITDAMargins:NissanMotorvsKeyGlobalPeers

AutoSegmentEarningsRemainUnderStrongPressure

Earningrecoverydelaysduetoverydifficultbusinesscircumstances

?Nissan’sautobusinessdivision

hadbeenlossmakingforthepastthreeyears.

?Thecompanyhasnotyetfullyrecoveredfromthemostdifficultperiodithasexperiencedinthepast20years.

?Inourview,prolongedweak

profitabilitycouldpotentially

constrainthecompany's

investmentcapacityfortherapidlygrowingelectricvehicle(EV)

business.

RatingOutlook(1)

Outlook:Stable

?Inourview,theriskofsignificantearningsandfinancialdeteriorationislimited.

?Itsstrategiceffortsinthepastareresultingingradualearningsimprovement.

-Ithascutmorethan￥350billioninfixedcostsfromfiscal2018levels.Thecompanyclosedoverseasplantsandreducedthenumberofmodelsitsells.

-Nissanalsosustainedaconservativesalespolicywithafocusonprofitability.

?Inaddition,givenitsconservativefinancialdiscipline,webelievethefinancialsoundnessandnetcashpositionofitsautomotivesegmentcontinuestounderpinourratingonthecompany

RatingOutlook(2)

Upsidescenario

Wewillconsiderupgradingthecompanyifbothofthefollowingscenariosmaterializeoverthenext

12-18months:

.Carsalesinmajormarketsaremuchhigherthanweassume,andimprovedplantcapacityutilizationstrengthenstheprospectsofitsEBITDAmargin

stabilizingabove6%.

.WecometoexpectNissanMotor'sfreeoperatingcashflowtosalesratiowillimproveto2%withthecompanymaintainingahealthynetcashpositionintheautomotivesegment.

Downsidescenario

Wemayconsiderdowngradingthecompanyineitherofthefollowingscenarios:------e

.Pressurebuildsonitsstrongfinancialstandingbecauseofsizablestrategicinvestmentsorfreecashflowturningdeeplynegativeformultiple

years.

.NissanMotor'smarketpositionsignificantly

deterioratesinkeymarketssuchastheU.S.andChina.

Appendix

S&PGlobal

Ratings

IndustryTopTrends2023:Autos

?Extendedsupplydisruptionandsofteningdemandareriskstosalesvolumes

?Pricedeteriorationwillweighonmarginsandcashflow

Fromsupplychaindisruptiontodemandweakness

–Weexpectamoderate(4%-6%)increaseinunitsalesin2023and2024

–Growthwillbeheldbackbylingeringsupplychaindisruptionsin1H/2023andemergingdeclineindemandin2H/2023

–IncreasingpenetrationofEValbeitatdeclininggrowthrates

–Slowingconsumerdemandandhigherinterestrateswillpressureprices

GlobalAutos:RatingsTrend

2018

(yearend)

2019

(yearend)

2020

(yearend)

2021

(yearend)

2022

(yearend)

2023

(current)

ToyotaMotor

AA-/St

AA-/St

A+/Ng

A+/St

A+/St

A+/St

BMWAG

※A+/St

※A+/Ng

※A/Ng

※A/St

※A/St

※A/St

HondaMotor

A+/Ng

A/St

A-/Ng

A-/St

A-/St

A-/St

Mercedes-BenzGroup

※A/St

※A-/Ng

※BBB+/Ng

※A-/St

※A-/Pos

※A-/Pos

VolkswagenAG

※BBB+/St

※BBB+/St

※BBB+/Ng

※BBB+/St

※BBB+/St

※BBB+/St

GeneralMotors

※BBB/St

※BBB/St

※BBB/Ng

※BBB/St

※BBB/St

※BBB/St

NissanMotor

A/CWN

BBB+/Ng

BBB-/Ng

BBB-/Ng

BBB-/Ng

BB+/St

FordMotor

※BBB/Ng

※BBB-/St

※BB+/Ng

※BB+/Pos

※BB+/Pos

※BB+/Pos

Renault

※BBB/Ng

※BBB-/CWN

※BB+/Ng

※BB+/Ng

※BB+/Ng

※BB+/St

MitsubishiMotors

BB/Pos

BB+/St

BB/Ng

BB/St

BB/St

BB/Pos

NissanMotor:RatingsScoreSnapshot

RatingsScoreSnapshot

Issuercreditrating:

BB+/Stable/B

Businessrisk:

Fair

Countryrisk:

Lowrisk

Industryrisk:

Moderatelyhighrisk

Competitiveposition:

Fair

Financialrisk:

Modest

Cashflow/Leverage:

Modest

Anchor:

bbb-

Modifiers:

Diversification/Portfolioeffect:

Neutral

(noimpact)

Capitalstructure:

Neutral

(noimpact)

Financialpolicy:

Neutral

(noimpact)

Liquidity:

Strong

(noimpact)

Managementandgovernance:

Fair

(noimpact)

Comparableratinganalysis:

Negative

(-1notch)

Stand-alonecreditprofile:

bb+

ContactUs

HirokiShibata

SeniorDirector&AnalyticalManager,

CorporateRatings,Japan

+81345508437

hiroki.shibata@

KatsuyukiNakai

Director,CorporateRatings,Japan

+81345508748

katsuyuki.nakai@

RelatedResearch

?CreditFAQ:What'sBehindOurDowngradeOfNissanMotor?

,March8,2023

?NissanMotorDowngradedTo'BB+/B'OnProspectsForAnotherDifficultYear;OutlookStable

,Mar07,2023

?NissanRecoveryRemainsUncertainAfterAllianceRevamp

,Feb.7,2023

?IndustryTopTrends2023:Autos

,Jan.23,2023

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