Honda Corporate Update - 2017 Autumn
Accord Honda Corporate Update
Business Status 2030 Vision Business Strategy
Automobile Business Operations Motorcycle Business Operations
Other Topics Financial Highlights
2 Profit Structure Profile over Past Decade and FY18 Forecast
130
120
110 100 USD/JPY ￥109 for FY18 90
80
70 Yen (billion) 1,800 PP & Others Finance Motorcycle Automobile O/P Margin 7.9% 1,600 US GAAP IFRS
6.6% 1,400 6.4% 7% 6.0%
1,200 5.5% ・ ・Airbag Lehman ・Earthquake 5.0% Crisis ・Thai flood Inflator Issue 5.0% 1,000 953 4.2% 5% 823 840 745 800 670 3.4% 2.9% 569 544 600 461 503 501 3% 280 1.9% 363 153 400 231 192 189 177 182 171 200 1% 183 203 199 178 0 FY2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018(P)* 2012 -200 -1% * Forecast as of November1, 2017 3 Forecast: Honda Group Unit Sales
Unit Motorcycles Automobiles Power (Thousand) Products
18,770 19,180 6,121 6,165 6,165 17,661 5,028 5,080 5,130
+ 410 + 50 ± 0 ( + 2.2 %) ( + 1.0 %) ( ± 0 %)
FY17 FY18 FY18 FY17 FY18 FY18 FY17 FY18 FY18 Results Previous Revised Results Previous Revised Results Previous Revised Forecast Forecast Forecast Forecast Forecast Forecast FY18 FY18 FY18 FY18 FY18 FY18 Previous Revised Change Previous Revised Change Previous Revised Change Forecast Forecast Forecast Forecast Forecast Forecast Japan 170 165 -5 680 690 + 10 265 280 + 15 North America 315 315 - 1,920 1,920 - 3,010 3,010 - Europe 220 225 + 5 175 175 - 1,030 1,015 -15 Asia 17,015 17,375 + 360 2,060 2,100 + 40 1,460 1,455 -5 Other Regions 1,050 1,100 + 50 245 245 - 400 405 + 5 Total 18,770 19,180 + 410 5,080 5,130 + 50 6,165 6,165 - 4 FY18 Forecast: Change in Operating Profit
Yen (billion) Operating profit - 95.7 ( - 11.4 % )
Excluding currency effects and one time issue Operating profit + 53.0 ( + 7.1 % )
+ 75.0 - 57.0 - 11.0 - 54.0 840.7 - 84.0 + 89.0 798.7 Cost Increase in -53.7 Currency 745.7 SG&A 745.0 Effects Reduction, Increase in etc. Impact of Revenue, R&D Litigation pension model mix, settlement accounting etc. treatment
Operating margin Operating margin Operating margin Operating margin 6.0% 5.3% 5.3% 5.0% FY17 FY18 Results Revised Forecast 5 Change in the company’s shareholders’ return policy
【Purpose for the change】 Further improving the Company’s capital strategy
【Points of the change】 Acquisition of the Company’s own shares at a timing that it deems optimal
Goal: to maintain a Goal: to realize a return ratio shareholders’ return ratio of alone of approximately 30% approximately 30%
With respect to the redistribution of profits to its shareholders, the Company’s basic policy is to determine such distributions after taking into account, among others, its retained earnings for future growth and consolidated earnings performance based on a long-term perspective. 6 Honda Corporate Update
Business Status 2030 Vision Business Strategy
Automobile Business Operations Motorcycle Business Operations
Other Topics Financial Highlights
7 2030 Vision
8 2030 Vision
- Focus on three areas: Mobility, Robotics and Energy - Strive to further expand the joy of people by offering products and services - Strive to become No.1 in the areas of the environment and safety 9 2030 Vision
Utilize our corporate resources effectively and strengthen our business foundation. 10 2030 Vision
Further enhance inter-regional coordination and collaboration and increase the efficiency of our operations from a global perspective. 11 Global models: Accord, Civic, CR-V, Vezel/ HR-V and Fit/ Jazz
Accord - All-new Accord launched in October 2017 in N.A. to be followed by other markets Civic Accord - Underwent full model change in 2015 in N.A. and Sharing of down-sized successfully launched in global market turbocharged engine - Shares commonized platform between sedan, coupe at some trim levels and hatchback Focus on CR-V Civic platform and parts commonality - All-new CR-V underwent full model change in 2016 in N.A. - Hybrid model will be launched initially in China
Vezel/ HR-V - Grew into strong model and became one of the global CR-V models since its launch in 2013
Accord 11% Other Civic 13% 5.0mil CY2016 CR-V Derivative 14% models Vezel/ HR-V Focus on Fit Vezel platform and parts 10% 11% commonality *Derivative models: City/Grace, Greiz and XR-V
Global Models continue to be widely popular representing Fit/ Jazz approx. 70% of CY2016 global Honda unit sales 12 Global models: Direction of Model Development
2013 2014 2015 2016
Further enhance electrification, autonomous driving and connectivity technologies. Civic Spearhead industry effort to realize HR-V a carbon-free and collision-free mobile society. CR-V Fit • Adopt Lead-Country Introduction Strategy Global Operation Reform Accord • Concurrent development (Clarification of model development leadership in each region and increase model in all six regions development efficiency.) • Adoption of locally optimized design • Discuss introduction of modular strategies • Increase commonality of platform and parts • Introduce advanced platforms to (Civic, CR-V and Accord) accommodate electrification of powertrains
13 Regional Models
China: North America: Brand differentiation Light Truck models between two Joint Ventures Guangqi Dongfeng
Pilot Crider UR-V
Odyssey
Avancier XR-V Ridgeline
Asia: Meet demand in each Japan: Mini-vehicles country with affordable models
N-Box Mobilio BR-V N-Box +
N-One N-WGN Brio Amaze
Introduction of regional models has also been expanding in each region. 14 Model Allocation: North America
■ Production Allocation ■ As of the end of 2017 Production Ohio(East Liberty) Plant 2016 2017 Indiana Ohio RDX RDX East CR-V Civic Liberty Plant MDX CR-V (ELP) Shift CR-V MDX Split MDX Pilot Alabama Odyssey Global Source Ridgeline
CR-V Indiana Civic Civic Shift Alabama Mexico CR-V El Salto HR-V
Global Export to N.A. Civic Pilot Ridgeline Odyssey Source 15 Regional Models: China
Segment Sedan(4D/5D) SUV MPV
Guangqi Accord Avancier Odyssey D
Dongfeng Spirior UR-V Elysion (Mar 2017)
Guangqi Crider Jade C
Dongfeng Civic CR-V (July 2017) Two joint ventures offer different model types consistent with their Guangqi Fit City Vezel respective brand image B
Dongfeng XR-V Gienia Greiz
By utilizing common platforms and strengthening local procurement and R&D functions, successive launch of cost competitive models being realized. 16 2030 Vision
* Mono-zukuri: The art of making things Koto-zukuri: New experiences drawn from the art of making things (technology/manufacturing expertise) (innovative business solutions)
Identify and prioritize core technologies and strengths (ex. “powertrain”, “packaging”) to be developed in-house and strategically partner with external specialists for other technologies. 17 2030 Vision
GM: Collaborate on production of Next-Generation Fuel JP: Collaboration toward the establishment of local Cell stack charging station infrastructure HITACHI: Establish JV for the development, manufacture Grab: Collaboration in the area of motorcycle sharing and sale of motors for electric vehicles services YAMAHA: Collaboration in the area of small-sized Waymo: Technical collaboration for fully autonomous scooters in the Japanese market automobile driving technology 18 2030 Vision
19 Honda Corporate Update
Honda Business Status 2030 Vision Business Strategy
Automobile Business Operations Motorcycle Business Operations
Other Topics Financial Highlights
20 Roadmap for Environmental Technologies
Strive to electrify two-thirds of all vehicles we sell globally by 2030
New FCV ZERO Clarity Fuel Cell 0 FCX Clarity New BEV emissions FCX (2016) Ｚ Urban EV Concept (2002) (2008) in China technology Clarity BEV (2017) Technologies to (CO2(g/km) increase electrical Clarity PHEV (2017) efficiency Accord PHEV (2013) Global expansion CR-V HEV Technologies to (2017) increase thermal Turbo engine efficiency Global expansion DI engine CVT / DCT 2000 20102015 2020 2030 Developments related to expansion of electrified vehicles - Established Electric Vehicle Development Division in Oct 2016 - Launch of Clarity BEV and Clarity PHEV in N.A.(2017) and Japan (2018). - Introduced CR-V Hybrid model in 2017 in China (world premier) - Introduction of China-exclusive BEV model and Acura CDX Hybrid in 2018 - Dedicated EV models based on Urban EV Concept will be launched in Europe (2019) and Japan (2020). 21 Roadmap for Environmental Technologies: Clarity Series
“3-in-1” Clarity series provides unparalleled electric drive choice with premium midsize sedan capability and three advanced electrified powertrains in a single vehicle platform to address cost and manufacturability
PHEV: BEV: FCV: Benefits of both Affordable model for Supreme environmental Hybrids and BEVs daily use technology
- The Clarity Fuel Cell, only five-passenger FCV sedan in the industry, launched in Japan in March 2016 and in U.S. in December 2016, respectively - Clarity Plug-in Hybrid, which earned a class-leading 47-mile EV driving range rating and 340-mile extended range rating, will be launched in the U.S.(2017) and in Japan (2018). 22 Toward realization of a collision-free mobile society
* For Acura vehicles, called “Acura Watch”
Expanding adoption of Honda SENSING Japan: Make Honda SENSEING standard equipment on all new models to be introduced North America/ China/ Europe/ Other regions: Expanding application to all-new models 23 Automated Driving Vision
Realize Provide freedom of mobility Create freedom collision-free society for everyone of time and space, make (zero human error) whenever it is needed traveling enjoyable
Serve people worldwide with the joy and freedom of collision-free mobility 24 Automated Driving Roadmap
✔
✔
- Strive to realize automated lane-changing function which enables the vehicle to drive in multiple lanes without any command from the driver on highways in 2020 - Strive to achieve the technological establishment of “level 4” automated driving for use in personal cars by around 2025 25 Global Production Capacity
Unit (thousand)
5,550 -150 5,400 +120 5,520 -250 5,270
Other 151 151 151 151 1,080 1,080 1,200 China 1,200 +50 +50 +50 (Export only) (Export only) (Export only) +50 (Export only) Plan 1,080 FY2017 Plan Asia 930 930 Japan China Thailand Saitama 930 Dongfeng -150 -250 Europe 200 200 +120 200 200
North 1,923 1,923 1,923 America 1,923
Japan 1,066 1,066 1,066 816
as of Mar '16 Apr '17 Plan '19 Plan '22
26 Flexible Global Production Infrastructure
(Units) ■ Utilization Image Japan Civic 5D Electrified models Europe 1.06 mil Jazz Clarity Series
South America Asia 150,000 930,000 China
Unit (thousands) United States Japan
2,500 5,000
0 0 CY09 10 11 12 13 14 15 16 FY10 11 12 13 14 15 16 17 Source: Autodata Source: MUMSS
1,000 500
500 250
0 0 CY09 10 11 12 13 14 15 16 FY10 11 12 13 14 15 16 17 Source: Honda Source: Honda
Increase production capacity of light truck Improve capacity utilization through models to meet industry demand exporting global models 28 Automobile Operations by Regions
Unit (thousands) Europe (EU+EFTA) China
0 0 CY09 10 11 12 13 14 15 16 CY09 10 11 12 13 14 15 16 Source: Honda
0 0 CY09 10 11 12 13 14 15 16 CY09 10 11 12 13 14 15 16 Source: ACEA / Honda Source: Honda
U.K. has been designated to serve as Further expand sister models strategy. global supply base of the Civic Series. 29 Automobile Operations by Regions
Unit (thousands) Asia Brazil
0 0 CY09 10 11 12 13 14 15 16 CY09 10 11 12 13 14 15 16
750 200 Malaysia Thailand Indonesia Philippines 587 578 153 524 India 135 139 138 474 126 126 500 123 356 93 297 100 252 227 250
0 0 CY09 10 11 12 13 14 15 16 CY09 10 11 12 13 14 15 16 Source: Honda Source: Honda
Introduce new models to meet specific Improve Forex toughness by increasing local market needs in each Asian market. procurement and localization of development. 30 Automobile New Model Introductions (global models only)
Civic CY2015 CY2016 CY2017 Sedan November March North Coupe America Hatchback September Type R June Civic Sedan Sedan Sep Japan Hatchback Sep Type R Sep April Sedan Civic Hatchback Europe Hatchback March Type R Asia Sedan March~ China Sedan April Civic Type R Brazil Sedan August
CR-V CY2015 CY2016 CY2017 North Gas December America Asia Gas March~ Gas July China HEV Sep CR-V Civic has already been launched in most regions. CR-V is currently being introduced in many regions as well. 31 Automobile New Model Introductions (main models only)
Already Launched in 2017 To be launched
UR-V: China WR-V: Brazil, India Accord: N.A.
Mar Apr May Jun Jul Aug Sep Oct
Clarity PHEV: U.S., Japan
Odyssey: N.A. N-Box: Japan
Clarity BEV: U.S.
* Please note that “To be launched” models reflect the current plan and is subject to change. Also, photos are from currently available sources and are not actual specification models. 32 Honda Corporate Update
Business Status 2030 Vision Business Strategy
Automobile Business Operations Motorcycle Business Operations
Other Topics Financial Highlights
33 Overview of Motorcycle Business
Operating Profit and Margin Yen (billion) 300
250 9.7% 10.8% 10.6% 10.5% 10.4% 10.1% 9.9% 7.1% 8.2% 5.2% 200
150
100
50 151 100 59 139 143 110 177 192 182 171 0 FY08 09 10 11 12 13 14 15 16 17 *Operating profit and margin until FY13 are based on US GAAP while FY14 and after are based on IFRS
Honda M/C Business = High Profitability + Stability + Growth Potential
Unit (thousand) Honda Global Unit Sales 16,000
12,000
8,000
4,000
0 2008 2009 2010 2011 2012 2013 2014 2015 2016 *excluding sales by Hero Honda 34 Overview of Motorcycle Business
Mega Models Annual sales of each of these “Mega Models” has grown to approximately 3 million units. By leveraging the scale merit of this sales volume we will further enhance the efficiency of our parts procurement activities.
Cub 110/125cc 2.3 mil Light Motorcycle 110/125cc 17.66 mil 1.9 mil FY2017 ACTIVA 110cc 2.4 mil Scooter 110cc 3.6mil
35 Motorcycle Market Size and Honda Share (CY2016)
Motorcycle production at 35 plants in 21 countries
Thailand 1.7 mil Vietnam 3.1 mil
Europe 16% 69% 0.9 mil 79% 21% U.S.A (MC+ATV)
Italy 0.7 mil U.S.A Japan Mexico China 47 (ATV, S×S) Pakistan % Bangladesh 0.4 mil India Vietnam Thailand Philippines Nigeria Malaysia Kenya Peru
Indonesia Indonesia Brazil 5.9 mil 27% Argentine 74% 71% India Brazil 17.7 mil 1.0 mil *Market share excluding 50cc
Annual Production Capacity in India
5.8mil in 2016 6.4mil in 2017 36 Growth in Motorcycle Popularity
(CY2016) GDP per capita 1.7mil (USD) Thailand
4,000 Indonesia Philippines 5.9mil 3,000 Nigeria 1mil 0.4mil 3.1mil 2,000 India Kenya Myanmar Bangladesh 17.7 mil Vietnam 0.8 1.4mil mil 1,000 0.1mil 0.2mil Pakistan
Next Markets Growing Markets Mature Markets
Source: Honda & IMF Motorcycle Market Penetration in Asia (millions)
India 8% 1,292
Indonesia 25% 255 Significant growth expected
Vietnam 33% 91 Number of motorcycles units in operation Population Thailand 40% 68 37 Motorcycle Market Share Trend in India
■ Fast Growing Segment India (Wholesale) Scooter / Motorcycle Sales Ratio (Industry) 50% In CY2011 In CY2016 SC 45% 18% SC Company A 32% 40% Hero Honda MC MC 68% 35% 82% ■ 30% Honda Scooter Unit Sales of Honda / Competitors and Honda Share in Scooter Market 25% Company B 7,000 Competitors (Unit) 70% 20% Honda (Unit) 6,000 60% Honda Share(%) Company C 15% 5,000 50%
10% 4,000 40% Company D 5% 3,000 30%
0% 2,000 20% 2010 2011 2012 2013 2014 2015 2016
1,000 10% Honda has gained the No.2 market share position. 0 0% 2010 2011 2012 2013 2014 2015 2016 38 India Motorcycle Operations
Capacity Expansion Expanded annual production capacity to 6.4 mil. 1st Manesar 6.4mil nd 2 5.8mil Rajasthan 1.2 4th 4th 4.6mil 4.6mil 1.2 Gujarat 4.0mil 2.4 3rd 1.2 1.8 1.8 1.8 1.2 1.2 1.2 1.2 1.2 2nd 3rd Karnataka 1.6 1.6 1.6 1.6 1.6 1st
CY13 CY14 CY15 CY16 CY17 Product Line-up
110cc AT-Scooter 110cc AT-Scooter 125cc Motorcycle 110cc Motorcycle Activa Dio CB Shine Dream Yuga 39 Motorcycle Business Operations in Next Markets
Unit Pakistan Unit Myanmar (thousands) (thousands) 2,000 70% 2,000 70% Others 60% 60% 51% 52% Honda 1,500 47% 48% 48% 1,500 50% Share 50%
40% 40% 1,000 1,000 30% 30%
20% CD70 20% 500 500 12% 9% 10% Others 10% 1% Honda 0% 1% 0 0% 0 0% FY13 14 15 16 17 Share FY13 14 15 16 17
Bangladesh Honda Business Strategy Unit < Pakistan > (thousands) ・Local production capacity was increased to 1.35 million 1,000 70% units in 2016 Others 60% ・Increase dealer network and number of service shops ・Expand model line-up by strengthening the 750 Honda 50% competitiveness of core 70cc models as well as Share introducing larger sized 125cc to 150cc models 40% 500 < Myanmar > 30% ・Expand model Line-up 20% ・Expand dealership network 250 < Bangladesh＞ 4% 5% 6% 10% 0% 0% ・Construct new plant (100k units in 2018 and 200k units in 2021) 0 0% ・Expand dealership network FY13 14 15 16 17 ・Cost reductions through increase in local procurement 40 Electrification in Motorcycle and Mobile Battery
Introduce PCX ELECTRIC / PCX HYBRID in the Asia region including Japan (2018).
For future expansion of electric motorcycles/scooters: - Utilizing electric commuters, which feature a detachable mobile battery is under consideration (in collaboration with the Japan Post Co., Ltd.)
- E-KIZUNA project with Saitama-city and Yamaha Motor Co., Ltd. is conducting an experiment involving electric motorcycles and replacement of batteries. EV motorcycle sharing scheme also under consideration.
Removable mobile battery pack and recharging station
PCX Electric Honda Mobile Honda Mobile Power Pack Exchanger Power Pack Concept 41 Honda Corporate Update
Business Status 2030 Vision Business Strategy
Automobile Business Operations Motorcycle Business Operations
Other Topics Financial Highlights
42 Transition to the Company with Audit and Supervisory Committee
✔
- For faster decision making, transfer of authority to Executive Council from Board of Directors to resolve most matters - Board of Directors will focus more on discussions of mid to long term business strategies, as well as strengthening of oversight function 43 HondaJet
The HondaJet is the world’s most advanced light jet. The aircraft is the fastest, highest-flying, most fuel-efficient, and achieves most comfortable cabin in its class.
Advanced Technologies Certification Received - Over-The-Wing Engine Mount (OTWEM) Configuration - United States (Dec. 2015) Wave drag reduction, maximized fuselage space - Mexico (Mar. 2016) - Europe (May. 2016) - Natural Laminar Flow (NLF) Technology - Natural laminar Flow Wings and Nose - Canada (Jun. 2017) Aerodynamic drag reduction Outstanding flight speed and fuel efficiency - Brazil (Aug. 2017) - Composite Fuselage - Over-the-Wing Mounted Engines Sales Units Light-weightFaster flight speed, structure greater fuel efficiency, and more spacious cabin - Delivered 54 units by the end of Sept. 2017 - Advanced Cockpit - HondaJet ranks as Most-delivered Jet in its Minimized pilot workload, intuitive operation category during first half of 2017.
44 Honda Corporate Update
Business Status 2030 Vision Business Strategy
Automobile Business Operations Motorcycle Business Operations
Other Topics Financial Highlights
45 Outline of FY18 Six Months Results Summary (Consolidated)
Results Summary Operating profit was 422.1 billion yen, a 14.7% decrease compared to the same period last year. Excluding FOREX effects, the multi-district class action litigation settlement and the reverse impact of the pension accounting treatment during the same period last year, robust motorcycle sales, cost reduction efforts and other factors resulted in a real term profit increase of 53.1 billion yen. Profit for the quarter attributable to owners of the parent increased 381.3 billion yen, an 8.4% increase compared to the same period a year ago, due to an increase in share of profit of investments accounted for using the equity method.
Unit Sales Revenue / Operating Profit / Profit for the Period Consolidated Unit Sales (Thousand) Yen (billion) 494.9 6,691 2,000 3,000 8,000 7,489.2 400 381.3 1,798 1,807 2,728 351.7 6,000 5,873 2,589 6,734.6 422.1 400 1,500 6,000 300 incl. 2,000 Pension 4,000 impact 84.0（profit） 1,000 4,000 incl. 200 200 litigation settlement 2,000 1,000 53.7（loss） 500 2,000 100
0 0 0 0 0 0 Motorcycles Sales Revenue Profit for the Period Operating Profit attributable to owners of the parent 46 Honda Group Unit Sales
Power Unit (Thousand) Motorcycles Automobiles Products 9,937 2,728 2,559 2,589 8,890 2,431
+ 1,047 + 128 - 139 ( + 11.8 %) ( + 5.3 %) ( - 5.1 %)
FY17 FY18 FY17 FY18 FY17 FY18 Six Months Six Months Six Months Six Months Six Months Six Months FY17 FY18 FY17 FY18 FY17 FY18 Change Change Change Six Months Six Months Six Months Six Months Six Months Six Months Japan 62 84 + 22 302 324 + 22 146 138 -8 North America 149 163 + 14 989 933 -56 1,291 1,141 - 150 Europe 120 134 + 14 90 85 -5 390 406 + 16 Asia 8,010 9,023 + 1,013 935 1,093 + 158 736 741 + 5 Other Regions 549 533 -16 115 124 + 9 165 163 -2 Total 8,890 9,937 + 1,047 2,431 2,559 + 128 2,728 2,589 - 139
Honda Group Unit sales include those of Honda, its subsidiaries and affliates which are acounted for using the equity method (mainly wholesale basis). 47 Main Market (Automobiles – Japan)
・N-Box series was the best-selling model in Japan in fiscal first half Japan Retail - 94 thousand units sold making it the best-selling model in Japan, even including registered vehicles Unit (Thousand) Vs. FY17 -The new edition, launched in September generated over Industry Demand： 2,482 (107.6%) 52 thousand unit orders in first month on the market Unit Sales ： 333 (103.6%) ・New Civic launched （Sept.） （Source：Japan Automobile Dealers Association）
Unit (Thousand) ・Expansion of Honda SENSING as standard 333 322 equipment across all trim levels - starting with N-Box followed by Shuttle (Sept.) and Step WGN models (Sept.)
+ 3.6 %
FY17 FY18 N-BOX Six Months Six Months 48 Main Market (Automobiles – U.S.)
・Despite decrease in industry demand, Honda’s retail sales were on par with the U.S Retail same period last year. -Strong sales of Civic, HR-V and Acura RDX Unit (Thousand) vs. FY17 Industry Demand： 8,842 (98.1%) ・ Unit Sales ： Production of the brand-new Accord 866 (99.5%) began（Sept.） （Source：Autodata） Unit (Thousand) ・ 871 866 Enhancing Honda’s supply network for light truck models -Production of Acura MDX was shifted from Alabama plant to East Liberty Plant in Ohio（May）
-0.5 %
Acura RDX
FY17 FY18 Civic Hatchback Six Months Six Months 49 Main Market (Automobiles – China)
・729 thousand unit sales China Retail in fiscal first half is the highest in history -Strong sales of Civic, UR-V and Avancier
Unit (Thousand) vs. FY17 Industry Demand *：13,218 (103.5%) ・ CR-V Sports Hybrid model launched Unit Sales ： 729 (118.9%) (Sept.)
*Industry demand is wholesale basis （source：China Association of Automobile Manufactures） ・Announced joint development of EVs for Unit (Thousand) 729 the Chinese market with a local IT company named Neusoft (Sept.) 613
+ 18.9 %
Avancier
FY17 FY18 CR-V Six Months Six Months 50 Main Market (Motorcycle – India)
・Sales surpass pace of overall market for India Wholesale fiscal first half (vs. FY17 :117.7%)
Unit (Thousand) vs. FY17 -Strong sales of scooters such as Activa and DIO Industry Demand ：10,504 ( 110.2%) Unit Sales ： 3,146 ( 117.7%) ・Expantion of production at Number 4th line of the Number 3rd plant in Narsapura, （Source：Honda） Karnataka 3,146 Unit (Thousand) -Honda’s overall motorcycle production capacity in India increased to 6.4 million units 2,673
+ 17.7 %
“Line-off ceremony” of the Number 4th FY17 FY18 line at the 3rd plant Six Months Six Months 51 News Topics
・ Announced evolution of automobile production system to further enhance Mono-zukuri (the art of makingthings/manufacturing) in Japan - To produce new technologies such as for the electrification of vehicles, automobile production at the Sayama Plant and Yorii Plant will be consolidated at the Yorii Plant by the fiscal year ending March 31, 2022 - Within the Yorii Plant, a function to create, standardize and globally share new automotive production technologies, including electrification, to be established ・ 100 Million-Unit Cumulative Global Production Milestone for Super Cub Series （Oct.） -Production of Super Cub 110 began at Yamato Plant Yorii Plant in Saitama in August,1958 -Currently produced at 16 plants in 15 countries and sold in more than 160 countries Super Cub 110 commemoration model
・ Selected as a component of the Dow Jones Sustainability World Index （Sept.） -Selected for the first time as a component of “Dow Jones Sustainability World Index ”, which benchmarks for socially responsible companies -Selected for 3rd cumulative year as a component of “Dow Jones Sustainability Asia/Pacific Index”, which targets companies in Asia/Pacific
52 FY18 Six Months Financial Results (Consolidated)
Six Month Results Financial Results Yen (billion) FY17 FY18 Change
Sales revenue 6,734.6 7,489.2 + 11.2%
Operating profit 494.9 422.1 - 14.7%
Operating margin 7.3% 5.6% - 1.7pt Share of profit of investments + 101.6% accounted for using the equity method 67.0 135.2 Profit before income taxes 559.0 577.6 + 3.3% Profit for the period attributable to owners of the parent 351.7 381.3 + 8.4%
Earnings per share *1 (Yen) 195.19 211.59 + 16.40 attributable to owners of the parent For *1, please refer to footnote on page 43 Market average rates (Yen) Yen down by US Dollar 105 111 6 yen
53 FY18 2nd Quarter Unit Sales
2Q Results (3 Months) Honda Group Unit Sales FY17 FY18 Honda Group Unit (Thousand) Unit Sales FY17 FY18 Change 6,000 1,400 1,292 1,500 5,238 1,218 (Thousand) 1,200 1,240 1,258 5,000 4,538 1,000 Motorcycles 4,538 5,238 + 15.4% 4,000 1,000 800 3,000 600 Automobiles 1,218 1,292 + 6.1% 2,000 500 400
1,000 200 Power Products 1,240 1,258 + 1.5% 0 0 0 Motorcycles Automobiles Power Products 2Q Results (3 Months) Consolidated Unit Sales Unit Consolidated (Thousand) 4,000 1,000 907 1,500 Unit Sales FY17 FY18 Change 3,446 890 1,258 （Thousand） 1,240 3,042 800 3,000 1,000 Motorcycles 3,042 3,446 + 13.3% 600 2,000 400 Automobiles 890 907 + 1.9% 500 1,000 200
Power Products 1,240 1,258 + 1.5% 0 0 0 Motorcycles Automobiles Power Products
Honda Group Unit Sales - Increase in motorcycle unit sales due mainly to sales growth in India, Indonesia and Vietnam. - Increase in automobile unit sales due mainly to sales growth in China and Japan despite a decline in sales in North America 54 FY18 2nd Quarter Financial Results (Consolidated)
2Q Results (3 Months) Financial Results Financial Summary FY17 FY18 Change Yen (billion) Sales revenue increased by 15.7% primarily Sales revenue 3,262.9 3,776.1 + 15.7% due to sales increases in all business Operating profit 228.0 152.9 - 32.9% operations and positive foreign currency Operating margin 7.0% 4.1% - 2.9pt translation effects. Share of profit of investments accounted for using the equity 39.8 82.2 + 106.4% Operating profit decreased by 32.9% due method primarily to the multi-discrict class action Profit before income taxes 270.5 242.6 - 10.3% litigation settlement and the impact of the Profit for the period (Yen) attributable to owners of the parent 177.0 174.0 -1.7% pension accounting treatment during the
Earnings per share *1 same period last year, despite the positive 98.26 96.55 - 1.71 attributable to owners of the parent impact from revenue and model mix and Market average rates (Yen) For *1, please refer to the footnote on page 43 a decline in SG&A expenses. Yen down US Dollar 102 111 by 9 yen Operating Margin Operating Profit Yen (billion) 10% 300 FY17 (excl. pension FY17 266.8269.2 FY18 7.7% impact 4.4%) FY18 8% 7.0% 228.0 207.6 5.9% 200 6% 7.3% 152.9 138.1 3.7% 4% (excl. litigation settlement 5.5%) 100 2% 4.1%
0% 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 55 Motorcycles - Honda Group Unit Sales (Motorcycles, All-Terrain Vehicles, Side-by-Side etc.)
＜Asia＞ Unit (Thousand) ・Increased sales in India, Indonesia and Vietnam ＜North America＞ + 700 6,000 ・ Increased sales of GROM125 and other sports ( + 15.4 % ) Rebel 500 motorcycles (U.S.) ・ 5,000 Positive effect of Rebel 500 new model introduction
4,000
3,000 5,238 4,538 4,699 2,000 4,352 4,523 4,248
1,000
0 1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18
Japan 29 33 49 45 42 42 North America 78 71 68 77 80 83 Europe 72 48 31 66 81 53 Asia 3,885 4,125 4,115 3,812 4,219 4,804 Other Regions 288 261 260 248 277 256 Total 4,352 4,538 4,523 4,248 4,699 5,238 56 Automobiles - Honda Group Unit Sales
＜Asia＞ Unit (Thousand) ・ China:increased sales of Civic and Avancier ＜Japan＞ + 74 ・ Increased sales of Freed and N-Box ( + 6.1 % ) Freed ＜North America＞ 1,500 (Japan) ・ Decreased sales in the sedan segment
1,000
1,213 1,218 1,312 1,285 1,267 1,292 500
0 1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18
Japan 146 156 170 196 157 167 North America 510 479 510 471 481 452 Europe 45 45 43 51 42 43 Asia 453 482 527 502 523 570 Other Regions 59 56 62 65 64 60 Total 1,213 1,218 1,312 1,285 1,267 1,292 57 Power Products - Honda Group Unit Sales
Unit (Thousand) ＜North America＞ ・Increased sales of generators in the U.S. + 18 ＜Japan＞ ( + 1.5 % ) ・ Decreased sales of OEM engines EU2000i (generator) 2,500
2,000
1,500
1,000 2,218 1,488 1,331 500 1,240 1,175 1,258
0 1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18
Japan 59 87 54 101 59 79 North America 769 522 521 1,165 596 545 Europe 225 165 190 455 240 166 Asia 360 376 311 383 362 379 Other Regions 75 90 99 114 74 89 Total 1,488 1,240 1,175 2,218 1,331 1,258 58 Cash Flows of Non-financial Services Businesses
FY17 Six Months Free cash flow Yen (billion) + 225.4 Net Change -70.4 + 503.1 - 277.7 - 154.5 1,666.8 Cash flows from - 141.3 1,596.4 investing activities Cash flows from Cash flows from financing activities Effect of exchange operating activities rate changes
Net Cash Profit before income taxes + 461.9 Capital expenditures - 220.1 Dividends paid - 79.3 Net Cash Share of profit of investment accounted 1,171.5 Intangible assets -77.4 Others - 75.2 1,179.9 for using the equity method - 67.0 Depreciation* + 326.7 Other +19.8 Other - 218.4
Cash & Cash equivalents Cash & Cash equivalents at beginning of FY17 at end of period
FY18 Six Months Free cash flow Net Change + 100.4 + 234.0 + 524.9 - 290.8 - 165.7 2,002.5 + 32.1 2,102.9 Cash flows from Cash flows from investing activities Cash flows from Effect of exchange operating activities financing activities rate changes Net Cash Net Cash 1,524.8 Profit before income taxes + 469.1 Capital expenditures - 236.0 Dividends paid - 86.5 1,627.9 Share of profit of investment accounted Intangible assets - 71.7 Others - 79.2 for using the equity method - 135.2 Other + 16.8 Depreciation* + 349.9 Other - 158.9 Cash & Cash equivalents at end of period Cash & Cash equivalents * Depreciation, amortization and impairment losses excluding equipment on operating leases at beginning of FY18 59 Change in Profit before Income Taxes
Yen (billion) Profit before Income Taxes - 27.9 ( - 10.3 % )
Operating Profit - 75.1 ( - 32.9 % )
Excluding currency effects, pension impact and litigation settlement + 39.9
+ 21.4 - 16.1 + 22.6 - 84.0 + 11.4 Increase in + 23.2 Decrease in Currency R&D Cost SG&A Effects 270.5 Reduction, Revenue, etc. - 53.7 model mix, + 4.7 242.6 Impact of + 42.4 etc. Finance income Pension and
Yen (billion) Profit before Income Taxes + 18.5 ( + 3.3 % )
Operating Profit - 72.7 ( - 14.7 % )
Excluding currency effects, pension impact and litigation settlement + 53.1
+ 31.4 -6.1 - 23.6 + 11.8 - 84.0 + 51.5 Increase in 559.0 Cost SG&A Increase in Currency + 23.2 577.6 Reduction, R&D Effects - 53.7 + 68.1 Revenue, etc. Impact of Finance income model mix, and etc. Pension finance costs Accounting Litigation Share of profit of Treatment Settlement investments accounted for using the equity
Unit (Thousand) FY17 FY18 Yen (billion) 1Q 2Q 3Q 4Q 1Q 2Q Honda Group Unit Sales 4,352 4,538 4,523 4,248 4,699 5,238 (Consolidated Unit Sales) (2,831) (3,042) (2,675) (2,689) (3,245) (3,446) Sales Revenue 432.4 409.3 420.6 453.7 508.5 510.1 ( + 24.6 % ) Yen + 100.7 (Currency effect + 42.2) (billion) Operating Profit Operating Margin 160 20% 14.5% 15.5% 140 (excl. pension impact ：12.9%) 13.4% 15% 10.0% 8.4% 120 7.2% 10%
100 ＜Increase Factors＞ 5% ・Positive impact from sales volume ( + 15.1 % ) 80 and model mix, etc. 0% ＜Decrease Factors＞ ・The impact of the pension accounting 60 treatment, etc. -5%
40 78.8 -10% 59.5 68.5 20 41.8 -15% 31.1 38.1
0 -20%
1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18 62 Automobile Business Sales Revenue/Operating Profit (Margin)
Unit (Thousand) FY17 FY18 Yen (billion) 1Q 2Q 3Q 4Q 1Q 2Q Honda Group Unit Sales 1,213 1,218 1,312 1,285 1,267 1,292 (Consolidated Unit (908) (925) (960) (900) Sales) (890) (907) Sales Revenue 2,536.1 2,377.4 2,596.4 2,746.7 2,624.5 2,693.0 ( + 13.3 % ) Yen 500(billion) Operating Profit + 315.6 (Currency effect + 180.4) 20% Operating Margin 5.5% 7.3% (excl. pension impact ：2.4%) 1.5% 10% 400 5.0% 5.3% (excl. litigation settlement ： 2.0% 3.4%)
＜Increase Factors＞ 0% 300 ・Decrease in SG&A expenses, etc. ＜Decrease Factors＞ ・The impact of the pension accounting -10% treatment 200 ・The multi-district class action litigation settlement, etc. ( - 70.2 % ) -20%
100 184.5 -30% 131.8 129.8 140.3 54.9 39.2 0 -40%
1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18 63 Power Product & Other Businesses Sales Revenue/Operating Profit (Margin)
Unit (Thousand) FY17 FY18 Yen (billion) 1Q 2Q 3Q 4Q 1Q 2Q Honda Group * Unit Sales 1,488 1,240 1,175 2,218 1,331 1,258 (Consolidated Unit (1,488) (1,240) (1,175) (2,218) (1,331) (1,258) Sales) Sales Revenue 80.9 73.5 80.3 114.8 83.1 87.8 ( + 19.3 % ) *Honda Group Unit Sales and Consolidated 10.0 10% Yen + 14.2 (Currency effect + 5.2) Unit Sales include only power product units (billion) Operating Profit 7.5 Operating Margin ＜Increase Factors＞ ・Positive impact from sales volume and model mix, etc. 5.0 ＜Decrease Factors＞ 5% ・The impact of the pension accounting treatment ・Increased expenses in other businesses operations etc. 2.5 0.5 0.1 0.0 -1.0 0% 0.7% -2.7 0.2% -2.0 -2.5 -1.4% -6.3 (excl. pension impact ：- 4.4%) -2.4% -2.3% -5.0 -5%
-7.5 -7.9% -10.0 -10% 1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18 (For reference) Operating profit from aircraft and aircraft -8.8 - 10.6 - 12.3 - 12.0 - 8.5 - 13.6 engines 64 Financial Services Business Total Assets/Sales Revenue/Operating Profit (Margin)
FY17 FY18 Yen (billion) 1Q ２Ｑ ３Ｑ ４Ｑ １Ｑ ２Ｑ Total Assets of Finance 8,538.3 8,440.3 9,643.3 9,437.0 9,494.4 9,688.7 Subsidiaries Sales Revenue 467.9 446.3 455.7 521.1 539.6 539.5 ( + 20.9 % ) Yen (billion) Operating Profit + 93.1 (Currency effect + 37.0) 20% 120 Operating Margin 15% 10.8% 100 9.3% 9.2% 9.2% 8.5% 8.8% 10%
80 5%
-5% 40 -10% 50.5 47.7 49.8 20 42.3 47.2 37.7 -15%
0 -20%
1Q 2Q 3Q 4Q １Ｑ ２Ｑ FY17 FY18 65 Sales Revenue/Operating Profit (Margin) by Business Segment
Power Product Motorcycle Automobile and Other Financial Services Unit (Thousand) Business Business Businesses Business Yen (billion) FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Honda Group 8,890 9,937 2,431 2,559 2,728 2,589 －－ Unit Sales (Consolidated Unit Sales) (5,873) (6,691) (1,798) (1,807) (2,728) (2,589) (－)(－) Sales Revenue 841.7 1,018.6 4,913.5 5,317.6 154.4 170.9 914.3 1,079.2
Operating Profit : Yen (billion) 350 Operating Margin : (%) 300
250
200 316.3 150 (6.4 %) 100 179.5 147.3 (3.4 %) 97.1 50 90.7 (14.5 %) -0.5 -1.8 88.3 (10.8 %) (-0.3 %) (-1.1 %) (9.7 %) (9.0 %) 0 + 62.5 % - 43.2 % + 9.9 % -50
FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months 66 Sales Revenue/Operating Profit by Geographical Segment
North Other Japan America Europe Asia Regions FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Yen (billion) 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q
Sales Revenue 977.5 1,058.2 1,839.2 2,067.9 161.0 208.9 831.2 1,094.2 173.6 202.6
Operating Profit: Yen (billion) 120
100
80 incl. pension impact 60 84.0（profit） 110.3 91.2 40 85.8
incl. litigation 20 34.3 38.1 settlement 13.4 12.0 （ ） 53.7 loss 0.1 2.5 0 - 60.0 % -0.6 + 20.8 % - 10.6 % -20 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 2Q 67 Sales Revenue/Operating Profit (Margin) by Geographical Segment
North Other Japan America Europe Asia Regions
Yen (billion) FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months
Sales Revenue 1,883.2 2,083.2 3,908.0 4,198.1 344.0 422.2 1,662.5 2,075.9 346.5 406.5
Operating Profit: Yen (billion) 250
200
incl. litigation 150 settlement incl. 53.7（loss） pension 209.3 100 impact 208.1 84.0（profit） 181.6 50 100.9 27.7 26.7 66.0 55.8 1.3 9.1 0 - 15.4 % - 51.8 % + 14.6 % -3.7 %
-50 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months Six Months 68 Share of Profit of Investments Accounted for Using the Equity Method
Yen (billion) + 42.4 ( + 106.4% ) 100
80
60
40 82.2
49.1 48.5 52.9 20 39.8 27.2
0
1Q 2Q 3Q 4Q 1Q 2Q FY17 FY18
Yen (billion)
From Asia 39.3 36.2 40.8 43.8 46.3 57.9
69 Forecast: Honda Group Unit Sales
Unit Motorcycles Automobiles Power (Thousand) Products
18,770 19,180 6,121 6,165 6,165 17,661 5,028 5,080 5,130
+ 410 + 50 ± 0 ( + 2.2 %) ( + 1.0 %) ( ± 0 %)
FY17 FY18 FY18 FY17 FY18 FY18 FY17 FY18 FY18 Results Previous Revised Results Previous Revised Results Previous Revised Forecast Forecast Forecast Forecast Forecast Forecast FY18 FY18 FY18 FY18 FY18 FY18 Previous Revised Change Previous Revised Change Previous Revised Change Forecast Forecast Forecast Forecast Forecast Forecast Japan 170 165 -5 680 690 + 10 265 280 + 15 North America 315 315 - 1,920 1,920 - 3,010 3,010 - Europe 220 225 + 5 175 175 - 1,030 1,015 -15 Asia 17,015 17,375 + 360 2,060 2,100 + 40 1,460 1,455 -5 Other Regions 1,050 1,100 + 50 245 245 - 400 405 + 5 Total 18,770 19,180 + 410 5,080 5,130 + 50 6,165 6,165 - 70 Forecast: Consolidated Unit Sales
Unit Motorcycles Automobiles Power (Thousand) Products
12,220 12,620 6,121 6,165 6,165 11,237 3,683 3,685 3,690
+ 400 + 5 ± 0 ( + 3.3 %) ( + 0.1 %) ( ± 0 %)
FY17 FY18 FY18 FY17 FY18 FY18 FY17 FY18 FY18 Results Previous Revised Results Previous Revised Results Previous Revised Forecast Forecast Forecast Forecast Forecast Forecast FY18 FY18 FY18 FY18 FY18 FY18 Previous Revised Change Previous Revised Change Previous Revised Change Forecast Forecast Forecast Forecast Forecast Forecast Japan 170 165 -5 615 620 + 5 265 280 + 15 North America 315 315 - 1,920 1,920 - 3,010 3,010 - Europe 220 225 + 5 175 175 - 1,030 1,015 -15 Asia 10,465 10,815 + 350 730 730 - 1,460 1,455 -5 Other Regions 1,050 1,100 + 50 245 245 - 400 405 + 5 Total 12,220 12,620 + 400 3,685 3,690 + 5 6,165 6,165 - 71 FY18 Financial Forecasts (Consolidated)
Yen (billion)
FY17 FY18 Change Change from previous forecast Results Forecast Amount %
Sales revenue 13,999.2 15,050.0 + 1,050.8 + 7.5% + 550.0
Operating profit 840.7 745.0 - 95.7 - 11.4% + 20.0
Operating margin 6.0% 5.0% - 1.0pt -
Share of profit of investments accounted for using the equity 164.7 205.0 + 40.2 + 24.4% + 25.0 method Profit before income - 51.9 -5.2% + 55.0 taxes 1,006.9 955.0 Profit for the year attributable to owners of the 616.5 585.0 - 31.5 - 5.1% + 40.0 parent
Earnings per share *1 (Yen) attributable to owners of the parent 342.10 326.26 - 15.84 + 23.87 For *1, please refer to the footnote on page 43 Market average rates (Yen) 109 Yen down US Dollar 108 (1H 111 / Yen down by 1 yen 3Q 110 / 4Q 105 ) by 2 yen 72 FY18 Forecast: Change in Profit before Income Taxes
Yen (billion)
Profit before Income Taxes - 51.9 ( - 5.2 % )
Operating Profit - 95.7 ( - 11.4 % )
+ 75.0 - 57.0 - 54.0 + 89.0 Increase in Cost -11.0 - 84.0 1,006.9 Reduction, SG&A Increase in Currency Revenue, etc. R&D Effects - 53.7 + 40.2 + 3.5 955.0 model mix, Impact of Finance income etc. Pension Litigation Share of profit of and Accounting investments finance costs Treatment Settlement accounted for using the equity method
- JPY / USD +7.0 - USD / Others +7.5 (BRL, CAD, MXN) - JPY / Asian Currencies +9.5 Operating (INR, THB, VND, CNY, IDR) Operating Profit -Others -35.0 Profit 840.7 745.0
FY17 FY18 Revised Results Forecast 73 FY18 Forecast: Change in Profit before Income Taxes
Yen (billion)
Profit before Income Taxes + 55.0 ( + 6.1 % )
Operating Profit + 20.0 ( + 2.8 % )
Excl. currency effects and litigation settlement + 9.7 + 64.0 - 53.7 + 10.0 955.0 + 29.7 - - 20.0 + 25.0 900.0 - Finance income Revenue, Cost Increase in Currency Litigation Share of profit of and Reduction, SG&A R&D settlement investments finance costs model mix, etc. Effects accounted for etc. using the equity method
- JPY / USD + 38.5 - USD / Others +7.5 (BRL, CAD, MXN) - JPY / Asian Currencies + 13.5 Operating (INR, THB, VND, CNY, IDR) Operating Profit -Others +4.5 Profit 725.0 745.0
FY18 FY18 Previous Revised Forecast Forecast 74 FY18 Forecast: Capital Expenditures, Depreciation and R&D
* Capital expenditures as well as Depreciation and amotization n results and forecast aforementioned exclude investment in operating leases, finance leases and intangible assets. ** Research and development expenditures are research and development activity related costs incurred during the reporting period. In accordance with IFRS, a portion of research and development expenditures is recognized as an intangible asset and amortized over its estimated useful life. As such, this amount is not in conformity with "Research and development" on our Consolidated Statement of Income. Research and development expenditures aforementioned exclude decrease of 25.4 billion yen due to the impact of pension accounting treatment in FY17 2nd quarter. Capital Expenditures Depreciation R&D Expenditures 800 8% 800 8% 800 8%
600 6% 600 6% 600 6%
400 4% 400 4% 400 4%
200 2% 200 2% 200 2% US GAAP IFRS US GAAP IFRS US GAAP IFRS 0 0% 0 0% 0 0% FY11 12 13 14 15 16 17 18P FY11 12 13 14 15 16 17 FY11 12 13 14 15 16 17 18P Actual Amounts % against Sales 75 FY18 Shareholders’ return
（Yen）
Dividend per Share FY17 FY18 change (Expectation) 1st Quarter End 22 24 + 2 2nd Quarter End 22 24 + 2 3rd Quarter End 24 ( 24 ) ( - ) 4th Quarter End 24 ( 24 ) ( - ) Fiscal Year 92 ( 96 ) ( + 4 ) 【Acquisition of the Company’s Own Shares】 ・Total number of shares to be acquired : Up to 24 million shares (shares of common stock) (1.3% of total number of issued shares (excluding treasury stock)) ・Total amount of shares to be acquired : Up to 90 billion yen ・Period of acquisition: Starting on November 2, 2017 and ending on January 31, 2018 ・Method of acquisition: Market purchases on the Tokyo Stock Exchange 1.Purchases through the Tokyo Stock Exchange Trading Network Off-Auction Own Share Repurchase Trading System (ToSTNeT-3) 2.Market purchases based on the discretionary investment contracts regarding acquisition of own shares 76 Recent Shareholders’ Return Summary Trend
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Actual Actual Actual Actual Actual Actual Actual （Estimated） 1st Quarter End 12 15 19 20 22 22 22 24 2ndQuarter End 12 15 19 20 22 22 22 24 Dividend 3rd Quarter End 15 15 19 20 22 22 24 ( 24 ) （Yen） 4th Quarter End 15 15 19 22 22 22 24 ( 24 ) Fiscal Year 54 60 76 82 88 88 92 ( 96 ) Dividends ratio* 18.3% 51.1% 37.3% 25.7% 32.2% 46.0% 26.9% ( 29.4% ) （ ） Acquisition of the billion 25.0000000( 90 ) Company’s Own Shares （billion Acquisition ） Total Dividends Yen of the Company’s Dividend Ratio Own Shares 500 46.0% 37.3% 32.2% 26.9% 400 18.3% 25.7% 29.4% 51.1%
300 261.9
165.8 90 200 158.6 158.6 137.0 147.8 122.4 108.1 100 25 165.8 171.9 137.0 147.8 158.6 158.6 97.4 108.1 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 * US GAAP up to FY15 , IFRS from FY16 77 Caution with Respect to Forward-Looking Statements: This slide contains forward-looking statements about the performance of Honda, which are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and fluctuation of foreign exchange rates, as well as other factors detailed from time to time.
Accounting standards: Our consolidated financial statements are prepared in conformity with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB)
Notice on the Factors for Increases and Decreases in Income: With respect to the discussion above of the change in Operating profit, management has identified the factors set forth below and used what it believes to be a reasonable method to analyze the respective changes in such factors. Each of these factors is explained below. Management has analyzed changes in these factors at the levels of the Company and its material consolidated subsidiaries. (1)“Currency effects” consist of translation adjustments, which come from the translation of the currency of foreign subsidiaries’ financial statements into Japanese Yen, and foreign currency adjustments, which result from foreign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries which have been analyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL and Japanese Yen. (2) With respect to “Cost reduction, etc.”, management has analyzed cost reduction and effects of raw material cost fluctuations at the levels of the Company and its material foreign manufacturing subsidiaries in North America, Europe and other regions. (3) With respect to “Revenue, model mix, etc.”, management has analyzed changes in sales volume and in the mix of product models sold in major markets which have resulted in increases/decreases in profit, as well as certain other reasons for increases/decreases in sales revenue and cost of sales. (4) With respect to “Selling, General and Administrative expenses”, management has analyzed reasons for an increase/decrease in selling, general and administrative expenses from the previous fiscal year net of currency translation effects. (5) With respect to “Research and Development expenses”, management has analyzed reasons for an increase/decrease in research and development expenses from the previous fiscal year net of currency translation effects.
Unit sales: Motorcycle Business Honda Group Unit Sales is the total unit sales of completed products, including motorcycles, ATVs, and Side-by-Side of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. Automobile Business Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. Certain sales of automobiles that are financed with residual value type auto loans by our Japanese finance subsidiaries and sold through our consolidated subsidiaries are accounted for as operating leases in conformity with IFRS and are not included in consolidated sales revenue to the external customers in our Automobile business. Accordingly, they are not included in Consolidated Unit Sales, but are included in Honda Group Unit Sales of our Automobile business. Power Product Businesses Honda Group Unit Sales is the total unit sales of completed power products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed power products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed power products of Honda and its consolidated subsidiaries. In Power Product business, there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales since no affiliate and joint venture accounted for using the equity method was involved in the sale of Honda power products.
78