Honda Corporate Update - 2018 Summer · Honda Corporate Update ... City Utilization Image Civic 5D...
Transcript of Honda Corporate Update - 2018 Summer · Honda Corporate Update ... City Utilization Image Civic 5D...
Honda Corporate Update - 2018 Summer
Acura RDX(North America)
Business Status
Other Topics
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
2
Financial Highlights
70
80
90
100
110
120
130
183 203 199 178 196
177 192 182 171 267
461 280
153
501 374
4.2%
6.4%
2.9%
5.5%
6.6%
5.0%
3.4%
6.0%5.4%
4.6%
-1%
1%
3%
5%
7%
-200
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
FY2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(P)
PP & Others Finance Motorcycle Automobile O/P Margin
・Earthquake・Thai flood・Earthquake・Thai flood
2012
USD/JPY
¥107 forFY19
840
670
IFRSUS GAAP
Profit Structure Profile over Past Decade and FY19 Forecast
・Airbag Inflator Issue
・Airbag Inflator Issue
Yen (billion)
710
503
* Forecast as of July 31, 2018 3
*
231
569
363
544
833823
Motorcycles Automobiles Power Products
Unit (thousand)
4
6,262 6,290 6,345 5,199 5,375 5,285 19,554 20,545 20,850
+ 305( + 1.5 % )
+ 55( + 0.9 % )
- 90( - 1.7 % )
FY19PreviousForecast
FY19RevisedForecast
ChangeFY19
PreviousForecast
FY19RevisedForecast
ChangeFY19
PreviousForecast
FY19RevisedForecast
Change
Japan 190 190 - 690 690 - 300 300 -North
America 325 325 - 2,015 1,940 -75 3,055 3,055 -Europe 235 245 +10 185 175 -10 1,030 1,040 +10
Asia 18,545 18,855 +310 2,220 2,220 - 1,495 1,535 +40Other
Regions 1,250 1,235 -15 265 260 -5 410 415 +5Total 20,545 20,850 +305 5,375 5,285 -90 6,290 6,345 +55
Forecast: Honda Group Unit Sales
FY18Results
FY19PreviousForecast
FY19RevisedForecast
FY18Results
FY19PreviousForecast
FY19RevisedForecast
FY18Results
FY19PreviousForecast
FY19RevisedForecast
FY19PreviousForecast
FY19RevisedForecast
ChangeFY19
PreviousForecast
FY19RevisedForecast
ChangeFY19
PreviousForecast
FY19RevisedForecast
Change
Japan 190 190 - 620 620 - 300 300 -North
America 325 325 - 2,015 1,940 -75 3,055 3,055 -Europe 235 245 +10 185 175 -10 1,030 1,040 +10
Asia 11,560 11,780 +220 750 750 - 1,495 1,535 +40Other
Regions 1,250 1,235 -15 265 260 -5 410 415 +5Total 13,560 13,775 +215 3,835 3,745 -90 6,290 6,345 +55 5
Motorcycles Automobiles Power Products
Unit (thousand)
12,954 13,560 13,775
+ 215( + 1.6 % )
3,689 3,835 3,745
- 90( - 2.3 % )
6,262 6,290 6,345
+ 55( + 0.9 % )
Forecast: Consolidated Unit Sales
FY18Results
FY19PreviousForecast
FY19RevisedForecast
FY18Results
FY19PreviousForecast
FY19RevisedForecast
FY18Results
FY19PreviousForecast
FY19RevisedForecast
6
FY18 FY19Results Forecast amount %
Sales revenue 15,361.1 15,450.0 + 88.8 + 0.6% - 150.0
Operating profit 833.5 710.0 - 123.5 - 14.8% + 10.0
Operating margin 5.4% 4.6% - 0.8pt + 0.1pt
Share of profit of investments accounted for using the equity method 247.6 215.0 - 32.6 - 13.2% -
Profit before income taxes 1,114.9 930.0 - 184.9 - 16.6% + 10.0
Profit for the year attributable to owners of the parent 1,059.3 615.0 - 444.3 - 41.9% + 45.0
Earnings per share attributable to owners of the parent (Yen) 590.79 348.56 - 242.23 + 26.14
Market average rates (Yen) * Please refer to the footnotes on the last page
107( 1H 109 / 2H 105 )
Yen (billion)
Change Change frompreviousforecast
U.S. Dollar 111 Yen up by 4 yen Yen downby 2 yen
*
FY19 Financial Forecast (Consolidated)
7
833.5
710.0+ 65.5 - 50.0
+ 53.7 694.5
- 178.0
- 14.7
*1
Yen (billion)
-123.5 ( - 14.8 % )Operating Profit
760.0
Excluding real-term currency effects and impact of one-time issues
Operating profit + 65.5 ( + 9.4 % )
*2
・Raw material price increase
・Real-term profit increase
- 75.0
+ 140.5
*1 *2
*2
FY19 Forecast: Change in Operating Profit
Operating margin 4.6%
Operating margin 4.9%
Operating margin 4.5%
FY18Results
Operating margin5.4%
Real-termCurrencyEffects
LitigationSettlement
Restitutionincome
Profit change(excl. real-termcurrency effects
and one-time issues)
Impact of Mexico plant
flooding
(Including decreaseof unit sales
due to shutdown)
Weak Argentina peso is expected to cause inflationary impact of (-27.0) . This amount is deducted from“Currency Effects” to calculate “Real-term currency effects”.(Price changes as a result of inflationary impact is included in “Cost Reduction, etc.” above.)Litigation settlement and restitution income related to airbag inflator in FY18
FY19Forecast
【Purpose for the change】
Further improving the Company’s capital strategy
【Points of the change】
Goal: to maintain a shareholders’ return ratio of
approximately 30%
Goal: to realize a return ratio alone of approximately 30%
Acquisition of the Company’s own shares at a timing that it
deems optimal
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.
Change in the company’s shareholders’ return policy
8
9
Increase / Decreasefrom FY18
1st Quarter End 24 27 + 3
2nd Quarter End 24 (27) (+ 3)
3rd Quarter End 25 (27) (+ 2)
4th Quarter End 27 (27) ( - )
Fiscal Year 100 (108) (+ 8)
Dividend per Share FY18 FY19(Expectation)
(Yen)
Dividend
10
Recent Shareholders’ Return Summary TrendFY11
ActualFY12
ActualFY13
ActualFY14
ActualFY15
ActualFY16
ActualFY17
ActualFY18
ActualFY19
(Expectation)
Dividend(Yen)
1st Quarter End 12 15 19 20 22 22 22 24 27
2ndQuarter End 12 15 19 20 22 22 22 24 (27)
3rd Quarter End 15 15 19 20 22 22 24 25 (27)
4th Quarter End 15 15 19 22 22 22 24 27 (27)
Fiscal Year 54 60 76 82 88 88 92 100 (108)
Dividend ratio* 18.3% 51.1% 37.3% 25.7% 32.2% 46.0% 26.9% 25.1% (30.9%)Acquisition of the Company’s Own Shares 25.0 0 0 0 0 0 0 87.0 62.1
97.4 108.1137.0 147.8 158.6 158.6 165.8 179.0 190.3
25.0
87.1 62.1
122.4108.1
137.0 147.8 158.6 158.6 165.8
18.3% 51.1%37.3%
25.7% 32.2%46.0%
26.9% 25.1% 30.9%
0
100
200
300
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
252.4
**
266.1
** incl. impact of revaluation of DTA/DTL: 16.9%
**
(billion)
Acquisition of the Company’s Own Shares
TotalDividend Dividend Ratio
(billion Yen)
* US GAAP up to FY15 , IFRS from FY16
Business Status
Other Topics
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
11
Financial Highlights
12
Further enhance inter-regional coordination and collaboration andincrease the efficiency of our operations from a global perspective.
Inter-regional coordination and collaboration
Accord 10% Civic
16%
CR-V 14%
Vezel10%
Fit8%
Derivative models
Other
Global Models continue to be widely popular representingapprox. 70% of CY2017 global Honda unit sales
Global models: Accord, Civic, CR-V, Vezel/ HR-V and Fit/ Jazz
13
Accord- All-new Accord launched in October 2017 in N.A. to be followed by other markets
Civic- Underwent full model change in 2015 in N.A. and successfully launched in global market
- Shares commonized platform between sedan, coupe and hatchback
CR-V- All-new CR-V underwent full model change in 2016 in N.A.and global launch to be completed by 2018.
Vezel/ HR-V- Grew into strong model and became one of the global models since its launch in 2013
Accord
Civic
CR-V
Vezel/ HR-V
Fit/ Jazz
*Derivative models: City/Grace, Greiz and XR-V
Sharing of down-sized turbocharged engine at some trim levels
Focus onplatform and parts
commonality
Focus onplatform and parts
commonality
5.3milCY2017
Global models: Direction of Model Development
2013 2014 2015 2016 2017
Civic
CR-V
HR-V
Fit
Global Operation Reform• Concurrent development
in all six regions• Adoption of locally
optimized design
• Increase commonality of platform and parts (Civic, CR-V and Accord)
Further enhance electrification, autonomous driving and connectivity technologies.
Spearhead industry effort to realize a carbon-free and collision-free mobile society.
14
Accord
• Adopt Lead-Country Introduction Strategy(Clarification of which region is responsible for model development leadership and increase model development efficiency.)
• Introduction of modular strategies
• Introduce advanced platforms to accommodate electrification of powertrains
November
April
March
April
August
Civic Sedan CY2015 CY2016 CY2017 CY2018 CY2019
NorthAmerica
ASIA
China
Brazil
Europe
Japan
Global Model Introductions
September
CR-V (PE) CY2015 CY2016 CY2017 CY2018 CY2019
NorthAmerica
ASIA
Brazil
China
Europe
Japan
April
June
July
September
November
August
Civic Sedan
CR-V
15
16
Regional Models
Introduction of regional models has also been expanding in each region.
China: Brand differentiationbetween two Joint Ventures
North America: Light Truck models
Japan: Mini-vehiclesAsia: Meet demand in each country with affordable models
Crider UR-V
Avancier XR-V
Odyssey
Pilot
Ridgeline
BR-VMobilio
Brio
N-Box
N-One N-WGN
N-Box +
GAC Dongfeng
Amaze
China
Europe
Capacity increase to 5.7 milEstablish stable production structure leveraging regional capacity + mutual parts/model sharing
North America
South AmericaAsia
Japan
1.06 mil<Export>
Global Models& Electrified models 1.92 mil
200,000
Primarily Civic 5D production
150,000
1.13 mil
<Export> Acura, L/T models,
Accord & CR-V
930,000
<Export> • Strengthen mutual parts/model
sharing within Asia• Export to Africa
<Export> Leverage local cost benefit for
next markets (Africa)
Middle East and Africa
Jazz
Electrified models
CR-V
Accord & L/T models
Acura
10-20%for Other regions
80-90% for Local markets
Total Capacity
approx. 5.4 mil units(Since April 2017)
City
■ Utilization Image
Civic 5D
1,000
CR-V , HR-V(plan)
Civic
Flexible Global Production Infrastructure
(Units)
Clarity Series
17
Civic 5D
Mutually Complementary System for our Global Operations
Advance our six-region global operation structure through inter-regional cooperation and coordination
• Flexible production system complementary production allocation between regions • Supply Civic hatchback from the UK to North America and Japan• WR-V was developed mainly for South America but is now also sold in Asia.
18
1,066 1,066 1,066 816
1,923 1,923 1,9231,923
200 200 200 200
1,080 930 930 930
1,080+50
1,080+50
1,200+50 1,200
+50
151 151 151 151
Mar '16 Apr '17 Plan '19 Plan '22as of
Japan
NorthAmerica
Europe
Asia
China
Other
-1505,550 5,400
(Export only)
Global Production Capacity
(Export only)
5,270
Thailand -150
FY2017
Unit(thousand)
19
China Dongfeng
+120
Plan
5,520+120 -250
Japan Saitama
-250
BrazilSumare
-120Itirapina
+120
Plan
To be launched
Automobile New Model Introductions (main models only)
* 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.
Acura RDX: N.A.
Mar Apr May Jun Jul Aug Sep
Amaze: India
20
Oct
Already Launched in 2018
Nov Dec
Inspire: China(2018)
Insight: N.A.
N-VAN: Japan
Clarity PHEV: Japan
Everus EV: China(2018)
Automobile Operations by Regions
11,588 12,777
14,491 15,600
16,522 17,479 17,550 17,230
0
5,000
10,000
15,000
20,000
CY10 11 12 13 14 15 16 17
Passenger CarsLight Trucks
1,259 1,147
1,423 1,525 1,541 1,587 1,638 1,641
0
500
1,000
1,500
2,000
CY10 11 12 13 14 15 16 17
AcuraHonda Passenger CarsHonda Light Trucks
4,601 4,753 5,211
5,692 5,297
4,937 5,077 5,195
0
2,500
5,000
7,500
FY11 12 13 14 15 16 17 18
Registered vehiclesMini vehicles
608 601
717
848 788
704 711 725
0
250
500
750
1,000
FY'11 12 13 14 15 16 17 18
Registered vehiclesMini vehicles
21
<Industry>
<Honda>
United StatesJapan<Industry>
<Honda>
Unit(thousands)
Source: Autodata
Source: Honda
Source: JAMA
Source: Honda
Increase production capacity of light truck models to meet industry demand
Improve capacity utilization through exporting global models
CR-V
RDX
■ Production Allocation
Indiana
OhioEast
LibertyPlant
20172016
CR-V
MDX
Pilot
Shift
Civic
MDX
GlobalSource CivicExport to N.A.
Alabama
Pilot
Global Source
Civic
Ridgeline Odyssey
Odyssey
Ridgeline
Alabama
ProductionPlant
■ As of the end of 2017
Indiana
CR-V
Civic
MexicoEl Salto
CR-V
HR-V
Shift
Ohio(East Liberty)
RDX
CR-V
MDX
Model Allocation: North America
22
Split
Indiana
RDX
■ Production Allocation
Indiana
OhioEast
LibertyPlant
20192018
CR-V
Civic
ProductionPlant
CR-VCivic
CR-V
MDX
Model Allocation: North America
MDX
AccordOhio
MarysvillePlant
CR-V
CR-V
Insight Brand-New
Insight
Accord
OhioEast
Liberty Marysville
CR-V
RDX
TLX / ILX
CanadaOntario
Civic
CR-V
TLX
23
652 622 599
757 793
1,010
1,256
1,458
0
500
1,000
1,500
CY10 11 12 13 14 15 16 17
Acura SUVMPV Sedan
※2008-2014 Wholesale2015-2016 Retail
Automobile Operations by Regions
24
China
<Honda>
13,757 14,473 15,495 17,929
19,701 21,146
24,378 24,719
0
10,000
20,000
30,000
CY10 11 12 13 14 15 16 17
Minivan SUVMPV Sedan
Unit(thousands)
(excluding commercial vehicles)<Industry>
Source: Honda
Source: Honda
Further expand sister model strategy.
<Industry>
<Honda>
Asia
4,493 4,796
5,696 5,748 5,477 5,464 5,478 5,965
0
4,000
8,000
CY10 11 12 13 14 15 16 17
Malaysia ThailandIndonesia PhilippinesIndia
297 227
356
474 524
587 578 629
0
250
500
750
CY10 11 12 13 14 15 16 17
Malaysia ThailandIndonesia PhilippinesIndia
Source: Honda
Source: Honda
(Five main markets in Asia)* India: excluding commercial
vehicles and pickups
Introduce new models to meet specific market needs in each Asian market.
Sedan(4D/5D) SUV MPV
D
GAC
Dongfeng
C
GAC
Dongfeng
B
GAC
Dongfeng
By utilizing common platforms and strengthening local procurement and R&D functions, successive launch of cost competitive models being realized.
Accord(May 2018)
JadeCrider
Odyssey
Spirior
Gienia
Segment
Fit City Vezel
XR-V
CR-V (July 2017)
Elysion
Greiz
UR-V(Mar 2017)
Civic
Avancier
Regional Models: China
25
Two joint ventures offer different model types
consistent with their respective brand image
Inspire(Planned in 2018)
Automobile Operations by Regions
26
Brazil
<Honda>
3,329 3,426 3,634 3,580
3,333
2,481 1,989 2,176
0
2,500
5,000
CY10 11 12 13 14 15 16 17
126
93
135 139 138 153
123 131
0
100
200
CY10 11 12 13 14 15 16 17
Unit(thousands)
<Industry>
Source: Honda
Source: ANFAVEA
(Main market in Other Region)* excluding trucks
Improve Forex toughness by increasing local procurement and localization of development.
<Industry>
<Honda>
Europe (EU+EFTA)
13,743 13,542 12,452
12,240 12,913 14,095
15,132 15,632
0
5,000
10,000
15,000
20,000
CY10 11 12 13 14 15 16 17
187 150 141 140 133 132 138
120
0
100
200
300
400
CY10 11 12 13 14 15 16 17
(excluding commercial vehicles)
(EU and EFTA)
Source: ACEA / Honda
Source: ACEA / Honda
U.K. has been designated to serve asglobal supply base of the Civic Series.
Roadmap for Environmental Technologies
2010 2020 2030
DI engineCVT / DCT
Turbo engine
2000
(CO
2(g/
km)
0
Global expansion
Global expansion
Technologies to increase electrical
efficiency
Technologies to increase thermal
efficiency
ZEROemissions technology
27
2015
Clarity BEV (2017)
Clarity PHEV(2017)
Clarity Fuel Cell(2016)
Accord PHEV(2013)
FCX Clarity(2008)
FCX(2002)
Strive to electrify two-thirds of all vehicles we sell globally by 2030
CR-V HEV(2017)
BEV@China
CY2018
Clarity Plug-inHybrid@Japan
CY2019
Urban EV@Europe
CY2020
Urban EV@Japan
NEW FCV
FCV
CR-V Hybrid@Japan, Europe
InsightHybrid@NA
ACCORDHybrid@NA
CDXHybrid@China
28
Honda’s Approach to Automobile Electrification
Leverage our strengths
Reinforce organization
・Optimize the technologies and experiences cultivated in HEV development for electrification expansion.
Electric motors・Established JV with Hitachi AMS for development, manufacture and sale of Honda’s state-of-the-art electric motors to combine our compact high-power technology with their mass-production expertise.
×
We expect that two-thirds of global automobile unit sales will be electrified by 2030.
Electrification = HEV + PHEV + BEV + FCV
We expect that two-thirds of global automobile unit sales will be electrified by 2030.
Electrification = HEV + PHEV + BEV + FCV
Cooperative control
Battery management
Key technologies we will focus on for Electrification
・Maximize cooperative control systems to fully extract and utilize the performance of the powertrain and related devices.
・Established “Electric Vehicle Development Division” which will oversee comprehensive vehicle development, including the powertrain and chassis, in order to further increase development speed.
・Maximize energy management performance and enhance heat management technologies to extend battery performance.
Roadmap for Environmental Technologies: Clarity Series
- Clarity Plug-in Hybrid earned a class-leading 47-mile EV driving range rating and340-mile extended range rating, launched in the U.S.(2017) and will be launched in Japan (2018).
- Clarity Electric, a spacious, comfortable and affordable sedan that suits their daily driving needs was launched in the U.S.(2017).
- Clarity Fuel Cell, only five-passenger FCV sedan in the industry, was launched in Japan in March 2016 and in the U.S. in December 2016, respectively.
“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 efficiently address cost and manufacturability
PHEV: Benefits of both Hybrids and BEVs
BEV:Affordable model for daily use
FCV: Ultimate zero-emissions vehicle
29
FY18 FY19 FY20 FY21
BEV GAC
Dongfeng
North America
Europe
Japan
PHEV North America
Japan
Regulation
ChinaSUV
SUV
Clarity(D-category)
Clarity(D-category)
Clarity(D-category)
30
Urban EV (B-category)
Urban EV
BEV/PHEV Model Introductions
New ZEV(U.S.) NEV(China)
Urban EV Concept Clarity Plug-In HybridEverus EV Concept
Toward realization of a collision-free mobile society
Expanding adoption of Honda SENSINGJapan: Make Honda SENSEING standard equipment on all new models to be introducedNorth America/ China/ Europe/ Other regions: Expanding application to all-new models
* For Acura vehicles, called “Acura Watch”
31
- 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
Automated Driving Roadmap
✔
✔
32
33
Honda’s approach to the new business environment
Waymo SenseTime
Softbank(Emotion Engine)
Kyoto University Boston University
(Information Security)
Softbank(5G Mobile Communication System)
Alibaba(Honda CONNECT)
Reachstar (China)
Grab (Asia)
- Motorcycles
Hitachi AMS(EV Motor)
Neusoft(China EV)
General Motors(EV Battery, FC Stack)
R&D Center X Honda Xcelerator
- Global expansion
ElectrificationArtificial
Intelligence
Car Sharing
New Organizational Structure
AutonomousDriving
Connectivity
Business Status
Other Topics
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
34
Financial Highlights
Overview of Motorcycle Business
35
15,061 15,494 17,008 17,592 17,055 17,661
19,554 20,850
5,000
10,000
15,000
20,000
FY2012 2013 2014 2015 2016 2017 2018 2019(P)
143 110177 192 182 171
267
10.6%
8.2%
10.5% 10.4% 10.1% 9.9%
13.1%
0
100
200
300
FY2012 2013 2014 2015 2016 2017 2018
*Operating profit and margin, and Unit sales until FY13 are based on US GAAP while FY14 and after are based on IFRS
Honda M/C Business = High Profitability + Stability + Growth Potential
Yen (billion)
Unit (thousand) Honda Global Unit Sales
Operating Profit and Margin
Indonesia
Malaysia
Thailand
VietnamIndia
PakistanChina
Japan
Bangladesh
Brazil
Argentine
PeruNigeria
Kenya
ItalyU.S.A
(ATV, S×S)Mexico
Philippines
28%
India19.2 mil
72%
Vietnam3.3 mil
75%
Indonesia5.9 mil
82%
Brazil0.8 mil
80%
Thailand1.8 mil
21%U.S.A (MC+ATV)
0.7 mil
44%
0.4 mil
16%Europe1.1 mil
Motorcycle productionat 35 plants in 21 countries
Motorcycle productionat 35 plants in 21 countries
Annual Production Capacity in India
5.8mil in 2016 6.4mil in 2017
*Market share excluding 50cc
Motorcycle Market Size and Honda Share (CY2017)
36
Thailand
Vietnam
Indonesia
India
Number of motorcycles units in operationPopulation
1,339
264
96
6940%
33%
25%
8%
Significant growth expected
Motorcycle Market Penetration in Asia (millions)
Source: Honda & IMF
0.2mil
Growth in Motorcycle Popularity
Next Markets Growing Markets Mature Markets
1,000
2,000
3,000
4,000
(USD)
India19.2 mil
Indonesia5.9mil
ThailandThailand
VietnamVietnam
Pakistan
Philippines
Bangladesh
Myanmar
GDP per capita 1.8mil
3.3mil
(CY2017)
Kenya
Nigeria
37Source: Honda & United NationsNote: penetration rate is as of 2017
18%
82%
In CY201133%
67%
In CY2017
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
CY2010 2011 2012 2013 2014 2015 2016 2017
Motorcycle Market Share Trend in India
■ Scooter Unit Sales of Honda / Competitors and Honda Share in Scooter Market
SC SC
MCMC
■ Fast Growing Segment Scooter / Motorcycle Sales Ratio (Industry)
0%
10%
20%
30%
40%
50%
60%
70%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
CY2010 2011 2012 2013 2014 2015 2016 2017
Competitors (Unit)
Honda (Unit)
Honda Share(%)
Honda
Honda is now No.2 in market share.
India
Company C
Company A
Company B
Company D
(Wholesale)
38
Hero Honda
1.6 1.6 1.6 1.6 1.6
1.2 1.2 1.2 1.2 1.2
1.2 1.8 1.8 1.8 2.4
1.21.2
CY2013 2014 2015 2016 2017
Expanded annual production capacity to 6.4 mil.
1st
2nd
3rd4.0mil
4.6mil
6.4mil
4.6mil
Capacity Expansion
4th
Manesar
Rajasthan
Karnataka
Gujarat
3rd
2nd
4th
1st
Product Line-up
110cc AT-ScooterActiva
110cc AT-ScooterDio
110cc MotorcycleDream Yuga
125cc MotorcycleCB Shine
India Motorcycle Operations
5.8mil
39
40
Electrification in Motorcycle and Mobile Battery
Introduce PCX ELECTRIC / PCX HYBRID in Japan (2018).
For future expansion of electric motorcycles/scooters: - Honda and Panasonic to Begin Research Experiment on Battery Sharing Using
Detachable Mobile Batteries and Electric Motorcycles in Indonesia
- 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.
PCX ELECTRIC Honda Mobile Power Pack
Honda Mobile Power Pack Exchanger
Business Status
Other Topics
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
41
Financial Highlights
42
2030 Vision
43
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
Business Status
Other Topics
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
44
Financial Highlights
Internal OutsideDirectors Total
Directors(excluding Audit and SupervisoryCommittee Members)
7 2 9
Directors(serving as Audit and SupervisoryCommittee Members)
2 3 5
Total 9 5 14
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 45
External Evaluation on Honda’s Stakeholder Engagement
46
In October 2017, CDP released the results of a survey on climate change initiatives and reduction of GHG emissions for 5,000 major companies worldwide.Honda received an A- rating, a score at the leadership level, in recognition of activities deemed to be best practices in environmental management in the CDP Japan 500 Climate Change Report 2017, one of those categories.CDP is an international NPO that provides a global system for measuring, disclosing, managing and sharing important environmental information from companies and cities.Company initiatives in environmental challenges are evaluated in the four stages of information disclosure, awareness, management and leadership.
Securing an A- on the CDP Japan 500 Climate Change Report 2017
Honda was selected for the third year running with a Bronze Class rating in the Automobiles sector of the Sustainability Award 2018 issued by Switzerland-based RobecoSAM. RobecoSAMevaluates sustainability of approximately 2,500 companies worldwide in terms of economic, environmental and social criteria. Companies deemed to be particularly outstanding in each sector are rated in categories of Gold Class, Silver Class and Bronze Class each year.
Selected for the Third Straight Year with a Bronze Class Rating in the RobecoSAM Sustainability Index
In September 2017, Honda was selected for the first time as a component of the Dow Jones Sustainability World Index after being ranked fifth in the global Automobiles sector in the annual review of the Dow Jones Sustainability Indices (DJSI), one of thekey benchmarks for socially responsible investing. At the same time, the Company was selected for the third consecutive year as a component of the Dow Jones Sustainability Asia/Pacific Index.The DJSI are investment indices run and offered cooperatively by U.S.-based S&P Dow Jones Indices and Switzerland-based RobecoSAM. The sustainability of the world’s leading companies are evaluated from three perspectives in terms of economic, environmental and social criteria and select companies that demonstrate overall excellence for inclusion in the indices.
Selected to the Dow Jones Sustainability World Index
Business Status
Other Topics
Automobile Business Operations
Motorcycle Business Operations
Business Strategy
Honda Corporate Update
2030 Vision
47
Financial Highlights
Unit (thousand)FY18 FY19
Honda Group Unit Sales
Consolidated Unit Sales
01002003004005006007008009001,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,2002,3002,4002,5002,6002,7002,8002,9003,0003,1003,2003,3003,4003,5003,6003,7003,8003,9004,0004,1004,2004,3004,4004,5004,6004,7004,8004,9005,0005,1005,2005,3005,4005,5005,6005,700
0100200300400500600700800900
1,0001,1001,2001,3001,400
0100200300400500600700800900
1,0001,1001,2001,3001,4001,5001,6001,7001,8001,900
01002003004005006007008009001,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,2002,3002,4002,5002,6002,7002,8002,9003,0003,1003,2003,3003,4003,5003,6003,7003,8003,9004,000
0
100
200
300
400
500
600
700
800
900
1,000
0100200300400500600700800900
1,0001,1001,2001,3001,4001,5001,6001,7001,8001,900
4,6995,352 1,267 1,305
1,331 1,341
3,2453,615 900 952
1,331 1,341
FY18 FY19 Change
Motorcycles 4,699 5,352 +13.9%
Automobiles 1,267 1,305 +3.0%
Power Products 1,331 1,341 +0.8%
FY18 FY19 Change
Motorcycles 3,245 3,615 +11.4%
Automobiles 900 952 +5.8%
Power Products 1,331 1,341 +0.8%
Honda GroupUnit Sales
1Q Results (3 Months)
ConsolidatedUnit Sales
1Q Results (3 Months)
(thousand)
(thousand)
48
FY19 1st Quarter Unit Sales
Motorcycles Automobiles Power Products
Motorcycles Automobiles Power Products
Honda Group Unit Sales・Increase in motorcycle unit sales due mainly to sales growth in Indonesia, India and Vietnam・Increase in automobile unit sales due mainly to sales growth in the U.S. and Japan
Operating MarginFY18FY19
49
7.3%
4.1%
7.2%
3.2%
7.4%
0%
2%
4%
6%
8%
10%
第1四半期 第2四半期 第3四半期 第4四半期
FY18 FY19 Change
Sales revenue 3,713.0 4,024.1 +8.4%
Operating profit 269.2 299.3 +11.2%
Operating margin 7.3% 7.4% +0.1pt Share of profit of investments accounted for using the equity method 52.9 54.3 +2.6%
Profit before income taxes 335.0 358.2 +6.9% Profit for the period attributable to owners of the parent 207.3 244.3 +17.8% Earnings per share attributable to owners of the parent (Yen) 115.04 137.75 +22.71
Market average rates (Yen) * Please refer to the footnotes on the last page
U.S. Dollar 111 109 Yen up by 2 yen
Operating Profit Yen (billion)
Financial Results Yen (billion)
1Q Results (3 Months)
*
269.2
152.9
284.5
126.8
299.3
第1四半期 第2四半期 第3四半期 第4四半期
FY18FY19
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY19 1st Quarter Financial Results (Consolidated)
(excl. litigation settlement 5.5%)
Financial Summary
Sales revenue increased by 8.4% primarily due to sales increases in all business operations.
Operating profit increased by 11.2% due primarily to the positive impact from revenue and model mix and a decrease in SG&A expenses.
50
4,699 5,238 4,870 4,747 5,352
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
+ 653( + 13.9 % )
<Asia>・Increased sales in Indonesia, India and Vietnam
Activa(India)
1Q 2Q 3Q 4Q 1QFY19
Japan 42 42 42 41 49North
America 80 83 69 81 72
Europe 81 53 39 61 80
Asia 4,219 4,804 4,437 4,260 4,840Other
Regions 277 256 283 304 311
Total 4,699 5,238 4,870 4,747 5,352
FY18
Unit (thousand)
Motorcycles - Honda Group Unit Sales(Motorcycles, All-Terrain Vehicles, Side-by-Side etc.)
51
1,267 1,292 1,344 1,296 1,305
0
500
1,000
1,500
+ 38( + 3.0 % )
Pilot(U.S.)
<North America>・Increased sales of Pilot in the U.S.<Japan>・Increased sales of N-BOX
1Q 2Q 3Q 4Q 1QFY19
Japan 157 167 174 198 162North
America 481 452 491 478 518
Europe 42 43 42 56 42
Asia 523 570 578 495 520Other
Regions 64 60 59 69 63
Total 1,267 1,292 1,344 1,296 1,305
FY18
Automobiles - Honda Group Unit Sales
Unit (thousand)
52
Yen (billion)Profit before Income Taxes +23.2 ( + 6.9 % )
Operating Profit +30.1 ( + 11.2 % )
- Currency Effects -6.6 - Interest rate swap /currency swap -3.8 - Others +2.2
(Excluding currency effects + 55.8 )
- JPY / USD -14.0 - USD / Others (BRL, CAD, MXN) +1.0 - JPY / Asian Currencies (INR, THB, VND, CNY, IDR) +1.0 - Others -13.6
OperatingProfit 269.2
OperatingProfit 299.3
335.0+ 36.8
- 18.9
- 8.2+ 18.3
358.2+ 19.6
+ 1.3- 25.6
Change in Profit before Income Taxes <FY19 1st Qtr>
Revenue,model mix,
etc.
CostReduction,
etc.
SG&A R&DCurrencyEffects
Share of profit of investments
accountedfor using
the equity method
Finance income
and Finance
costs
FY18 1Q FY19 1Q
<Increase Factors>- Impact from sales
volume and model mix, etc.<Decrease Factors>- Impact of Mexico plant
flooding, etc.
Unit (thousand) FY19
Yen (billion) 1Q 2Q 3Q 4Q 1QHonda Group
Unit Sales 4,699 5,238 4,870 4,747 5,352(Consolidated
Unit Sales) (3,245) (3,446) (3,096) (3,167) (3,615)
Sales Revenue 508.5 510.1 499.1 520.9 554.9
Yen (billion) Operating Profit Operating Margin
FY18
78.8 68.5 64.8 54.892.1
15.5%13.4% 13.0%
10.5%
16.6%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
( + 9.1 % )+ 46.3 (Currency effect - 17.1)
<Increase Factors>・Positive impact from sales volume
and model mix, etc.
1Q 2Q 3Q 4Q 1Q
FY19FY18
( + 16.9 % )
53
Motorcycle Business Sales Revenue /Operating Profit (Margin)
Unit (thousand) FY19
Yen (billion) 1Q 2Q 3Q 4Q 1QHonda Group
Unit Sales 1,267 1,292 1,344 1,296 1,305(Consolidated
Unit Sales) (900) (907) (932) (950) (952)
Sales Revenue 2,624.5 2,693.0 2,901.4 2,826.1 2,845.1
Yen (billion) Operating Profit Operating Margin
FY18
140.339.2
167.4
26.7
151.6
5.3%
1.5%
5.8%
0.9%
5.3%
-20%
-10%
0%
10%
01Q 2Q 3Q 4Q 1Q
FY19FY18
( + 8.4 % )
( + 8.1 % )
54
Automobile Business Sales Revenue/Operating Profit (Margin)
+ 220.6 (Currency effect - 27.6)
(excl. Litigationsettlement:3.4%)
<Increase Factors>・Decrease in SG&A・Positive impact from sales volume
and model mix etc.
0.1-2.0
1.5
-3.0-1.60.2%
-2.3%
1.7%
-2.8%-1.8%
-10%
-5%
0%
5%
10%
-10
-8
-6
-4
-2
0
2
4
6
8
10
1Q 2Q 3Q 4Q 1Q
FY19FY18
Unit (thousand) FY19
Yen (billion) 1Q 2Q 3Q 4Q 1QHonda Group *
Unit Sales 1,331 1,258 1,196 2,477 1,341(Consolidated
Unit Sales) (1,331) (1,258) (1,196) (2,477) (1,341)
Sales Revenue 83.1 87.8 93.4 106.7 87.8
Yen (billion) Operating Profit Operating Margin
FY18
(For reference)Operating profitfrom aircraft andaircraft engines
- 8.5 - 13.6 - 8.0 - 11.5 - 10.0*Honda Group Unit Sales and Consolidated Unit Sales include only power product units.
( + 5.7 % )
55
Power Product & Other Businesses Sales Revenue/Operating Profit (Margin)
+ 4.7 (Currency effect + 0.2)
<Decrease Factors>・Increased expenses in other
businesses operations etc.
49.8 47.2 50.7 48.2 57.1
9.2% 8.8% 9.6% 9.1% 9.6%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
0
20
40
60
80
100
120
FY19
Yen (billion) 1Q 2Q 3Q 4Q 1QTotal Assets of
Finance Subsidiaries 9,494.4 9,688.7 9,867.1 9,409.2 9,738.2Sales Revenue 539.6 539.5 527.1 530.8 593.1
Yen (billion) Operating Profit Operating Margin
FY18
( + 9.9 % )
1Q 2Q 3Q 4Q 1Q
FY19FY18
( + 14.7 % )
<Increase Factors>・Increase in operating lease revenues, etc.
56
Financial Services BusinessTotal Assets/Sales Revenue/Operating Profit (Margin)
+ 53.4 (Currency effect - 9.9)
21.5
101.5
6.6
97.8
14.714.7
110.3
7.0
122.5
22.6
-50
0
50
100
150
+ 25.2 %+ 8.6 % + 5.7 % + 53.7 %
Yen (billion) FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19Sales
Revenue 1,025.0 1,140.2 2,130.1 2,313.3 213.2 237.2 981.7 1,095.7 203.8 203.3
Operating Profit : Yen (billion)
1Q 1Q 1Q 1Q 1Q
Japan North America Europe Asia Other Regions
FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY191Q 1Q 1Q 1Q 1Q
- 31.7 %
57
Sales Revenue/Operating Profit (Margin) by Geographical Segment <FY19 1st Qtr>
58
From Asia 46.3 57.9 47.0 55.8 44.6
1Q 2Q 3Q 4Q 1Q
FY19FY18
52.9
82.2
54.5 57.9 54.3
0
20
40
60
80
100
+ 1.3( + 2.6 % )
Share of Profit of InvestmentsAccounted for Using the Equity Method
Yen (billion)
59
FY19 Forecast: Capital Expenditures, Depreciation and R&D
0%
2%
4%
6%
8%
0
200
400
600
800
FY12 13 14 15 16 17 18 19P0%
2%
4%
6%
8%
0
200
400
600
800
FY12 13 14 15 16 17 18 19P0%
2%
4%
6%
8%
0
200
400
600
800
FY12 13 14 15 16 17 18 19P
Capital Expenditures Depreciation
Amounts % against Sales
US GAAP IFRS US GAAP IFRS US GAAP IFRS
R&D Expenditures
FY18 FY19Results Forecast
Capital expenditures *1 433.8 480.0 +46.2 - Depreciation and amortization *1 467.3 455.0 -12.3 - Research and development expenditures *2 730.7 790.0 +59.2 -
Yen (billion)Change
Change fromprevious forecast
No changes have been made to the previous forecasts (on April 27, 2018)
*1 Capital expenditures as well as Depreciation and amortization in results and forecast aforementioned exclude investment in operating leases,finance leases and intangible assets.
*2 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 Statements of Income.
60
2,150.1 2,066.4
2,002.5 1,925.7
FY18 Three Months
+ 273.1 - 222.0 - 134.0 - 0.8
Cash & Cash equivalentsat beginning of FY19
Net Change - 83.6
Net Cash1,600.9
Net Cash1,678.1
Cash & Cash equivalentsat end of period
FY19 Three Months
+ 184.5 - 176.3 - 88.9 + 3.9
Net Cash1.446.4
Net Cash1,524.8
Net Change - 76.7
Free cash flow+ 51.1
Cash Flows of Non-financial Services Businesses
Yen (billion)
Effect of exchange rate changes
Cash flows fromoperating activities
Cash flows from investing activities
Cash flows from financing activities
Free cash flow+ 8.2
Effect of exchange rate changes
Cash flows fromoperating activities
Cash flows from investing activities Cash flows from
financing activities
Cash & Cash equivalentsat end of period
Cash & Cash equivalentsat beginning of FY18
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 inincreases/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 BusinessHonda 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 BusinessHonda 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 BusinessesHonda 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. 61