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Honda Corporate Update 2014 Autumn
ACURA TLX (US) 1
Honda FY2011 Rating Review
Honda Business Status
FY15 Financial Highlights
Motorcycle Operations
Automobile Operations
Honda FY2011 Rating Review
Business Strategy
Honda Corporate Update
2
Profit structure and Strong Recovery in FY13
Profit Structure Profile over Past Decade and FY15 Forecast
O/P margin
6.3% 6.0%5.5%
2.9%
6.5%4.2%
1.9%
7.9%7.7%8.8%
-200
0
200
400
600
800
1,000
1,200
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(P)-2%
0%
2%
4%
6%
8%
10%
12%
Automobile
MotorcycleFinance
FY12
・Japan Earthquake・Thai Flood
・ LehmanShock
3
(Billion)
USD/JPY
FY3/14
Yen (billions)
FY3/15(P)(as of Oct. 28)
Top-line growth andcost reduction
+116.7
SG&AExpenses
Consolidated Unit Sales Growth
Auto 3.56 → 3.76 mil (+5.6%)M/C 10.34 →10.85 mil (+4.9%)
Operating income770.0
Operating income750.2
FOREXEffects
- 1.0- 1.0
- 12.0- 12.0- 84.0- 84.0
R&DExpenses
FY14 FY15(P) ChangeCapital Expenditures 726.1 670.0 - 56.1Depreciation and Amortization 375.8 415.0 + 39.2R&D expenses 634.1 645.0 + 10.9 4
Operating income,
excluding forex
effects
Sales growth and cost reduction will contribute to a rise in operating income
Rev/Mix +73.7
C/R +43.0
Current Fiscal Year Projection
5
Current Fiscal Year Projection (Jul-29 vs. Oct-28)
FY15PreviousForecast(Jul-29)
FY15RevisedForecast(Oct-28)
Difference
FY15PreviousForecast(Jul-29)
FY15RevisedForecast(Oct-28)
Difference
Japan 230 220 - 10 990 890 - 100North
America 310 300 -10 1,810 1,810 0Europe 175 180 + 5 170 170 0
Asia 15,680 15,640 - 40 1,590 1,490 - 100Other
Region 1,685 1,610 - 75 270 260 - 10Total 18,080 17,950 - 130 4,830 4,620 - 210
18,080 17,950 4,830 4,620
- 130( - 0.7 %)
- 210( - 4.3 %)
(Automobiles)(Motorcycles)
Honda Group Unit Sales
Motorcycle : Reductions in Other Region (mainly Brazil), and Asia.
Automobile : Reductions in Japan and China.
770.0 770.0
±0
FOREXVol/Mix
CD SGA
+56.0 -52.0
-7.0 +3.0
Previous Forecast(Jul-29)
Revised Forecast(Oct-28)
Main Reasons for revision of forecast FOREX +56.0
Vol/Mix -52.0
4W : On the operating income line, a delay inNew/FMC model introductions, the impact of a higher consumption tax and increasedcompetition in the mini vehicle segment led to a decrease of 100,000 units in Japan
2W : Prolonged distressed financial environment in Brazil as well as changes in other countries ,led to a decrease in the sales plan in Other Region by 75,000 units.
Operating IncomeYen (billions)
Unit (thousands)
ROS6.0%
ROS6.0%
6
Current Fiscal Year Projection (Apr-25 vs. Oct-28)
FY15OriginalForecast(Apr-25)
FY15RevisedForecast(Oct-28)
Difference
FY15OriginalForecast(Apr-25)
FY15RevisedForecast(Oct-28)
Difference
Japan 230 220 - 10 990 890 - 100North
America 300 300 0 1,810 1,810 0Europe 175 180 + 5 170 170 0
Asia 15,765 15,640 - 125 1,590 1,490 - 100Other
Region 1,770 1,610 - 160 270 260 - 10Total 18,240 17,950 - 290 4,830 4,620 - 210
18,240 17,950 4,830 4,620
- 290( - 1.6 %)
- 210( - 4.3 %)
(Automobiles)(Motorcycles)
Honda Group Unit Sales
Motorcycle : Reductions in Other Region (mainly Brazil), and Asia.
Automobile : Reductions in Japan and China.
760.0770.0
+10.0
FOREXVol/Mix
CD SGA
+66.0 -52.0
-7.0 +3.0
Original Forecast(Apr-25)
Revised Forecast(Oct-28)
Operating IncomeYen (billions)
Unit (thousands)
ROS6.0%
ROS6.0%
Main Reasons for revision of forecast FOREX +66.0
Vol/Mix -52.0
4W : On the operating income line, a delay inNew/FMC model introductions, the impact of a higher consumption tax and increasedcompetition in the mini vehicle segment led to a decrease of 100,000 units in Japan
2W : Prolonged distressed financial environment in Brazil as well as changes in other countries ,led to a decrease in the sales plan in Other Region by 160,000 units.
Honda Business Status
FY15 Financial Highlights
Motorcycle Operations
Automobile Operations
Honda FY2011 Rating Review
Business Strategy
Honda Corporate Update
7
(Highly efficient and fun to drivepowertrain technologies)
(Highly efficient and fun to drivepowertrain technologies)
Global Core Models &
New Models for Uncultivated Markets
Global Core Models &
New Models for Uncultivated Markets
Global Operation Reform• Regional Concurrent Development• Locally Optimized Design/ Increase in Local Procurement
• Higher Production Efficiency
Global Operation Reform• Regional Concurrent Development• Locally Optimized Design/ Increase in Local Procurement
• Higher Production Efficiency
Sustainable & Profitable GrowthSustainable & Profitable Growth
8
Honda FY2011 Rating ReviewCore Strategies for Growth in Automobile Operations
Mini-vehicle
1.5L classengine
1.8L classengine
2.4L classengine
3.5L classV6 engine
Mini-vehicle
Compactvehicle
Mid-sizedvehicle
Honda introducing full line-up of new engines and transmissionsFull range of new gasoline engines Full range of new gasoline engines New CVT transmissions New CVT transmissions
Earth Dreams Technology
2012 2013CY2011
New 660cc
N Box
New 2.4L Direct Injection i-VTEC+ CVT
Accord
RLX
New 3.5L Direct Injection i-VTEC EngineMDX
New diesel engines
New diesel engines
New 1.6L Diesel Engine(Civic and CR-V, Europe)
New 1.5L Diesel Engine(Amaze, India)
New 1.5L Direct Injection Engine + CVT(Fit and Vezel, Japan)
1.5/1.6L classengines
2.4L 27 mpg (city)3.5L 21 mpg (city)
92014
New 2.4L / 3.5L Direct Injectioni-VTEC EngineTLX
New 1.5L Diesel Engine(City and Honda MOBILIO,
India)
10
Earth Dreams Technology
Fit/JazzHybrid
CR-Z
Fit Shuttle Hybrid Acura ILX Hybrid
Three-MotorSports Hybrid SH-AWD system for Acura models
INTEGRATEDMOTORASSIST
Accord Hybrid
Enhance Hybrid Line-up
Global Compact series
Plug-in Hybrid
2010 2011 2012
Intelligent Dual-Clutch Drive (i-DCD)One-Motor Hybrid system
Sports Hybrid Intelligent Multi-Mode Drive (i-MMD)
Two-Motor hybrid systemmid-to-large sized vehicles
NSX
Jan 2013
Freed / Spike Hybrid Civic Hybrid
RLX
Jul 2013 (Japan)
Fit Hybrid Vezel Hybrid
Earth Dreams Technology
11
Balances outstanding environmental performance with FUN
Realizes outstanding dynamic performance for motorsports enthusiasts
0 1 2 3 4 5 6 7 8
12
Honda leads the industry with seven TOP SAFETY PICK+ vehicles
The 2015 CR-V is alsoexpected to achieve
TOP SAFETY PICK+
Safety Leadership
(U.S.) 10 Honda or Acura vehicles have earned either Top Safety Pick or Top Safety Pick + ratings.
Side frame, upper frame and bulkhead efficientlyabsorb crash energy
Next Generation ACE™ Body Structure
Cabin strength increased through the use of hot stamp material and high tensile steel
Civic
Accord Coupe Accord Sedan
Acura MDX Acura RLX
Odyssey Acura TLXNote: as of Nov. 2014
Japanese
JapaneseJapanese
Japanese
Japanese
American
American
American
American
European
European
European
European
Korean
Safety Leadership
13
Honda SENSING AcuraWatch
A Suite of Safety and Driver Assistive Technologies
Honda is also at the forefront of the development of active safety or accident prevention technologies which benefit all road users - automobiles, motorcycles and pedestrians.
• Collision Mitigation Brake System (CMBS)• False Start Prevention Function• Road Departure Mitigation (RDM) system• Pedestrian Collision Mitigation Steering
System
Collision Avoidance
• Adaptive Cruise Control with Low Speed Follow
• Lane Keep Assist System (LKAS)• Lead Car Departure Notification System• Traffic Sign Recognition
• Multi-Angle Rearview Camera with View Mode Selection
• Parking Support Sensor System• Backing out of Parking Space
Support
• Blind Spot Intrusion Warning• Lane Watch
Collision Mitigation Brake System(CMBS)
Adaptive Cruise Controlwith Low Speed Follow
Lane Keep Assist System(LKAS)
Rear
SideForward
Preventive• Acura TLX (US, Aug 2014)• CR-V (US, Oct 2014)• Legend (JPN, Jan 2015)
Introduction of such technologies will be expanded to other models in the near future.
1,000 1,000 1,000
1,630 1,720 1,920
300 300200
625675
945
870890
890150150
150
2012 2013 2014
4,575 4,7355,105
New plant in Mexico(Feb 2014)
(Unit : 1,000)
Yorii Plant200k
(July 2013)
+200k
+370
Japan
NorthAmerica
Europe
Asia
China
Other
Dongfeng, China(Within 2013)
+20k
+160
+α +α +α
Alabama +40Indiana +50
(Jan 2013)
+90k
Malaysia(Oct 2013)
+50k
End of
+130kIndonesia(Jan 2014)
Capacity increase to 5.7 milGlobal capacity increased to 5.1 million units in CY2014
+120kIndia
(Feb 2014)
CY2013
14
Guangqi +120kDongfeng +120k
Brazil
CY2014
Single production shift (+60k/year) to start in 2015
CKD production to start inOctober, 2015
CBU production to start inMarch, 2016
Current plan from 2015 onward
China +240k
Thailand +120k
Reduced to single line(October 2014)
250k→150kUK
Global Automobile Production Capacity
to begin production in 2015
China
Europe
Capacity increase to 5.7 milEstablish stable production structure leveraging regional capacity + mutual parts/product sharing
15
Global Automobile Production
North America
South AmericaAsia
Japan(Units)
1 mil +α
<Export> Compact & Hybrid models 1.92 mil
200,000
Dedicating to produce Civic and CR-V
150,000
890,000
<Export> Acura & L/T models
945,000
<Export> • Strengthen mutual parts/production
sharing among Asia• Exporting to Africa
<Export> Utilizing the cost benefit for the
next market (Africa)
Middle East and Africa
Jazz(Plan)
Hybridmodels
CR-V
Acura & L/T models
Accord & L/T models
Acura
10-20%for Other regions
80-90% for Local markets
Total Capacity 5.1 mil units(end of CY2014)
Accord
Utilization Image
Roll Out of Honda’s Global Compact Series
(City / Grace)
(Fit / Jazz)
(HR-V / Vezel)
with best-in class Fun to Drive, Fuel Economy, Packaging and Safety
0
500
1000
1500
2000
2500
3000
3500
4000
4500
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Global Launch ScheduleHighest Volume in Core Model Line-up
CR-V
CivicAccord
4.27mil
753
741
691684
Fit / City accounted for about 18% of Honda global unit sales in 2013
CY2013
Fit / City(‘000 units)
16
FY14 FY15 FY16
Sep 13
Dec13
Dec14
Jan 14
May 14
2015
May 14
Oct / Nov 14
May 14
Sep 14
2015
2015
Jun 2014
2015
2015
Global Compact Series
City
City
Vezel
17
North America
0
10,000
20,000
CY06 07 08 09 10 11 12 13 14E
Passenger CarsLight Trucks
Unit(thousands)
0
500
1,000
1,500
2,000
CY06 07 08 09 10 11 12 13 14P
AcuraHonda Passenger CarsHonda Light Trucks
Source: Honda
Industry Demand Honda Unit SalesUnit
(thousands)
1,509 1,5511,428
10,429
1,150
New Model/FMC Launches
1,230
11,58812,778 1,147
14,4911,422
New model launches with brand-new powertrains- Fully remodeled Fit launched in June 2014 - All new Acura TLX launched in August 2014- Minor model change of CR-V debut in Oct 2014- All new stylish CUV, HR-V to be debut in winter/spring
Continue to invest to N.A auto manufacturing and R&D operations to enhance the model competitiveness
For Further Growth
1,52515.600
Fit (June 2014) Acura TLX (Aug 2014)
HR-V (FY2015)
1,550~16.400
CR-V MMC (Oct 2014)
Acura RLX Sport Hybrid (Sep 2014)
North America Automobile Operations (U.S.)
Source more partsfrom Mexico
18
New models to be launched with new technologies and competitive cost structure
HR-V (FY2015)
2015 CR-V (Oct 2014)
2015
201X
Strengthen SUV line-up
201X
Accord
CivicCR-V
Strengthening the model competitiveness
Fit (Jun 2014)
More than 1 mil unit sales from 3 models
Strengthening model competitivenessStrengthening model competitiveness
Strategies for improving model cost structureStrategies for improving model cost structure
Significant cost reduction for next-generation core models
by maximizing parts-commonality
Expand sourcing of parts from Mexico
Optimize model allocation to improve cost effectiveness
Enhance rolling cost reduction efforts from launch
New models with Earth Dreams Technology for each segment
Variety of SUV models to be launched in growing segments
Strategies for U.S. Market
Acura Strategy
19
Independent Organizational Structure Specific to Acura Business Operations Established
0
50
100
150
200
250
CY04 05 06 07 08 09 10 11 12 13 14
TL
Unit Sales in the U.S.
MDX
RDX
TSX
199 210 201180
145
106134 123
156
(‘000)
165
All-new Direct injected engines All-new 8DCT and 9AT transmissions Three-Motor Sports Hybrid SH-AWD
New Models with Advanced Technologies
Revitalize sedan line-up
Acura Strategy
0
2,000
4,000
6,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14
Mini vehicle Registered vehicle
Industry Demand Honda Unit Sales
0
250
500
750
1,000
FY08 FY09 FY10 FY11 FY12 FY13 FY14
Registered vehicle
Mini vehicle
Source: Honda
New Model Announced Launches/ FMCStrategy for Japan Market Efficient enhancement of product line-up- Launch of 3rd generation Fit and all-new SUV Vezel in 2013- Launch of Grace, sedan derivative of Global Compact series,
in Dec 2014- Launch of new mini vehicles , S660 and 5th model of the
“N” series- Strengthen minivan line-up by introducing “new value”
minivan and fully remodeled StepWGN- Strengthen sedan line-up: fully remodeled Legend (+ Grace)
Source: JAMA
Japan Automobile Operations
Fit(Sep 2013)
Odyssey(Oct 2013)
N-WGN(Nov 2013)
Vezel(Dec 2013)
N BOX (Dec 2011)N-One (Nov 2012)N-WGN (Nov 2014)
20
Grace(Dec 2014)
S660(2015)
Legend(Jan 2015) Three more models to
be announced launches in FY15
Japan Automobile Production Innovation
Honda Smart Ecological Paint
Yorii Plant
Started production in July 2013
Dedicated to the production of small-sized vehicles
Capacity : 250k units / year
Yorii Plant employs a number of innovative technologies and is a world-leading energy-saving plant.
• Reduction of the amount of paint materials• 40% reduction in the number of processes• 40% reduction of the amount of CO2 emitted during painting process
3-coat/2-bake(Honda Smart Ecological Paint)
Example of Innovative Technologies
A highly-functional painting technology that eliminates a middle coating process from a commonly used 4-coat/3-bake auto body painting process to realize a 3-coat/2-bake water-based painting process.
Image of test painting
4-coat/3-bake(Conventional painting process)
This new technology enables Honda to reduce the cost of paint materials, process layouts and equipment
21
Yorii is the first plant to use this technology and it has also been introduced in the new Mexican plant. Thailand, Brazil and China plants will be next.
0
50
100
150
200
250
300
350
400
CY07 08 09 10 11 12 13
Malaysia Thailand
Indonesia Philippines
0
500
1,000
1,500
2,000
2,500
3,000
3,500
CY07 08 09 10 11 12 13
Malaysia Thailand
Indonesia Philippines
Source: Honda
Honda Unit SalesIndustry Demand
Source: Honda
※Retail Sales
Strategy for ASEAN Market New Model Launches/ FMC<Indonesia>Honda MOBILIO launched in the low-price MPV segment
- the largest volume segment in Indonesia – which was previously uncultivated by HondaFully remodeled City and Jazz launchedHR-V is scheduled to be launched in 2015<Thailand>Fully remodeled City and Jazz and all- new Honda
MOBILIO launched in 2014
Brio Amaze, Thailand(Nov 2012)
Asia Automobile Operations (ASEAN)
Accord, Thailand(Mar 2013)
Brio Satya, Indonesia(Nov 2013)
22
City, Thailand, Malaysia,
Indonesia, Philippines (Jan 2014~)
Honda MOBILIO,Indonesia, Thailand
(Jan 2014~)
Jazz,Thailand, Indonesia
(May 2014~)
New Model / FMC Launches
Expansion of dealer network
Strategy for India Market
0
20
40
60
80
100
120
CY08 CY09 CY10 CY11 CY12 CY13
Honda Unit Sales in India
Source: Honda
※Retail Sales
0
500
1,000
1,500
2,000
2,500
3,000
FY09 FY10 FY11 FY12 FY13 FY14
Diesel Gasoline
Source: SIAM, Honda
Expansion of automobile production capacity- 2nd automobile factory started production in
February 2014
India Industry Demand(excluding commercial vehicles)
New models equipped with diesel engines launched- Amaze debut with new 1.5L diesel engine- City and Honda MOBILIO launched
Amaze(Apr 2013)
Earth Dreams Technology 1.5L i-DTEC Diesel Engine
Asia Automobile Operations (India)
23
City(Jan 2014)
Honda MOBILIO(July 2014)
Profitability of automobile operations in Indian market hasimproved due to introduction of FMC models
Honda Unit Sales(Guangqi + Dongfeng + Acura)
Industry Demand(excluding commercial vehicles)
0
100
200
300
400
500
600
700
800
900
1,000
CY08 09 10 11 12 13
Accord OdysseyCity FitCR-V CivicCRIDER JadeOthers
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
CY08 09 10 11 12 13
Minivan
SUV
MPV
Sedan
Source: HondaSource: J.P. Morgan
24
Strategy for China Market New Model Launches/ FMC
CRIDER (Jun 2013) Jade (Sep 2013) Accord (Sep 2013)
Fit (May 2014) Odyssey (Aug 2014) Vezel (Oct 2014)
XR-V (2014) Spirior (2014)
Asia Automobile Operations (China)
Introduce all-new Vezel and XR-V models into rapidly growing SUV segment (150% increase from CY12->13)Strengthen local development function to incorporate local
customer needs/tastes into models for Chinese market Increase local procurement to achieve further cost reductionExpand dealership network to inland regions where
economic growth is anticipated
SDN(4D/5D) SUV MUV
DGuangqi
Dongfeng
C
Guangqi
Dongfeng
B
Guangqi
Dongfeng
Accord(2013 FMC)
Jade (2013)
Crider(2013)
Civic CR-V
Fit(May 2014 FMC) Vezel
(Oct 2014)
Crosstour
Elysion (current model)
XR-V(in 2014)
Spirior(FMC in 2014)
Odyssey
(in 2015)
Concept B(in 2016)*
By utilizing common platforms and strengthening local procurement as well as local R&D functions, a number of cost competitive models will be launched
(Aug 2014 FMC)
Concept M
FitCity etc.
CivicCR-VJade etc.
Accord etc.
CY2013 China Unit Sales by Platform
City
Segment
* the joint venture partner for concept B has not been announced yet**two different models based on Concept M will be introduced – one by each JV partner
New Model Strategy in China
25
**
Honda FY2011 Rating Review
Honda Business Status
FY15 Financial Highlights
Motorcycle Operations
Automobile Operations
Honda FY2011 Rating Review
Business Strategy
Honda Corporate Update
26
Motorcycle Market Size and Honda Share (CY2013)
61%
Brazil1.5 million
India
Thailand1.9 million
Vietnam2.7 million
Indonesia
14.8million
7.7million
81%
24%
81%
27
68%
(CY2012: 76%)
(CY2012: 62%)
(CY2012: 58%)
(CY2012: 80%)
(CY2012: 18%)
81%
ManesarRajasthan
Bangalore
Expansion Plan
3rd plant
2nd plant1st plant
Annual Capacity : 4.0 mil → 5.8 mil
Asia Motorcycle Operations (India)
110cc
AT-Scooter
Activa
Product Line-upProduct Line-up
Dream Yuga
(Apr 2012)
Expand capacity to meet growing demand Strengthen 110cc model line-ups Improve fuel economy of scooter models Prepare for exports to Next Markets
(Africa, etc.)
Future Honda GrowthFuture Honda Growth
Dream Neo
(Apr 2013)
Honda introduced new 110cc Scooters andMotorcycles into Indian Market
28
1.6 1.6 1.6 1.6
1.2 1.2 1.2 1.2
1.2 1.8 1.8
1.2
1.8
CY 2013 2014(P) 2015(P) 2016(P)
1st
2nd
3rd
4.0mil4.6mil
5.8mil
4th plantGujarat
4.6mil
CD 110 Dream
(Jul 2014)
Asia Motorcycle Operations (Indonesia)
2009
Total270
2012
Total409
FY20141% 29%
–Sales Results and Respective Fuel Injection (FI) ratios
BeAT-Fi
4th plant started operations in 2014 with an annual production capacity of 1.1 million units
1.0 1.0
1.0 1.0
2.4 2.2
1.1
2012 2014(P)
5.3mil
4.4mil
1st
2nd
3rd
4th
– Capacity ExpansionApplied FI to all models by end of FY 2014
29
100%
Scoopy FI
Total476
Honda FY2011 Rating Review
Honda Business Status
FY15 Financial Highlights
Motorcycle Operations
Automobile Operations
Honda FY2011 Rating Review
Business Strategy
Honda Corporate Update
30
Results SummaryOperating income for the second quarter was 164.4 billion yen due mainly to- Increased competitiveness in the North American and
Japanese automobile markets- Positive impact of new automobile model introductions in Asia- Continuous cost reduction efforts
31
1,000
2,000
3,000
1,000
1,200
1,400
1,900
2,200
2,500
2,800
600
700
800
9002,743
869 8801,295 1,286
2,890.23,014.7
0
50
100
150
200
171.4 164.42,585
0
50
100
150
200
120.3141.8
Outline of FY15 2nd Quarter Results Summary (Consolidated)
2nd Quarter Results FY14 and FY15
Consolidated Unit Sales Net Sales / Operating IncomeUnit (thousand) Yen (billion)
FY14 FY15
Net Sales Operating IncomeMotorcycles Automobiles Power Products Net Income *1For *1, please refer to footnotes on page 49
32
Honda Group Unit Sales
2Q Results (3 Months)
FY14 FY15 Change
Motorcycles 4,216 4,581 + 8.7%
Automobiles 1,047 1,071 + 2.3%
Power Products 1,295 1,286 - 0.7%
Consolidated Unit Sales
2Q Results (3 Months)
FY14 FY15 Change
Motorcycles 2,585 2,743 + 6.1%
Automobiles 869 880 + 1.3%
Power Products 1,295 1,286 - 0.7%
3,000
3,500
4,000
4,500
5,000
800
900
1,000
1,100
1,000
1,100
1,200
1,300
2,000
2,200
2,400
2,600
2,800
700
800
900
4,216
4,5811,047
1,071 1,295 1,286
2,585
2,743 869 880
1,000
1,100
1,200
1,3001,295 1,286
FY15 2nd Quarter Unit Sales
(thousand)
(thousand)
Honda Group Unit Sales
Consolidated Unit Sales
Unit (thousand)
Unit (thousand)
Motorcycles Automobiles Power Products
Motorcycles Automobiles Power Products
FY14 F
Honda Group Unit Sales- Increase in motorcycle unit sales mainly in India and Indonesia- Increase in automobile unit sales due to the positive impact of new model introductions as well as the launch of fully
remodeled vehicles in Asia as well as other markets
6.5%5.9%
7.6%
5.3%
6.6%
5.5%
4%
6%
8%
1Q 2Q 3Q 4Q
FY14FY15
184.9 171.4
228.5
165.2
198.0
164.4
0
50
100
150
200
250
1Q 2Q 3Q 4Q
FY14FY15
33
Financial Results2Q Results (3 Months)
FY14 FY15 Change
Net Sales 2,890.2 3,014.7 + 4.3%
Operating Income 171.4 164.4 - 4.1%
Operating Margin 5.9% 5.5% - 0.4pt
Income before income taxes 165.5 179.8 + 8.6%
Equity in income of affiliates 31.6 22.7 - 28.2%
Net Income 120.3 141.8 + 17.9%
EPS (Yen) 66.79 78.73 + 11.94
US Dollar 99 104 Yen down by 5 yen
Euro 131 138 Yen down by 7 yen
FY15 2nd Quarter Financial Results (Consolidated)
Yen (billion)
Average Rates (Yen)
Operating Income
*2
*1
For *1 and *2, please refer to footnotes on page 49
Yen (billion) Operating Margin
Financial Summary- Net sales and other operating revenue increased by 4.3% mainly due to a rise in motorcycle and automobile unit sales as well as the positive impact of foreign exchange effects
- Operating income decreased by 4.1% mostly due to a decrease in income associated with changes in sales volume and model mix and increased R&D expenses, despite cost reduction efforts and positive FOREX effects
- Net income increased by 17.9%
34
Income before Income Taxes + 14.2 ( + 8.6 % )
165.5179.8
- 29.5+ 15.2
+ 6.9 - 9.7 + 10.0 - 13.9
+ 35.2
Operating Income - 7.0 ( - 4.1 % )Other Income& Expenses
+ 21.2
Operating Income
171.4
Operating Income
164.4
Change in Income before Income Taxes <FY15 2nd Qtr>
Yen (billion)
FY14 2Q FY15 2Q
Revenue,model mix,
etc.
Cost Reduction,etc.
Decrease inSG&A
Increase inR&D
CurrencyEffects OtherUnrealized gains
and losses related toderivative instruments
<Decrease Factors>- Decrease in sales volume and model mix,- Increased sales Incentives etc.
- Currency effects due to difference between average sales rates and transaction rates + 20.3
- Other + 14.9
35
+ 398.4 - 338.7
- 153.7+ 27.6
1,148.6 1,082.1
Net change - 66.4
+ 415.5 - 385.2
- 136.3+ 33.1
1,180.01,107.0
Free cash flow+ 30.2
Net change - 72.9
Net Cash639.7
Net Cash569.1
Net Cash539.6
Net Cash583.2
Capital expenditures*1 - 354.0Other - 31.2
Dividends paid - 70.2Others - 66.0
Net income + 207.2Equity in income of affiliates
- 63.4Depreciation + 215.9Other + 55.7
Free cash flow+ 59.6
- Cash Flows of Non-financial Services Businesses -(Attachment 3)
FY14 Six Months
FY15 Six Months
Cash & Cash equivalents at beginning of the FY14
Cash flows fromoperating activities
Cash flows from investing activities Cash flows from
financing activitiesEffect of exchange rate changes on
cash and cash equivalents
Cash & cash equivalents at end of the period
Yen (billion)
*1 This includes Purchases of intangible assets
Cash flows fromoperating activities
Cash flows from investing activities Cash flows from
financing activitiesEffect of exchange rate changes on
cash and cash equivalents
Cash & Cash equivalents at beginning of the FY15
Net income + 239.0Equity in income of affiliates
- 61.3Depreciation + 233.9Other - 13.2
Capital expenditures*1 - 348.3Other + 9.5
Dividends paid - 79.3Others - 77.4
*1 This includes Purchases of intangible assets
Cash & cash equivalents at end of the period
Yen (billions)
Yen (billions)
Motorcycle Business
Automobile Business
=Operating Income
=Operating Margin
=Operating Income
=Operating Margin
Operations by Business Segment
25.4 22.8 25.2 42.5 45.5 34.5 42.9 43.9 38.148.129.130.031.328.015.89.35.6 32.844.9
38.9
25.8 36.8
8.7%
10.8%9.6%
8.6%
10.9%10.7%
6.7%
10.6%
9.2%8.2%
13.6%
9.6%9.6%
3.4%
9.8%
8.4%
5.8%
2.2%
13.6%
10.9%
8.5%7.4%
-10
10
30
50
70
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q-3%
2%
7%
12%
17%
22%
70.9 96.3
154.2
80.179.1
99.8
72.977.2
37.1
100.6
-16.9-29.1
-76.2
45.1
-21.3
13.7 110.4 24.0 148.9 86.3 68.4
-39.1
3.4%
4.3%
3.1%6.5%
3.6%
4.4%
3.6%
3.7%
-1.2%
-2.2%
-6.5%
-1.4%
6.3%
1.4%
8.2%
0.9%
5.0%4.2%
-2.4%
2.1%
2.4%
5.3%
-100
0
100
200
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q-20%
-10%
0%
10%
20%
36
Yen (billions)
Yen (billions)
Power Product & Other Businesses
Financial Services Business
=Operating Income
=Operating Margin
*Honda Trading related out-of-period adjustment is not included
Operations by Business Segment
0.5
-2.8-2.2
-2.1-0.10.2
-2.0-5.9 -4.6 -2.9
-3.1
-0.4 -0.3 -2.0-2.3
0.1
0.1 1.3
-0.8
-7.4
2.3-1.0
0.1%
-3.2%
-0.2%
0.4%
-8.1%
-4.0%-3.7%
-0.5%
-6.4%
-0.4%
-2.8%-2.8%
0.1%
-2.7% -3.3%
-8.9%
1.7%-1.1%
-3.7%
3.1%
0.7%-1.4%
-20
0
20
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q-15%
-10%
-5%
0%
5%
10%
38.2 38.1 40.9 44.6 46.5 42.7 48.8 51.8 48.239.644.647.454.647.253.647.146.8 35.953.6 42.8 37.5 40.8
24.7%25.6%
27.4%
24.0%
27.0%26.6%26.4%
30.5%
27.4%
28.7%28.8%32.0%
32.9%
29.8%
35.8%
32.0%34.8%
29.4%
38.7%
33.2%
29.5%27.6%
0
20
40
60
80
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q0%
10%
20%
30%
40%
37
26.7 70.8 29.0 71.8 46.0 131.1 41.8 38.967.574.847.718.5 82.27.1 47.6 110.7 70.7 110.7 75.8 89.6 24.5 82.2
2.5%3.0% 4.4%
8.2%7.6%6.0%
2.5%
0.7%
10.8%
7.0%
9.7%
5.3%
7.4%8.9%
2.5% 2.5%6.8%
6.8%
5.7%
2.2%
4.8%
3.1%
-150
-100
-50
0
50
100
150
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q-18%
-14%
-10%
-6%
-2%
2%
6%
10%
14%North America =Operating Income
=Operating Margin
62.1 59.8
-41.2-35.3-45.8 12.5-4.6
-25.7
10.0
-8.7
53.2 20.214.6
-21.8
60.9
30.0 40.746.6 59.362.1 49.2 43.2
-4.8%-4.4%
-7.3%
-0.6%
1.2%
-1.0%
5.8%
-3.2%
2.2%1.7%
-2.4%
6.1%
3.2%1.2%
4.5%4.4%
6.4%4.9% 5.4%3.9%
6.3% 6.1%
-200
-150
-100
-50
0
50
100
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q-24%
-18%
-12%
-6%
0%
6%
12%
Japan=Operating Income
=Operating Margin
Yen (billions)
Yen (billions)
Operations by Region
38
Europe=Operating Income
=Operating Margin
Asia excluding Japan=Operating Income
=Operating Margin
Yen (billions)
Yen (billions)
-13.5
-9.7
-8.7
-1.4
14.920.4
-3.5
-7.5
-3.8
-4.0-6.1
1.81.7 1.8
-6.8 -7.6
4.0
-3.0
-9.4
-1.7
-7.6-8.7
6.1%
-4.0%
-0.7%
-3.2%
-2.8%
-4.0%
0.8%
-3.8%-3.7%
2.1%
0.9%-1.9%
-6.3%
-0.9%
-6.0%
1.1%
-5.2%
-2.5%
9.9%
-5.5%-7.7%
-4.8%
-15
-5
5
15
25
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q-10%
-5%
0%
5%
10%
31.7 36.4 40.5 38.0 53.7 60.0 50.0 54.0 65.2 68.413.333.425.1 16.520.3 27.5 35.0 30.0 44.4 38.3 35.7 32.1
8.7%8.9%
7.2%
4.2%
5.4%
6.7%6.3%
8.8%
7.0%
9.4%
7.4%8.5%
8.0%
6.8%
6.7%6.2%
4.2%
6.9%
5.7%
7.6%
8.6%
7.4%
0
10
20
30
40
50
60
70
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q0%
2%
4%
6%
8%
10%
Operations by Region
39
10.5 2.6 10.2 5.4 18.6 7.9 12.9 4.5 9.112.212.523.015.7 5.6
-0.4
9.9 17.4 18.9 20.2 20.4 15.6 13.1
5.0%
3.6%
2.2%3.2%
6.6%
2.2%
4.6%
1.2%
6.1%
9.4%
6.8%
-0.3%
7.2%7.5%
8.6%
4.4%
8.4%
6.6%
5.0% 4.6%
2.6%
5.6%
-10
0
10
20
30
40
50
60
70
FY101Q
2Q 3Q 4Q FY111Q
2Q 3Q 4Q FY121Q
2Q 3Q 4Q FY131Q
2Q 3Q 4Q FY141Q
2Q 3Q 4Q FY151Q
2Q-3%
0%
3%
6%
9%
12%
15%
Yen (billions)
Other Regions =Operating Income
=Operating Margin
Operations by Region
40
41
FY14Results
FY15Forecast
Change Change from previous forecastamount %
Net Sales 11,842.4 12,750.0 + 907.5 + 7.7% - 50.0
Operating Income 750.2 770.0 + 19.7 + 2.6% 0.0
Operating Margin 6.3% 6.0% - 0.3pt -
Income beforeIncome taxes 728.9 765.0 + 36.0 + 4.9% + 10.0
Equity in incomeof affiliates 132.4 120.0 - 12.4 - 9.4% - 35.0
Net Income 574.1 565.0 - 9.1 - 1.6% - 35.0
EPS (Yen) 318.54 313.49 - 5.05
US Dollar 100 104( 1H 103 / 2H 105 ) Yen down by 4 yen Yen down by
3 yen
Euro 136 137( 1H 139 / 2H 135 )
Yen down by 1 yen Yen down by1 yen
FY15 Financial Forecast (Consolidated)
*1
*2
For *1 and *2, please refer to footnotes on page 49Average Rates (Yen)
Yen (billion)
42
FY15PreviousForecast
FY15RevisedForecast
ChangeFY15
PreviousForecast
FY15RevisedForecast
ChangeFY15
PreviousForecast
FY15RevisedForecast
Change
Japan 230 220 - 10 990 890 - 100 325 335 + 10North
America 310 300 - 10 1,810 1,810 0 2,850 2,815 - 35Europe 175 180 + 5 170 170 0 1,070 1,075 + 5
Asia 15,680 15,640 - 40 1,590 1,490 - 100 1,595 1,480 - 115Other
Region 1,685 1,610 - 75 270 260 - 10 495 480 - 15Total 18,080 17,950 - 130 4,830 4,620 - 210 6,335 6,185 - 150
17,02118,080 17,950
4,3234,830 4,620
6,0366,335 6,185
- 130( - 0.7 %)
- 150( - 2.4 %)
- 210( - 4.3 %)
Forecast: Honda Group Unit Sales
AutomobilesMotorcycles Power Products
Unit(Thousand)
FY14 FY15PreviousForecast
FY15RevisedForecast
FY14 FY15PreviousForecast
FY15RevisedForecast
FY14 FY15PreviousForecast
FY15RevisedForecast
43
10,34310,915 10,850 3,560
3,870 3,760 6,036 6,335 6,185
- 65( - 0.6 %)
- 110( - 2.8 %)
FY15PreviousForecast
FY15RevisedForecast
ChangeFY15
PreviousForecast
FY15RevisedForecast
ChangeFY15
PreviousForecast
FY15RevisedForecast
Change
Japan 230 220 - 10 980 880 - 100 325 335 + 10North
America 310 300 - 10 1,810 1,810 0 2,850 2,815 - 35Europe 175 180 + 5 170 170 0 1,070 1,075 + 5
Asia 8,515 8,540 + 25 640 640 0 1,595 1,480 - 115Other
Region 1,685 1,610 - 75 270 260 - 10 495 480 - 15Total 10,915 10,850 - 65 3,870 3,760 - 110 6,335 6,185 - 150
- 150( - 2.4 %)
Forecast: Consolidated Unit Sales
AutomobilesMotorcycles Power Products
Unit(Thousand)
FY14 FY15PreviousForecast
FY15RevisedForecast
FY14 FY15PreviousForecast
FY15RevisedForecast
FY14 FY15PreviousForecast
FY15RevisedForecast
Guidance: Units Sales by Business Segment
44
FY14Results
FY15Forecasts Change FY14
ResultsFY15
Forecasts Change FY14Results
FY15Forecasts Change
Japan 226 220 - 6 818 890 + 72 314 335 + 21North
America 276 300 + 24 1,757 1,810 + 53 2,718 2,815 + 97Europe 166 180 + 14 169 170 + 1 1,032 1,075 + 43
Asia 14,536 15,640 + 1,104 1,286 1,490 + 204 1,500 1,480 - 20Other
Region 1,817 1,610 - 207 293 260 - 33 472 480 + 8Total 17,021 17,950 + 929 4,323 4,620 + 297 6,036 6,185 + 149
FY14Results
FY15Forecasts Change FY14
ResultsFY15
Forecasts Change FY14Results
FY15Forecasts Change
Japan 226 220 - 6 812 880 + 68 314 335 + 21North
America 276 300 + 24 1,757 1,810 + 53 2,718 2,815 + 97Europe 166 180 + 14 169 170 + 1 1,032 1,075 + 43
Asia 7,858 8,540 + 682 529 640 + 111 1,500 1,480 - 20Other
Region 1,817 1,610 - 207 293 260 - 33 472 480 + 8Total 10,343 10,850 + 507 3,560 3,760 + 200 6,036 6,185 + 149
AutomobilesMotorcycles Power ProductsUnit
(Thousand)Forecast: Honda Group Unit Sales
Forecast: Consolidated Unit Sales
45
Income before Income taxes + 36.0 ( + 4.9 % )
728.9 765.0+ 73.7+ 43.0 - 84.0
- 12.0 - 1.0 - 43.0 + 59.3
Operating Income + 19.7 ( + 2.6 % )Other Income & Expenses
+ 16.3
Operating Income
770.0
Operating Income
750.2
Forecast: Change in Income before Income Taxes
FY15RevisedForecast
FY14
Revenue,model mix,
etc.
Cost Reduction, etc. Increase in
SG&AIncrease in
R&DCurrency Effects Unrealized gains
and losses related toderivative
instruments
Other
Yen (billion)
755.0 765.0
Operating Income ±0 ( ± 0 % )Other Income & Expenses
+ 10.0
Income before Income taxes + 10.0 ( + 1.3 % )
Operating Income
770.0
Operating Income
770.0
+ 56.0- 7.0
46
- 52.0+ 3.0 ± 0
+ 10.0
FY15PreviousForecast
FY15RevisedForecast
Revenue,model mix,
etc.
Cost Reduction, etc.
Decrease inSG&A
R&DExpenses
Currency Effects
Unrealized gainsand losses related toderivative
instruments
Other
Yen (billion)
Forecast: Change in Income before Income Taxes
± 0
47
Forecast: Capital Expenditures, Depreciation, R&D Expenses
0%
2%
4%
6%
8%
0
200
400
600
800
0%
2%
4%
6%
8%
0
200
400
600
800
0%
2%
4%
6%
8%
0
200
400
600
800Capital Expenditures Depreciation / Amortization R&D
Actual Amounts (billion Yen)% against Net Sales
48
Dividend per Share FY14 FY15(Expectation)
Increase / Decrease from
FY14
1st Quarter End 20 22 + 2
2nd Quarter End 20 22 + 2
3rd Quarter End 20 ( 22 ) ( + 2 )
4th Quarter End 22 ( 22 ) ( ±0 )
Fiscal Year 82 ( 88 ) ( + 6 )
Dividend
(Yen)
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 foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time.Accounting standards: Our consolidated financial standards are prepared in conformity with U.S. generally accepted accounting principles.Notice on the Factors for Increases and Decreases in Income:With respect to the discussion above of the change in operating income, 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)“Foreign currency effects” consist of translation adjustments, which come from the translation of the currency offoreign subsidiaries’ financial statements into Japanese Yen, and foreign currency adjustments, which result fromforeign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries whichhave been analyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL andJapanese Yen.(2) With respect to “cost reduction and effects of raw material cost fluctuations”, management has analyzed costreduction and effects of raw material cost fluctuations at the levels of the Company and its material foreignmanufacturing subsidiaries in North America, Europe and other regions.(3) With respect to “changes in net sales and model mix”, management has analyzed changes in sales volume and in themix of product models sold in major markets which have resulted in increases/decreases in profit, as well as certainother reasons for increases/decreases in net sales and cost of sales.(4) With respect to “selling, general and administrative expenses”, management has analyzed reasons for anincrease/decrease in selling, general and administrative expenses from the previous fiscal year net of currencytranslation effects.(5) With respect to “research and development expenses”, management has analyzed reasons for an increase/decreasein research and development expenses from the previous fiscal year net of currency translation effects.*1 Net income attributable to Honda Motor Co., Ltd.*2 Basic net income attributable to Honda Motor Co., Ltd. per share
Basic net income attributable to Honda Motor Co., Ltd., per share is calculated based on weighted average number of shares outstanding as shown below: - 2nd Quarter FY14: 1,802,295,000 (approx), FY15: 1,802,289,000 (approx) (page 33)- Fiscal Year FY14: 1,802,294,000 (approx), FY15: 1,802,289,000 (approx) (page 41) 49
50
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