honda corporate update 2014...

Honda Corporate Update 2014 Autumn

ACURA TLX (US) 1

Honda FY2011 Rating Review

Honda Business Status

FY15 Financial Highlights

Motorcycle Operations

Automobile Operations


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)


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)


Difference

FY15OriginalForecast(Apr-25)


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)


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.






Business Strategy


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


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


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

**







Business Strategy


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







Business Strategy


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


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)


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%


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


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


FY15RevisedForecast


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 %)


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)


FY15RevisedForecast


FY15RevisedForecast


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


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

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