honda corporate update 2015...

Honda Corporate Update 2015 Spring

STEPWGN (Japan) 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 FY16 Forecast

O/P margin

4.8% 4.7%

6.3%5.5%

2.9%

6.5%

4.2%

1.9%

7.9%7.7%

-200

0

200

400

600

800

1,000

1,200

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16(P)-2%

0%

2%

4%

6%

8%

10%

12%

Automobile

MotorcycleFinance

FY12

・Japan Earthquake・Thai Flood

・ LehmanShock

3

USD/JPY

70

80

90

100

110

120

130

USD/JPY

(Billion)

GAAP Difference+25 bn

* Honda’s forecast for the year ending March 31, 2016, is based on IFRS.

*

FY16assumption

115/$

Profit Structure Profile over Past Decade and FY16 Forecast

Profit structure and Strong Recovery in FY13

USD/JPY

70

80

90

100

110

120

130

Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15

USD/JPY

FY16assumption

115/$

Negative currency impact of appreciation of USD against various currencies such as BRL, CAD and MXN, more than offsets positive impact from appreciation of JPY against USD.

4

FY3/15US GAAP

Yen (billions)

FY3/16(P)IFRS

Top-line growth andcost reduction

+227.3

SG&AExpenses

Consolidated Unit Sales Growth

Auto 3.56 → 3.75 mil (+5.1%)M/C 10.74 →11.08 mil (+3.1%)

Operating income685.0


FOREXEffects

- 85.0- 85.0- 44.0- 44.0- 45.2- 45.2 R&D

Expenses

5

Operating income,

excluding forex

effects

Despite negative impact from appreciation of USD against various currencies, sales growth and cost reduction will contribute to a rise in operating income

Rev/Mix +167.3

C/R +60.0

Current Fiscal Year Projection

+25.0

GAAPDifference*

* Honda’s forecast for the year ending March 31, 2016, is based on IFRS.Please refer to page 46 (Attachment).

FY3/16(P)US GAAP(Reference)


・JPY / USD + 69.0・USD / Others - 106.0

( BRL, CAD, MXN)・Others - 48.0






Business Strategy


6

(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

7

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)

82014

New 2.4L / 3.5L Direct Injectioni-VTEC Engine

TLX

New 1.5L Diesel Engine

(City and Honda MOBILIO,

India)

New 2.4L Direct Injectioni-VTEC EngineCR-V

9


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


10

Balances outstanding environmental performance with FUN

Realizes outstanding dynamic performance for motorsports enthusiasts

Civic, US.(Autumn 2015)

STEPWGN, JPN(Apr 2015)

Safety Leadership

11

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

ACURAILXMDXRDXRLXTLX

HONDAU.S.

CR-VJapan

Legend OdysseyJadeSTEPWGN

Introduction of such technologies will be expanded to other models in the near future.

1,000 1,000 1,000

1,720 1,920 1,920

300200 200

700960 960

890

8901,130150

150210

2013 2014 2015(P)

5,420

4,7605,120

New plant in Mexico(Feb 2014)

+200k

+360

Japan

NorthAmerica

Europe

Asia

China

Other

Dongfeng, China(Within 2015)

+120k

+300

+α +α +α

Brazil(Within 2015)

+60k

End of

+130kIndonesia(Jan 2014)

Capacity increase to 5.7 milGlobal capacity increased to 5.1 million units in CY2014

+120kIndia

(Feb 2014)

CY2014

12

CY2015

CKD production to start inOctober, 2015

CBU production to start inMarch, 2016

Current plan from 2016 onward

Thailand +120k

Reduced to single line(October 2014)

250k→150kUK

Global Automobile Production Capacity

Production at Guangqi, 3rd factory

starts in 2015

+120k

India +60kIncrease capacity at 2nd factory within 2016

(5, 030)(5,490)

(5,850)( ): Production facility capacity

(1,270) (1,270)

(300)

(1,270)

(300)

(270)

China

Europe

Capacity increase to 5.7 milEstablish stable production structure leveraging regional capacity + mutual parts/product sharing

13

Global Automobile Production

North America

South AmericaAsia

Japan (Units)

1 mil +α

<Export> Compact & Hybrid models

1.92 mil200,000

Dedicating to produce Civic and CR-V

150,000

890,000

<Export> Acura & L/T models

Fit & CR-V

960,000

<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

CR-V from Canada (Plan)

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

Fit, Accord HEV(Plan)

Civic 5D from UK (Plan)

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

Global Launch ScheduleHighest Volume in Core Model Line-up

14

Global Compact Series

FY14 FY15 FY16

Sep 2013

Dec 2013

Dec 2014

Jan 2014

May 2014

2015

May 2014

Oct / Dec 2014

May 2014

Sep 2014

Mar 2015

May 2015

Jun 2014

2015

2015

2015

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

CR-V

CivicAccord

4.45mil

940

716

613640

Fit / City / Vezel accounted for approx. 21% of Honda global unit sales in 2014

CY2014

Fit / City / Vezel

(‘000 units)

15

North America

0

10,000

20,000

CY06 07 08 09 10 11 12 13 14

Passenger CarsLight Trucks

Unit(thousands)

0

500

1,000

1,500

2,000

CY06 07 08 09 10 11 12 13 14

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- All new stylish CUV, HR-V debuted in May 2015- All new Pilot 8-passenger SUV to be launched in

summer 2015-All new Civic to be introduced in autumn 2015New 4-cylinder VTEC Turbo engines will be introducedContinue to invest to N.A auto manufacturing and R&D

operations to enhance the model competitiveness

Honda Topics

1,52515.600

1,54016.522

North America Automobile Operations (U.S.)

All-new HR-V (May 2015) All-new Pilot (Summer 2015)

NSX

All new Civic (Autumn 2015)*Coupe model showcased at New York International Auto Show

16

Strategies for U.S. Market

(Summer 2015)(May 2015)2015 CR-V MMC

(Oct 2014)

CR-V

2016 Civic (Autumn 2015)

Ridgeline & Odyssey(2016)

2016 Acura RDX MMC (Apr2015)

2016 ～2015CY2014

<N/A L/T capacities>

★ HR-V production from 2015

AllistonAllistonLine 2195

Line 2195

240240East LibertyEast

Liberty

LincolnLincoln

6060El SaltoEl Salto

340340

CR-V

CelayaCelaya

CR-V

CR-V

OdysseyRidge-linePilot

RDX

200200

MDX

MDX

HR-VFit

2016 Pilot HR-V

Odyssey

Full model change of Honda 3 core models

New technologies : Civic with new VTEC Turbo engine New cost structure : Increase P/F & Parts commonality / Global suppliers / Mexico sourced partsNew line-ups : Civic 5D hatch & TypeR

★ MDX dual-source production

All Honda L/Ts to be transformed in 2 years

New technologies : New powertrain & safety features Increase the flexibility for Light Truck productionNew line-ups : Brand new HR-V to be launched in Spring

More than 1 mil unit sales

Accord

will start in 2017

Strategies for U.S. Market

0

2,000

4,000

6,000

FY09 FY10 FY11 FY12 FY13 FY14 FY15

Mini vehicle Registered vehicle

Industry Demand Honda Unit Sales

0

250

500

750

1,000

FY09 FY10 FY11 FY12 FY13 FY14 FY15

Registered vehicle

Mini vehicle

Source: Honda

New Model Announced Launches/ FMCHonda Topics

Efficient enhancement of product line-up- Launch of Grace, sedan derivative of Global Compact series,

in Dec 2014- Launch of new mini vehicles , N box Slash in Dec. 2014 and

S660 in April 2015- Strengthen minivan line-up by introducing Jade and fully

remodeled StepWGN in April 2015- Strengthen sedan line-up: fully remodeled Legend (+ Grace)- Brand new Shuttle launched in May 2015

Source: JAMA

Japan Automobile Operations

N BOX (Dec 2011)N-One (Nov 2012)N-WGN (Nov 2014)

17

S660( Apr. 2015)

Legend(Jan 2015)

STEPWGN( Apr. 2015)

Jade( Feb. 2015)

N-Box Slash(Dec 2014)

Shuttle( May. 2015)

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

18

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

CY08 09 10 11 12 13 14

Malaysia Thailand

Indonesia Philippines

0

500

1,000

1,500

2,000

2,500

3,000

3,500

CY08 09 10 11 12 13 14

Philippines Indonesia

Thailand Malaysia

Source: Honda

Honda Unit SalesIndustry Demand

Source: Honda

※Retail Sales

Honda Topics 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 HondaStrong demand for HR-V which was launched in Jan. 2015

<Thailand>Fully remodeled City and Jazz and all- new Honda MOBILIO

launched in 2014Favorable sales of HR-V, which was launched in Nov. 2015

Asia Automobile Operations (ASEAN)

19

City, Thailand, Malaysia,

Indonesia, Philippines (Jan 2014~)

Honda MOBILIO,Indonesia, Thailand

(Jan 2014~)

Jazz,Thailand, Indonesia

(May 2014~)

HR-V, Thailand (Nov 2014), Indonesia (Jan 2015)

New Model / FMC Launches

Expansion of dealer network

Honda Topics

0

20

40

60

80

100

120

140

160

180

200

CY09 CY10 CY11 CY12 CY13 CY14

Honda Unit Sales in India

Source: Honda

※Retail Sales

0

500

1,000

1,500

2,000

2,500

3,000

FY10 FY11 FY12 FY13 FY14 FY15

Diesel Gasoline

Source: SIAM, Honda

India Industry Demand(excluding commercial vehicles)

-Amaze debut with new 1.5L diesel engine-City and Honda MOBILIO launched -Jazz (both petrol and diesel) to be introduced in July 2015

Earth Dreams Technology 1.5L i-DTEC Diesel Engine

Asia Automobile Operations (India)

20Honda MOBILIO

(July 2014)

Profitability of automobile operations in Indian market hasimproved due to:

Honda JAZZ(July 2015)

- introduction of FMC models- cultivation of untapped market segment with new models

equipped with diesel engines

Honda Unit Sales(Guangqi + Dongfeng + Acura)

Industry Demand(excluding commercial vehicles)

0

100

200

300

400

500

600

700

800

900

1,000

CY09 10 11 12 13 14

Accord OdysseyCity FitCR-V CivicCRIDER JadeOthers

009 10 11 12 13 14

Minivan

SUV

MPV

Sedan

Source: HondaSource: Marklines

21

Honda Topics New Model Launches/ FMC

Odyssey (Aug 2014) Vezel (Oct 2014) XR-V (Dec 2014)

Spirior (Nov 2014)

Asia Automobile Operations (China)

Introduce all-new City in late 2015 Showcased Concept D model at Auto Shanghai 2015

Will be launched by both Dongfeng Honda / Guangqi Honda Strengthen local development function to incorporate local

customer needs/tastes into models for Chinese market Increase local procurement to achieve further cost reduction Expand dealership network to inland regions where

economic growth is anticipated Start production of HEV vehicles in China in 2016 City (2015) Concept D (201X)

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(Dec 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.

CY2014 China Unit Sales by Platform

Segment

* the joint venture partners for concept B has not been announced yet**two different models based on Concept D will be introduced – one by each JV partner

New Model Strategy in China

22

City(2015 FMC)

Concept D**

*







Business Strategy


23

Motorcycle Market Size and Honda Share (CY2014)

64%

Brazil1.4 million

India

Thailand1.7 million

Vietnam2.7 million

Indonesia

16.0million

7.8million

79%

26%

81%

24

70%

(CY2013: 81%)

(CY2013: 68%)

(CY2013: 61%)

(CY2013: 81%)

(CY2013: 24%)

81%

ManesarRajasthan

Bangalore

Expansion Plan

3rd plant

2nd plant1st plant

Annual Capacity : 4.0 mil → 6.4 mil

Asia Motorcycle Operations (India)

110cc AT-ScooterActiva

（Feb. 2015 :FMC)

Product Line-upProduct Line-up

Expand capacity to meet growing demand Introduce 15 new models in 2015

-Strengthen 110cc model line-ups-Enhance product lineup in FUN area

Improve fuel economy of scooter models Prepare for exports to Next Markets

(Africa, etc.)

Honda TopicsHonda TopicsHonda introduced new 110cc Scooters and

Motorcycles into Indian Market

25

1.6 1.6 1.6 1.6

1.2 1.2 1.2 1.2

1.2 1.8 1.8 2.4

1.2

CY 2013 2014 2015(P) 2016(P)

1st

2nd

3rd 4.0mil4.6mil

6.4mil

4th plantGujarat 4.6mil

CD 110 Dream

(Jul. 2014)

CB Unicorn

(Jan. 2015)

CBR650F

(FY2016)

Asia Motorcycle Operations (Indonesia)

2009

Total270

2012

Total409

FY20141% 29%

–Sales Results and Respective Fuel Injection (FI) ratios

BEAT-Fi

2012 2014 2015(P)

5.3mil4.4mil

1st

2nd

3rd

4th

– Capacity Expansion

Applied FI to all models by end of FY 2014

26

100%

Total476

5.8mil

Annual production capacity of the 4th plant will be increased by 500,000 units within 2015, to start production of sporty models

1.0 1.0 1.01.0 1.0 1.0

2.22.22.4

1.1 1.6

2012 2014 2015 (P)







Business Strategy


27

28

10,000

11,000

12,000

13,000

5,000

5,500

6,000

8,000

9,000

10,000

11,000

3,000

3,200

3,400

3,600

11,842.4

12,646.7

0

200

400

600

800

1,000

750.2

606.8

0

200

400

600

800

1,000

574.1493.0

*1

Outline of FY15 Results Summary (Consolidated)

(Results Summary)Strong sales growth in Asia, cost down effects and positive currency effects were more than offset by lower unit sales in Japan due to severe market conditions, higher SG&A expenses, including quality related costs, as well as other factors, leading to a decline in operating income to 606.8 billion yen.

FY14 FY1512-month results FY14 and FY15

Consolidated Unit Sales Net Sales / Operating Income Yen（billion）

Net incomeMotorcycles Automobiles Net Sales Operating IncomePower ProductsFor *1, please refer to footnotes on page 35

10,7423,560 3,567

6,036 6,00110,343

Unit (thousand)

29

Honda GroupUnit Sales

12-Month Results

FY14 FY15 Change

Motorcycles 17,021 17,765 + 4.4%

Automobiles 4,323 4,364 + 0.9%

Power Products 6,036 6,001 - 0.6%

Consolidated Unit Sales

12-Month Results

FY14 FY15 Change

Motorcycles 10,343 10,742 + 3.9%

Automobiles 3,560 3,567 + 0.2%

Power Products 6,036 6,001 - 0.6%

13,000

15,000

17,000

19,000

4,000

4,250

4,500

5,000

5,500

6,000

6,000

8,000

10,000

12,000

3,000

3,200

3,400

3,600

3,800

17,02117,765

4,3234,364

6,036 6,001

10,34310,742

3,560 3,567

5,000

5,500

6,0006,036 6,001

FY15 Unit Sales Results

(thousand)

(thousand)

Honda Group Unit Sales FY14 FY15

Unit(thousand)

Power ProductsAutomobilesMotorcycles

Consolidated Unit Sales Unit(thousand)

Power ProductsAutomobilesMotorcycles

Honda Group Unit Sales-Increase in motorcycle unit sales in India, Indonesia and Vietnam more than offset decreases in S. America, Thailand -Increase in automobile unit sales due to the positive impact of new model introductions in Indonesia, India and China, which more than offset the negative impact of severe market conditions in Japan and Thailand

30

Income before Income Taxes - 84.1 ( - 11.5 % )

644.8- 82.5

+ 34.4 - 156.6

- 17.7+ 79.0 - 34.3

+ 93.6

Operating Income - 143.4 ( - 19.1 % )

Other Income& Expenses

+ 59.2

728.9

Operating Income

750.2

Operating Income

606.8

Change in Income before Income Taxes <FY15 Twelve Months>

Yen (billion)

Revenue,model mix,

etc.

Cost Reduction,etc.

Increase inSG&A Increase in

R&DCurrencyEffects

Unrealized gainsand losses related toderivative instruments(Attachment 2)

Other

FY14Twelve Months

FY15Twelve Months

<Increase Factors>- Cost reduction efforts, etc.<Decrease Factors>- Raw material price increase, - Increased depreciation costs, - Decreased production, etc.

<Decrease Factors>- Increased product warranty expenses, - Increased sales promotion expenses, etc.

<Decrease Factors>- Decrease in sales volume and model mix, - Increased sales incentives, - Changes of pension and post retirementprogram in North America vs. previous FY

- Increased expenses related to start of production at new factory, etc.

- Currency effects due to difference between average sales rates and transaction rates + 84.7

- Other + 8.8

*Please refer to Attachment 1 regarding currency effects

31

1,000

2,000

3,000

4,000

1,500

1,700

1,900

2,100

2,000

2,500

3,000

500

700

900

2,779 933 915 1,9902,057

3,097.23,353.7

0

50

100

150

200

250

165.2

67.1

2,730

0

50

100

150

200

250

170.5

68.0

*1

Outline of FY15 4th Quarter Results Summary (Consolidated)

(Results Summary)Strong sales growth in Asia and positive currency effects were more than offset by lower unit sales in Japan due to severe market conditions, higher SG&A expenses, including quality related costs, as well as other factors, leading to a decline in operating income to 67.1 billion yen.

Consolidated Unit Sales Net Sales / Operating Income

FY14 FY154th Quarter Results FY14 and FY15

Unit (thousand) Yen

(billion)

Motorcycles Automobiles Operating IncomePower products Net SalesFor *1, please refer to footnotes on page 35

Net Income

6.5%

5.9%

7.6%

5.3%

6.6%

5.5% 5.4%

2.0%0%

2%

4%

6%

8%

1Q 2Q 3Q 4Q

FY2014FY2015

184.9 171.4

228.5

165.2

198.0 164.4 177.2

67.1

0

50

100

150

200

250

1Q 2Q 3Q 4Q

FY14FY15

32

Financial ResultsYen (billion)

4Q Results ( 3 Months )FY14 FY15 Change

Net sales 3,097.2 3,353.7 + 8.3%

Operating income 165.2 67.1 - 59.4%

Operating margin 5.3% 2.0% - 3.3pt

Income before income taxes 174.7 72.0 - 58.8%

Equity in income of affiliates 37.3 36.6 - 1.9%

Net income 170.5 68.0 - 60.1%

EPS (Yen) 94.61 37.77 - 56.84

*1

US Dollar 103 119 Yen down by 16 yen

Euro 141 134 Yen up by 7 yen

*2

FY15 4th Quarter Financial Results (Consolidated)

(Financial Summary)- Net sales and other operating revenue increased by 8.3% mainly due to a sales increase inmotorcycle business operations as well as the positive impact of foreign exchange effects, despite a sales decline in automobile businessoperations.-Operating income decreased by 59.4% mostly due to a rise in SG&A expenses, including quality related costs, a decline in income associated with a negative impact on sales volume and model mix, as well as other factors, despite positive currency effects.

Average Rates (Yen)

Operating Income Yen (billion)

For *1 and *2, please refer to footnotes on page 35

Operating Margin

33

Income before Income Taxes - 102.6 ( - 58.8 % )

174.7

72.0

- 29.2

- 8.8- 94.4

- 1.5

+ 35.9 - 15.3 + 10.8

Operating Income - 98.1 ( - 59.4 % )Other Income& Expenses

- 4.5

Operating Income

165.2

Operating Income

67.1

Change in Income before Income Taxes <FY15 4th Qtr>

Yen (billion)

Revenue,model mix,

etc.Cost Reduction,

etc.

Increase inSG&A

Increase inR&D

CurrencyEffects

Unrealized gainsand losses related toderivative instruments

(Attachment 2)

Other

FY15 4QFY14 4Q*Please refer to Attachment 1 regarding currency effects

<Decrease Factors>- Decreased production, etc.

<Decrease Factors>- Increased sales promotion expenses, - Increased product warranty expenses, etc.

<Decrease Factors>- Decrease in sales volume and model mix, - Negative impact of U.S. West Coast

port strike, - Increased expenses related to start of

production at new factory, etc.

- Currency effects due to difference between average sales rates and transaction rates + 10.6

- Other + 0.1

34

+ 899.8 - 525.8

- 242.1 + 90.71,148.6

1,371.1

Net change + 222.5

+ 855.9 - 750.5

- 206.1 + 69.31,180.0 1,148.6

Free cash flow + 105.4

Net change - 31.4

Net income + 405.3Equity in income of affiliates

- 126.5Depreciation + 488.1Other + 132.8

Net Cash639.7

Net Cash583.2

Net Cash783.4

Net Cash583.2

Capital expenditures*1 - 770.0Other + 19.5

Dividends paid - 142.3Others - 63.7

Net income + 492.7Equity in income of affiliates

- 132.4Depreciation + 440.0Other + 55.6

Capital expenditures*1 - 719.1Other + 193.2

Dividends paid - 158.6Others - 83.5

Free cash flow+ 373.9

- Cash Flows of Non-financial Services Businesses -(Attachment 3)

Yen (billion)FY14 Twelve Months

FY15 Twelve Months

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 FY13

Cash & cash equivalents at end of FY14*1 This includes purchases of intangible assets

Cash & cash equivalents end of FY14

Cash & cash equivalents at end of FY15*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

Yen (billions)

Yen (billions)

Motorcycle Business

Automobile Business

Operations by Business Segment

25.4 22.8 25.2 42.5 45.5 34.5 42.9 43.9 38.1 53.5 45.648.129.130.031.328.015.89.35.6 32.844.9

38.9

25.8 36.8

8.9%

11.6%

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 3Q 4Q-3%

2%

7%

12%

17%

22%

76.496.370.9

-23.9

154.280.1 79.199.872.977.237.1100.6-16.9-29.1

-76.2

45.1

-21.3

13.7 110.4 24.0 148.9 86.3 68.4

-39.1

-0.9%

3.0%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 3Q 4Q-20%

-10%

0%

10%

20%

35

=Operating Income

=Operating Margin

=Operating Income

=Operating Margin

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

-4.5

-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

-3.8

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%

-4.8%

-4.7%

-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 3Q 4Q-15%

-10%

-5%

0%

5%

10%

38.2 38.1 40.9 44.6 46.5 42.7 48.8 51.8 48.2 51.0 50.039.644.647.454.647.253.647.146.8 35.953.6 42.8 37.5 40.8

22.2%

23.6%

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

2Q 3Q 4Q0%

10%

20%

30%

40%

36

=Operating Income

=Operating Margin

26.7 70.8 29.0 71.8 46.0 131.1 41.8 38.9 82.1

-4.8

82.224.589.675.8110.770.7110.747.67.1 82.218.5 47.7 74.8 67.5

3.1%

4.8%

2.2%

5.7%

6.8%

6.8%2.5%2.5%

8.9%7.4%

5.3%

9.7%

7.0%

10.8%

0.7%

2.5%

6.0%7.6%8.2%

4.4%3.0%2.5%

4.5%

-0.3%

-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 3Q 4Q-18%

-14%

-10%

-6%

-2%

2%

6%

10%

14%North America =Operating Income

=Operating Margin

62.1 59.8 42.0

-3.2-41.2-35.3-45.812.5

-4.6-25.7

10.0

-8.7

53.220.2

14.6

-21.8

60.9

30.0 40.7

46.659.362.1

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%4.4%

-0.3%

-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 3Q 4Q-24%

-18%

-12%

-6%

0%

6%

12%

Japan=Operating Income

=Operating Margin

Yen (billions)

Yen (billions)

Operations by Region

37

Europe

Asia excluding Japan and China

Yen (billions)

Yen (billions)

-13.5

-5.7

-9.7

-8.7

-1.4

14.920.4

-3.5

-7.5

-4.0

-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

-2.9%-2.5%

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 3Q 4Q-10%

-5%

0%

5%

10%

31.7 36.4 40.5 38.0 53.7 60.0 50.0 54.0 65.2 68.4 73.3 64.113.333.425.1 16.520.3 27.5 35.0 30.0 44.4 38.3 35.7 32.1

8.8%

6.9%

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

FY10 1Q 2Q 3Q 4Q FY11 1Q 2Q 3Q 4Q FY12 1Q 2Q 3Q 4Q FY13 1Q 2Q 3Q 4Q FY14 1Q 2Q 3Q 4Q FY15 1Q 2Q 3Q 4Q

0%

2%

4%

6%

8%

10%


38

=Operating Income

=Operating Margin

=Operating Income

=Operating Margin

10.5 2.6 10.2 5.4 18.6 7.9 12.9 4.5 9.1 13.0 3.912.212.523.015.7 5.6

-0.4

9.9 17.4 18.9 20.2 20.4 15.6 13.1

1.6%

5.0%5.5%

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 3Q 4Q-3%

0%

3%

6%

9%

12%

15%

Yen (billions)

Other Regions=Operating Income

=Operating Margin


39

40

FY15Results

FY16Forecast

FY16Forecast

（Reference）Change

U.S. GAAP IFRS U.S. GAAP Amount %

Sales revenue 12,646.7 14,500.0 13,850.0 + 1,203.2 + 9.5%

Operating profits 606.8 685.0 660.0 + 53.1 + 8.8%

(as a percentage of sales revenue) 4.8% 4.7% 4.8% -Share of profit from investments accounted for using the equity method - 135.0 - - -

Profit before income taxes 644.8 805.0 650.0 + 5.1 + 0.8%

Equity in income of affiliates 126.5 - 140.0 + 13.4 + 10.6%

Profit for year attributable to owners of the parent 493.0 525.0 525.0 + 31.9 + 6.5%

Honda’s forecast for the year ending March 31, 2016 is based on IFRS.

*2

FY16 Financial Forecast (Consolidated)

Note 1

Note 2

Note 3

Note 4EPS (Yen) 273.54 291.30 291.30 + 17.76

US Dollar (Yen) 110 115 115 Yen down by5 yen

Euro (Yen) 139 125 125 Yen up by14 yen

Note 1: “Net sales and other operating revenue” in U.S. GAAP is stated as “Sales revenue”

Note 2: “Equity in income of affiliates” in U.S. GAAP is stated as “Share of profit of investments accounted for under the equity method”

Note 3: “Net income attributable to Honda Motor Co., Ltd.” in U.S. GAAP is stated as “Profit for the year attributable to owners of the parent”

Note 4: “Basic net income attributable to Honda Motor Co., Ltd. Per common share” is stated as “Basic profit for the year attributable to owners of the parent

per common share”.

Average Rates (Yen)

Yen (billion)

Guidance: Units Sales by Business Segment

41

FY15Results

US GAAP

FY16Forecasts*

IFRS

FY16ForecastsUS GAAP

FY15Results

US GAAP

FY16Forecasts*

IFRS


FY15Results

US GAAP

FY16Forecasts*

IFRS


Japan 199 200 200 761 740 740 338 340 340North

America 285 325 325 1,746 1,890 1,890 2,698 2,880 2,880

Europe 192 190 190 167 160 160 1,093 1,090 1,090Asia 15,504 16,065 15,925 1,425 1,655 1,605 1,403 1,570 1,560

Other Region 1,585 1,445 1,455 265 270 260 469 480 480

Total 17,765 18,225 18,095 4,364 4,715 4,655 6,001 6,360 6,350

FY15Results

US GAAP

FY16Forecasts*

IFRS


FY15Results

US GAAP

FY16Forecasts*

IFRS


FY15Results

US GAAP

FY16Forecasts*

IFRS


Japan 199 200 200 752 690 735 338 340 340North

America 285 325 325 1,746 1,890 1,890 2,698 2,880 2,880

Europe 192 190 190 167 160 160 1,093 1,090 1,090Asia 8,481 8,915 8,910 637 705 705 1,403 1,570 1,560

Other Region 1,585 1,445 1,455 265 270 260 469 480 480

Total 10,742 11,075 11,080 3,567 3,715 3,750 6,001 6,360 6,350

AutomobilesMotorcycles Power ProductsUnit

(Thousand)Forecast: Honda Group Unit Sales

Forecast: Consolidated Unit Sales

* Honda’s forecast for the year ending March 31, 2016, is based on IFRS.

42

Income before Income taxes + 5.1 ( + 0.8 % )

644.8

805.0+ 167.3+ 60.0 - 45.2

- 44.0- 85.0

- 47.9

+ 155.0

Operating Income + 53.1 ( + 8.8 % )

FY15Results

U.S. GAAP

Operating Income

685.0

Operating Income

606.8

FY16Forecast

U.S. GAAP(Reference)

FY16Forecast

IFRS

Operating Income

660.0

650.0

・Operating Income + 25.0 ・Reclassification of Equity inincome of affiliates + 135.0・Others - 5.0

(Attachment 4)

・Unrealized gains and losses related to derivative instruments - 17.0

・Others - 30.9

・JPY / USD + 69.0・USD / Others - 106.0( BRL, CAD, MXN)・Others - 48.0

FY16 Forecast: Change in Income before Income Taxes

Yen (billion)

Revenue,model mix,

etc.

Cost Reduction, etc.

Increase inSG&A Increase in

R&DCurrency Effects

Other GAAP differences

43

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

Yen (billion)

44

Dividend per Share FY14 FY15Results

( Projection)

FY16(Expectation)

Increase/Decrease from

FY14

Increase/Decrease

fromFY15

1st Quarter End 20 22 + 2 ( 22 ) -

2nd Quarter End 20 22 + 2 ( 22 ) -

3rd Quarter End 20 22 + 2 ( 22 ) -

4th Quarter End 22 ( 22 ) - ( 22 ) -

Fiscal Year 82 ( 88 ) ( + 6 ) ( 88 ) -

Dividend(Yen)

45

Capitalized developmentcost

Post-employment benefits

Others(Operating income)

Reclassification of Equity in income

of affiliates

650.0

805.0+ 50.0 - 23.0 - 2.0

+ 135.0

Income beforeincome taxes

FY16 ForecastU.S. GAAP

(Reference)

Sales Revenue14,500.0

Net Sales13,850.0

Operating income + 25.0 ( + 3.8 % )

Income before income taxes + 155.0 ( + 23.8 % )

Operating Profit

685.0

Operating Income

660.0

0Disposal of equipment

held for rentalSales revenue / Cost of Sales

Gross basis

- 5.0

+ 650.0 ( + 4.7 % )

Disposal of equipment held for rentalSales revenue / Cost of Sales Gross basis + 630.0Others (Unification of the reporting period etc.) + 20.0

【 Major difference 】・ Unification of the reporting period・ Others

Yen (billion)

(Attachment)- Impact of Accounting Standard on FY16 Forecast (Consolidated) -

Profit beforeincome taxes

FY16 ForecastIFRS

Others

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, theEuro and other major currencies, as well as other factors detailed from time to time.Accounting standards: Our consolidated financial results for FY15 were prepared in conformity with U.S. Generally Accepted Accounting Principles and the Financial Forecast for FY16 was prepared in conformity with International Financial Reporting Standards.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 of foreignsubsidiaries’ 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, primarilyrelate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL and Japanese Yen.(2) With respect to “cost reduction and effects of raw material cost fluctuations”, management has analyzed cost reduction andeffects of raw material cost fluctuations at the levels of the Company and its material foreign manufacturing subsidiaries in NorthAmerica, Europe and other regions.(3) With respect to “changes in net sales and model mix”, management has analyzed changes in sales volume and in the mix ofproduct models sold in major markets which have resulted in increases/decreases in profit, as well as certain other reasons forincreases/decreases in net sales and cost of sales.(4) With respect to “selling, general and administrative expenses”, management has analyzed reasons for an increase/decrease inselling, 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 researchand 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 common share” in U.S. GAAP is stated as “Basic profit for the year attributable to owners of

the parent per common share” in IFRSEPS is calculated based on weighted average number of shares outstanding as shown below: - Fiscal Year FY14: 1,802,294,000 (approx), FY15: 1,802,289,000 (approx) (page 29)- 4th Quarter FY14: 1,802,291,000 (approx), FY15: 1,802,287,000 (approx) (page 32)- Fiscal Year FY15: 1,802,289,000 (approx), FY16: 1,802,286,000 (approx) (pages 40) 46

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