Honda Information Meeting 2012 Autumn. Honda FY2011 Rating Review

Transcription

1 Honda Information Meeting 212 Autumn Honda FY211 Rating Review 1 1

2 Honda Information Meeting Honda FY211 Rating Review Current Honda Business Business Strategy Automobile Business Motorcycle Business FY13b Q2 Financial Highlights 2

3 Profit Structure and Strong Recoveries including FY13 Forecast 14 Despite the Profit continued structure negative and Strong impact Recovery of the strong in FY13 yen, Honda forecasts a strong recovery in FY ,2 7 (billion) USD/JPY O/P margin 12% 1, % 6.2% 9.% 9.1% 7.4% 7.3% 8.8% 7.7% 7.9% 4.2% 6.5% Earthquake Flood 5.3% 1% 8% 6% Automobile Motorcycle FY FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 1.9% Finance FY12 2.9% 4% 2% % -2% 3

4 Honda Business Update Strong recovery of operating profit for FY13 Yen (billions) Top-line growth and cost reduction Unit Sales mil (33% increase) Operating income 231 FOREX impact approx. -45 R&D cost increase approx. -35 approx. 369 Operating income 52 FY12 FY13 (as of Oct. 29) 4

5 Honda Information Meeting Honda FY211 Rating Review Current Honda Business Business Strategy Automobile Business Motorcycle business FY13 Q2 Financial Highlights 5

6 Honda Automobile Business Global 4 pillar models form core of competitiveness and efficiency Unit: thousands Unit Sales of Honda s Global 4 Pillar Models CY Global 4 ratio % 535 Total 3,95 thousand units Others Fit/Jazz/City CR-V 1 Civic 5 Accord

7 Civic U.S. 4, Civic MMC within 212 to Improve Marketability 3, ( Sales unit s) Earthquake Big MMC 212 2, 1, May Jun Jul Aug Sep Oct Nov Dec Jan 12 Feb Mar April May Jun July Aug Sep Oct Nov Dec Europe Introduce New Diesel engine Asia New Civic launch in Asia including China China (Oct ) Thailand (May) Jan L New Diesel from 213 Lightweight (industry top-class) Reduces CO2 output by over 15% (95g/km) Annual Civic Sales in Asia 211 approx. approx. 17K 17K units units Indonesia (Jun) Taiwan (Jun) Vietnam (Jul) Malaysia (Jul) Pakistan (Sep) 212 7

8 CR-V がすごいという絵 CR-V 4, U.S. 3, CR-V Production increase in Canada from 213 Monthly record sales continue despite low inventory ( Sales unit ) 2, 6 days 1, Inventory 213 Model Jan 11 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 12 Feb Mar April May Jun July Aug Sep Oct Nov Dec Europe Asia New CR-V and New Diesel in Europe New CR-V launch in Asia including China Sep 212 Autumn 213 New 1.6L Diesel China (March) Annual CR-V Sales in Asia approx. approx. 24K 24K units units Thailand (Sep) Indonesia (Sep) Australia (Oct) Vietnam Malaysia The Philippines 212 8

9 Accord 9 th generation Accord Debut in Sep, 212 Class-leading fuel economy and innovative safety technology Innovative safety technology Forward Collision Warning (FCW) Lane Departure Warning (LDW) LaneWatch blind spot display Four all-new power trains -Earth Dreams 2.4L DOHC L4 DI engine with new CVT or 6MT 27 city /36 highway from $21,68-3.5L SOHC V6 engine with VCM (Variable Cylinder Management system), 6AT 21 city /34 highway from $3,7 -Two-motor gasoline-electric plug-in hybrid system from Beginning of 213 -Two-motor gasoline-electric hybrid system within 213 Accord PHEV 9

10 Fit / Jazz / City Fit / Jazz / City historical sales by region 1,, 8, 1st generation 2nd generation 6, 4, Overseas 2, Japan Next generation Fit FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 All-new Fit series will be introduced starting in 213 Fit City SUV Roll-out of Fit (Jazz), City and a new small SUV model within 2 years 1

11 Global Operation Reform Concurrent development in all six regions Japan, North America, South America, Europe, China, Asia Introduction of the same model in all regions Simultaneous large volume production Significant cost reduction through global sourcing Adoption of locally optimized design Improvement of production efficiency Respond to the voice of local customers Utilize more local suppliers Dedicating new plants to small-sized vehicles Yorii Plant in Japan ( July 213 ) Mexico factory ( Spring 214 ) Global operation reform to be implemented beginning with all-new Fit series 11

12 Honda Information Meeting Honda FY211 Rating Review Current Honda Business Business Strategy Automobile Business - Business expansion Motorcycle business FY13 Q2 Financial Highlights 12

13 Global Automobile Production Capacity (Unit : 1,) +44 5,85 5, +1 4, , , Other 4, k Increase capacity in in Dongfeng Honda, China k Increase capacity in in Dongfeng Honda, China k Increase capacity in in Guanqi Honda, China 1,1 75 China Asia 3, k In Malaysia k In Indonesia 3 Europe 2, +9k 1,63 1,63 1,72 Increase capacity at Alabama and Indiana plant +2k New plant in in Mexico starts-up in in 214 1,92 North America 1, End of Start-up 1, 1, of Yorii Plant 1, 1, +α +α +α +α Japan Capacity increase to 5 mil 13

14 Automobile Production in North America Capacity: 68k (MAP 44k / ELP 24k) Ohio Ohio Model Allocation New CR-V production from 212 MDX to shift to Alabama in 213 Canada Capacity: 39k Capacity Expansion New plant start-up in the spring of 214 with capacity of 2k units Capacity: Existing 6k / New 2k (Total 26k) Mexico Total Production Capacity Current 1.63mil 1.92mil in 214 More than 9% of the vehicles sold in the U.S. will be produced in North America in the coming years Production Increase Indiana Increase annual capacity by 5k in early 213 Model Allocation Capacity: 2k 25k Alabama MDX to be shifted from Canada in 213 Capacity: 3k 34k 14

15 Small vehicle strategy in Japan New Models Launch derivative models from 1 platform to enhance product lineup efficiency 1Platform N Box N Box+ 5 derivative models planned by 215 Sports model N Box Custom ( Dec 211 ) ( Jul 212 ) N One 214 ( Dec 211 ) ( Nov 212 ) Launch all-new Fit Series from 213 Fit City SUV 118 thousand cumulative sales in 1H FY13 N Box Custom No.1 sales in mini vehicle segment N Box N Box+ Total Sales of Mini vehicles Unit (thousands) % 356 FY12 FY13 15

16 Asia Grow through introduction of Fit series / Brio series Launch of diesel engine in India market (213~) Strengthen mutually complementary production structure Pakistan 5k Production Capacity 575K 765K (214~) Taiwan 3k Diesel Engine India (213~) India 12K MPV (213~) 1K Jazz (IMA) 24K 5KI Malaysia Thailand Indonesia Vietnam 1k Philippines 15k Civic Accord Fit Fit series Fit Brio series City SUV Freed 6K Thailand, Indonesia, India and Malaysia to efficiently produce and mutually complement lineups of unique products (such as IMA and MPV) between their respective countries. 2K (214~) Brio Sedan MPV 16

17 Honda Information Meeting Honda FY211 Rating Review Current Honda Business Business Strategy Automobile Business - Core technologies Motorcycle business FY13 Q2 Financial Highlights 17

18 Earth Dreams Technology Honda will introduce new engines and new transmissions into all categories Wide range of new gasoline engines New CVT transmissions 1.5L class engine 1.8L class engine 2.4L class engine 3.5L class V6 engine Minivehicle Minivehicle Compact vehicle Mid-sized vehicle New 2.4L Direct Injection + CVT New 66cc New 3.5L DI New L New L N Box Accord RLX CY ~ 18

19 Earth Dreams Technology Enhance Hybrid Line-up Next-generation IMA INTEGRATED MOTOR ASSIST One-Motor Hybrid system Fit 213~ Civic Hybrid CR-Z Fit/Jazz Hybrid Freed / Spike Hybrid Acura ILX Hybrid Two-Motor hybrid system for mid-to-large sized vehicles Plug-in Hybrid Beg of 212 Fit Shuttle Hybrid Accord Hybrid Honda Hybrid ratio in Japan Three-Motor Sports Hybrid SH-AWD system for Acura models RLX (concept) NSX (concept) FY11 Q1 Q2 Q3 Q4 FY12 Q1 Q2 Q3 Q4 FY13 Q1 Q

20 Honda Information Meeting Honda FY211 Rating Review Current Honda Business Business Strategy Automobile business Motorcycle Business FY13 Q2 Financial Highlights 2

21 Production Capacity Capacity in Asia to reach approx. 15 mil as of 213 from current 12.1 mil Total Capacity in ASEAN countries, India and Pakistan Unit (millions) % approx. 15. Current 213 India Vietnam Indonesia +26% % % Current 213 Current 213 Current

22 Honda s Current Share and Market Size Thailand 2 million 69% Vietnam 3 million 61% India 13 million Indonesia 52% 8 14% million Brazil 2 million 22% (for month of Sep 212) 59% (for month of Sep 212) 82% 22

23 Motorcycle Demand in India 25 Forecast of Significant Increase in Demand Unit (millions) 2 15 India 1 5 CY Motorcycle India Market Penetration Ratio India 6.% Significant Growth Expected 1,18 Indonesia 2.8% 231 Brazil Vietnam Thailand Taiw an 7.6% 29.6% 25.4% Number of motorcycles Population India -Population continues to increase -Current penetration: ONLY 6% Huge Potential 62.4% 22 (millions) 23

24 Motorcycle Production Capacity Expansion in India Rajasthan 2 nd plant Bangalore 3 rd plant Manesar 1 st plant Expansion Plan Annual Capacity : 2.2 mil 2 nd 1 st 3 rd 4.mil Over 4 mil 2.8mil mil Future Honda Growth (P) 213(P) 214(P) Product Line-up Expand capacity to meet growing demand Introduce new 11cc models Starting with Dream Yuga, Honda will introduce new 11cc models Improve fuel economy of scooter models 11cc AT-Scooter Activa Launch New 11cc Motorcycles Dream Yuga 213 ~ 24

25 Mid-term Plan Unit (thousands) 4, Expand the joy of ownership to more than 39 million customers worldwide annually 39 mil 8 mil 3, 25.9 mil 6.2 mil 2, Power Products 25 mil 11.5 mil 1, 3.8 mil Motorcycle 15.6 mil 5.1 mil 2.5 mil Automobile 4.1 mil FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY1 FY11 FY12 FY13 6 mil FY17 25

26 Honda Information Meeting Honda FY211 Rating Review Current Honda Business Business strategy Automobile business Motorcycle business FY13 Q2 Financial Highlights 26

27 Outline of FY13 2nd Quarter Financial Results (Consolidated) Honda Group Unit Sales (Consolidated Unit Sales) (thousand) Motorcycles Automobiles Power Products EPS attributable to Honda Motor Co., Ltd. (Yen) 2Q Results (Three Months) FY12 FY13 Change 3,811 (2,187) 678 (571) 1,276 (1,276) 3,879 (2,377) 996 (816) 1,288 (1,288) + 1.8% (+ 8.7%) % (+ 42.9%) +.9% (+.9%) Financial 2Q Results (Three Months) results Yen (billion) FY12 FY13 Change Net sales & other operating revenue 1, , % Operating income % Income before income taxes % Equity in income of affiliates Net income attributable to Honda Motor Co., Ltd. Note : Shares which are based on calculation of EPS Average Rates (Yen) approx. 1,82,3, shares (weighted average number of shares outstanding ) % % approx. 1,82,299, shares (weighted average number of shares outstanding ) US Dollar Euro Yen down by 1 yen Yen up by 11 yen Financial Summary Since the earthquake, a recovery led by N.A. and Japan along with new model offerings resulted in an increase in auto sales; an increase in India brought higher motorcycle sales. Year on year operating income rose 92.1%, to 1.8 billion. Financial Highlights Honda Group Unit Sales Motorcycle: Increased in Asia Automobiles: Increased in all regions Power Products: Increased in Asia and Other regions Net Sales and Operating Revenue -Recovery from the earthquake and new model introductions led to an increase for automobile business operations -Currency fluctuations had a negative impact Operating Income Positive Factors - Positive change in sales volume and model mix - Cost reduction efforts Negative Factors - Increased SG&A expenses - Increase in R&D expenses - Currency fluctuation impact 27

28 Change in Income before Income Taxes <FY13 2nd Quarter> Income before Income taxes ( % ) Operating Income ( % ) Other Income & Expenses Yen (billion) Cost Reduction, etc. Increase in SG&A Increase in R&D Currency Effects Unrealized gains and losses related to derivative instruments (Exhibit 2) Others Revenue, model mix, etc. <Decrease Factors> - Increased sales promotion and advertisement expenses, - Increased quality-related expenses, etc.. <Increase Factors> - Decreased fixed cost per unit due to increased production - Cost reduction effort, etc. Operating Income 52.5 FY12 2Q <Increase Factors> -Increase in unit sales and model mix, etc. <Decrease Factors> - Increased sales incentives, etc. - Currency effect due to difference between average sales rates and transaction rates: -.8 -Others +2.6 Operating Income 1.8 FY13 2Q *Please refer to Exhibit 1 regarding currency effects 28

29 Operations by Business Segment 7 Yen (billions) Motorcycle Business =Operating Income =Operating Margin 22% % 13.6% 17% 3 1.5% 9.7% 8.5% 11.9% 11.6% 8.3% 7.9% 7.4% 9.8% 9.6% 9.6% 8.4% 5.8% 1.9% 8.5% 1.6% 9.2% 8.2% 12% 7% 1 3.7% 2.2% 3.4% % -1 FY7 3Q 4Q FY8 2Q 3Q 4Q FY9 2Q 3Q -1.% 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q -3% Yen (billions) Automobile Business =Operating Income 3 =Operating Margin 25% 2 15% 1 9.%9.% 7.1% 6.5% 6.4% 6.7% 3.6% 3.4% 3.6% % -1.4% 6.3% % % 5.% 4.2% 5.3% 2.4% 2.1% % -1.2% -2.2% 5% -5% % -2-15% -21.2% -3 FY7 3Q 4Q FY8 2Q 3Q 4Q FY9 2Q 3Q 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q -25% 29

30 Operations by Business Segment 2 Yen (billions) Power Product & Other Businesses =Operating Income =Operating Margin 15% 9.9% 1% 6.9% 5.8% 6.6% 4.2% 2.3% 5% % -.9% -3.5% -8.1% -6.4% -4.% % -.4% -3.7% -2.8%-2.8% % -.2% -2.7% -3.2% -3.3%.1% % -5% -1% -2 FY7 3Q 4Q FY8 2Q 3Q 4Q FY9-15.% 2Q 3Q 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q -15% *Honda Trading related out-of-period adjustment is not included 8 Yen (billions) Financial Services Business 38.7% 4% % 34.6% 26.4% 21.3% 22.1% 34.8% 29.4% 29.8% 32.% 35.8% 32.9% 32.% 28.8% 33.2% 29.5% 27.4% 3.5% 28.7% 3% % 19.2% 14.9% 13.1% 2% 2 6.5% 1% FY7 3Q Q FY8 2Q 3Q 4Q FY9 2Q 3Q 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q % 3

31 Operations by Region Yen (billions) 6.1% 7.5% 9.5% 4.3% North America 6.3% 1.6% 5.7% % 1.8% 9.7% 8.9% 7.4% 5.3% % =Operating Income =Operating Margin 2.5% 2.5% 6.% 7.6% 6.8% 6.8% 2.5% % 1% 6% 2% -2% % -6% -1% -14% -15 FY8 2Q 3Q 4Q FY9 2Q 3Q 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q -18% 1 Yen (billions) Japan =Operating Income =Operating Margin 12% % 6.% 4.5% 3.4% 3.3% 1.2% % % % -3.2% -6.% 5.8% % 1.7% % -7.3% % -4.8% 1.2% 6.1% 3.2% % % -6% -1-12% % -23.8% -2 FY8 2Q 3Q 4Q FY9 2Q 3Q 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q -24% 31

32 Operations by Region 25 Yen (billions) Europe =Operating Income 1% =Operating Margin % 3.1% 4.3% 2.4% 5% % 1.6% % %.8% 1.7.9% 2.1% % -3.7% -1.9% % % % -2.8% -3.2% -1.% % -6.% % -5% -15 FY8 2Q 3Q 4Q FY9 2Q 3Q 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q -1% % Yen (billions) 9.3% 8.% 5.3% Asia excluding Japan 8.6% 8.4% 7.4% 6.5% 6.3% 8.8% 7.% 9.4% 8.5% 8.% =Operating Income =Operating Margin 6.7% 6.8% 5.4% 4.2% 4.2% 6.7% 6.2% 1% 8% 6% 3 4% 2 2% 1 1.3% FY8 2Q 3Q 4Q FY9 2Q 3Q 4Q FY Q 3Q 4Q FY Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q % 32

33 Operations by Region Yen (billions) Other Regions =Operating Income =Operating Margin % 14.% 13.8% 15% % 11.3% 11.2% 1.4% 4.1% 4.4% 7.5% 7.2% 8.6% 8.4% 6.6% 6.8% 5.% 9.4% 6.1% 5.6% 4.6% 12% 9% 6% 2 3% % % % -1 FY8 2Q 3Q 4Q FY9 2Q 3Q 4Q FY1 2Q 3Q 4Q FY11 2Q 3Q 4Q FY12 2Q 3Q 4Q FY13 2Q -3% 33

34 FY13 Financial Forecasts (Consolidated) Yen (billion) FY12 Results FY13 Forecasts Change amount % Change from previous forecasts as of Apr. 27 Net sales & other operating revenue 7,948. 9,8. + 1, % Operating income % Income before income taxes % Equity in income of affiliates % Net income attributable to Honda Motor Co., Ltd % EPS attributable to Honda Motor Co., Ltd. (Yen) Note : Shares which are based on calculation of EPS approx. 1,82,3, shares (weighted average number of shares outstanding ) approx. 1,82,299, shares (weighted average number of shares outstanding ) Average Rates (Yen) US Dollar 79 8 (1H 79 / 2H 8) Yen down by 1 yen - Euro (1H 11 / 2H 15) Yen up by 5 yen Yen up by 2 yen 34

35 Guidance: Units Sales by Business Segment Motorcycles Automobiles Power Products Unit (thousand) 2, -1,4 ( % ) 5, -18 ( % ) 8, -8 ( % ) "Honda Group Unit Sales" 15, 1, 15,61 2,31 16,6 2,8 15,56 1,84 4, 3, 3, ,3 31 1, , , , 4, 5, ,472 6,3 65 1,67 6,22 55 Other Regions Asia 1,67 12,412 13,82 13,55 2, 158 1,121 1,15 1,45 Europe 1,74 1,74 5, 1, 1,323 2, 2,314 2,52 North 2,63 America FY FY13 Previous Forecasts FY13 Revised Forecasts 588 FY12 71 FY13 Previous Forecasts 71 FY13 Revised Forecasts 392 FY FY13 Previous Forecasts 325 Japan FY13 Revised Forecasts Motorcycles Automobiles Power Products Unit (thousand) 12, -28 ( % ) 4, -5 ( % ) 8, -8 ( % ) "Consolidated Unit Sales" 9, 6, 8,65 2,31 9,9 2,8 9,62 1,84 3,5 3, 2,5 2, 2, , , , 6, 5, 4, 5, ,472 6,3 65 1,67 6,22 55 Other Regions 1,67 Asia 6,1 7,12 7,115 1,5 1,323 1,74 1,74 3, 1,121 1,15 1,45 Europe 3, 1, 2, 2,314 2,52 2,63North America FY FY13 Previous Forecasts FY13 Revised Forecasts 5 58 FY12 7 FY13 Previous Forecasts 7 FY13 Revised Forecasts 1, 392 FY FY13 Previous Forecasts Japan 325 FY13 Revised Forecasts 35

36 Forecast: Change in Income before Income Taxes Income before Income taxes ( % ) Yen (billions) Operating Income ( % ) * * Other Income & Expenses Cost Reduction, etc. increase in SG&A * -45. Increase in R&D Currency Effect Unrealized gains and losses related to derivative instruments Others 54. Revenue, model mix, etc. * The impact of the change in depreciation method which is anticipated to cause a decrease in depreciation expense by approximately JPY 4. billion in total, is included. Operating Income Operating Income 52. FY12 FY13 Revised Forecasts 36

37 Forecast: Change in Income before Income Taxes Income before Income taxes ( % ) Yen (billions) Operating Income - 1. ( % ) Other Income & Expenses Revenue, model mix, etc Cost Reduction, etc ± -45. Decrease in SG&A R&D Currency Effect Unrealized gains and losses related to derivative instruments Others 54. Operating Income 62. Operating Income 52. FY13 Previous Forecast FY13 Revised Forecasts 37

38 Forecast: Capital Expenditures, Depreciation, R&D Expenses Yen (billions) FY12 Results FY13 Revised Forecasts Change Change from previous forecast Capital expenditures Depreciation and Amortization * * ** R&D expenses * Capital expenditures in results and the forecast aforementioned exclude investment in operating leases and acquisition of intangible assets. * Depreciation and amortization in results and the forecast aforementioned exclude depreciation of investment in operating leases and amortization of intangible assets. ** Honda changed to the straight line method effective from April 212 for the depreciation method. 38

39 Dividend (Yen) Dividend per share FY12 Results FY13 Results & Projection Increase / Decrease from FY12 1 st quarter End nd quarter End rd quarter End 15 ( 19 ) ( + 4 ) 4 th quarter End 15 ( 19 ) ( + 4 ) Fiscal Year 6 ( 76 ) ( + 16 ) 39

40 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 of foreign subsidiaries financial statements into Japanese Yen, and foreign currency adjustments, which result from foreign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries which have been analyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL and Japanese Yen. (2) With respect to cost reduction and effects of raw material cost fluctuations, management has analyzed cost reduction and effects of raw material cost fluctuations at the levels of the Company and its material foreign manufacturing subsidiaries in North America, Europe and other regions. (3) With respect to changes in net sales and model mix, management has analyzed changes in sales volume and in the mix of product models sold in major markets which have resulted in increases/decreases in profit, as well as certain other reasons for increases/decreases in net sales and cost of sales. (4) With respect to selling, general and administrative expenses, management has analyzed reasons for an increase/decrease in selling, general and administrative expenses from the previous fiscal year net of currency translation effects. 4

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